Compounding Interest: The Truth About Self-Development

Published in

The Medical Leader

7 min readMar 22, 2018

Written by Brian Thorson

It is no secret that successful leaders view learning as a lifelong pursuit. In his last year as President, George W. Bush read 100 books (1). When asked how to get smarter, Warren Buffet held up a pile of reading material and said, “Read 500 pages like this every week. That’s how knowledge builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.” (2) While reading is not the only way to develop yourself, the time invested by successful leaders is universal and gives credence to the importance of continually learning and bettering yourself.

The complexity of war precludes leaders from the luxury of being one dimensional. The military leader must know and understand history, geopolitics, leadership psychology, organizational behavior, public speaking, fitness, strategy, and technical and tactical skills. Consequently, the content leaders consume and self-development activities they engage in, should be varied and vast.

Many find this idea to be daunting because they perceive themselves to be too busy, they believe investing in self-development is too boring or too hard, they have never established the habit, or simply because they would rather binge watch Game of Thrones. There is nothing wrong with watching Game of Thrones — everyone must take time to completely relax. However, it is important to be mindful of how you spend your time. According to the Bureau of Labor Statistics (3), on average, the employed man spends 15.91 hours, and the employed woman 13.27 hours, watching television each week. The total leisure hours per week for employed men is 30.94 and for employed women is 26.88. Depending on your perspective, this either sounds like a lot of time, or very little. To adopt a healthy perspective on time, it is helpful to view the idea of investing in self-development through the lens of financially investing in your retirement account.

Saving money is hard. Food, housing, transportation, clothes, insurance, utilities, and child care all demand a sizable percentage of your limited paycheck. Then, with what remains of your income, you pay yourself. Do you apply your remaining discretionary funds to the newest gadget, entertainment, philanthropic cause, fashion, travel, eating out, or do you invest in some form of a savings account? You must pay your bills, and you should pay yourself, but be wise with your discretionary income. Making small ‘sacrifices’ with your money now enables you to take advantage of the benefits of compounding interest later.

For example, the value of a dollar is very different depending if you look at its value today or thirty years from now. Say you were to invest that dollar in the S&P500. The twenty-year average annualized return in 2000 was 15.68% and 2014 was 9.86%, but a very conservative and commonly used estimated planning factor for the future is 8% (4). Using this commonly accepted planning factor, if you were to invest a dollar in the S&P500, it would be worth $10.06 after thirty years. If you were to invest a dollar a day for an entire year, it would be worth $3,672.87 after thirty years. Now if you invest a dollar a day for the next thirty years, that investment’s future value is $44,656.24, a $33,706.24 growth over contributions. The point is that everyone reading this article can afford to invest a dollar a day, which seems insignificant when viewed today, but yields something of immense value over time.

Time, like money, is a limited resource. Each week has seven days and each day twenty-four hours; you can do nothing to squeeze more time into a day. Unlike money however, once time has passed, you cannot work to make more. Therefore, you should prudently manage your time to ensure you spend it wisely. Just as with your bank account, there are certain time ‘expenses’ common to all. Everyone must eat, sleep, spend time with Family (placed in the ‘must’ category intentionally to secure priorities), work, exercise, commute to work, and perform household maintenance tasks — these are non-negotiable. However, similar to discretionary funds, we all have discretionary time. It is during this time you can establish your self-development practice.

Begin by investing fifteen to twenty minutes a day consuming information or engaging in an activity specifically selected to make you better. If even this sounds like too much, or you are in a season of life that is particularly busy, pick a few two to three days a week to invest in self-development. At first, this may seem challenging, both because of the focus required as well as the perceived sacrifice you are making. As you remain committed to investing in your own development, the habit develops, and it becomes easier. More quickly than you would imagine, connections form subconsciously between the various things you learn. Then you will begin to connect what you are learning with experiences at work. Over time, just like your retirement account, this information coalesces and compounds to produce tacit knowledge and understanding greater than your time investment.

Most people honest with themselves already know they need to invest in their own self-development but may not know where to begin. There are countless methods — they are not all time consuming and you can accomplish many while engaging in other activities! Below are a few simple recommendations and principles that have worked for me along with some resources I frequent. Remember, it is never too late to start developing yourself, and in the words of Harry Truman, “Not all readers are leaders, but all leaders are readers”!

1. Schedule time to invest in your own self-development. If you are not intentional with your time, someone else will be, or you will lose yourself in Season Four of Game of Thrones and wonder what happened to your weekend.

2. Habits are powerful. Remaining consistent in your pursuit of self-development makes it easier to continue and allows you to consolidate your gains. “If you are going to achieve excellence in big things, you develop the habit in little matters. Excellence is not an exception, it is a prevailing attitude.” — Colin Powell

3. Vary the content you consume. To be a well-rounded leader, and to maintain your interest, it is essential that you read different topics from diverse sources.

4. Be realistic. Some days I am too tired to read Delbruck’s History of the Art of War Within the Framework of Political History, but I can muster the motivation to read a few five-minute articles from one of the professional development blogs below.

5. Set goals. When you think about retirement, you have goals for the quality of life you intend to live. When you go to the gym, you set goals for your gains. When you take command, you create goals a develop a deliberate plan to achieve them. Why should it be any different for self-development? This is the one area in life that can be called upon at any time because you are always present.

6. Talk about what you learn. It is natural to want to discuss what you are learning. Connect with a network of like-minded people to engage in professional development discussions. This will help maintain excitement about what you learn and help you remember it better and make greater application of what may otherwise remain theoretical knowledge.

Reading Lists:
- Secretary of Defense Reading List
- Chief of Staff of the Army Reading List
- 2017 War on the Rocks Holiday Reading List
- CENTCOM Commander’s 2018 Reading List
- From The Green Notebook Reading List
- Senator John McCain’s Reading List
- The Military Leader’s Reading List

Audiobooks: These are time-multipliers as you can listen to them while commuting, cutting the grass, running, etc. These can be expensive so I recommend one of the following methods.

- Overdrive: An app that enables you to link multiple library accounts to one source to access audio books, ebooks, and Kindle books. Since you are connecting with public libraries, all content is free. I further recommend linking to the Army and Navy libraries as they have great content listings and you can make recommendations for additional books.

- Public Libraries: Check out a book, whether on CD or other electronic media, for free.

- Audible: Create a paid account to receive discounts on audio books.

Podcasts: This is a time-multiplier as you can listen to these while commuting, cutting the grass, running, etc.
- Leaders Huddle
- Strategy Bridge
- Modern War Institute
- The World Next Week by Council on Foreign Relations
- TED Talks
- Center for Strategic and International Studies
- Strategic Studies Institute Live

Acknowledgements:
(1) http://followingtolead.com/resources/how-do-leaders-read-so-much/
(2) https://www.cnbc.com/2016/11/16/warren-buffetts-reading-routine-could-make-you-smarter-suggests-science.html
(3) https://www.bls.gov/charts/american-time-use/activity-leisure-by-sex.htm
(4) https://petetheplanner.com/what-rate-of-return-should-you-expect-on-your-investments/
(5) https://fromthegreennotebook.com/2015/06/07/three-truths-about-the-personal-study-of-war/

Brian Thorson holds a Bachelors of Science in Nursing from the University of Connecticut. He has served in various staff positions and commanded a Forward Surgical Team and a Headquarters Company. He is currently assigned as the Deputy Surgeon for 3D SFG (A). The views expressed in this article are the author’s alone and do not reflect the official position of the United States Army, the Department of Defense, or the U.S. Government.