You Have To Think Like A Termite To Achieve Great Things
Bite one bite at a time and the entire table collapses. No matter how big the table is.
I am sure you are familiar with the magic of compounding interest. It stipulates that a percentage gain slapped upon a previous percentage gain applied to the principal amount of investment compounds exponentially.
Take, for instance, a 1% annual rate on $1 for 2 consecutive years. The financial math goes like this.
Bank Balance at Start of Year 1: $1.00
Bank Balance at End of Year 1: $1.00 + $0.01 = $1.01.
Bank Balance at the start of Year 2: $1.01.
Bank Balance at the End of Year 2: $1.01 + $0.0101 = $1.0201.
Bank Balance at the start of Year 3: $1.0201.
Did you see the magic? By the end of Year 2, we get that little tail-wind of $0.0001. That is the invisible hand of the compounding machine.
If we think hard enough, the Natural Law of Compounding is everywhere.
We can see some parallels when we observe termites at work.
Termites are social animals. Actually, that is an understatement. In an age where social distancing is the norm, living in a colony is unbelievable.
And they have an incredible work ethic. It would be difficult to spot motivational issues with termites. They destroy the structure of sturdy wooden furniture one bite at a time.
We hardly notice them approaching on Day 1. The chair creaks at Day 10, possibly screaming in desperate silence. By Day 100, the chair becomes a raw material for the campfire.
Yes, termites understand the Natural Law of Compounding. They know instinctively that taking one bite at a time is necessary to start the ball rolling and that each successive bite weakens the superstructure an iota more than the previous bite.
I imagine the queen of the colony studying the technique of calculus and analyzing the rate of change over time with her Destruction-Engineering graduates.
What a marvel. Of course, I avoid termites when I see them. The imagery in my head is imagination at play.
And we can learn something from this.
Hard work and effort may seem futile over time, especially when the time horizon is long enough. It applies to retirement planning, career advancement, qualifying for Boston Marathon.
Seem is the point of focus here.
That is because the magic of compounding is invisible. Invisible does not mean not present. Remember electricity, anyone?
Learn from the termites. Any goals that are big enough are worthy of our effort, time, and commitment. Any time horizon that is sufficiently long enough allows for the Natural Law of Compounding to work its magic.
Charlie Munger, Warren Buffett’s friend, love to say this: -
“When the compounding machine is at work, do not disturb it.” — Charlie Munger.
Take one step at a time.
Make one bite at a time.
Achieve one medal at one point in time.
Small Things Over Time Means Big!
Aldric
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