Treat Your Goals Like a Bank Account to Skyrocket Your Success

Devin Arrigo

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According to CNBC, “Investing just $5 a day with a 10% annual return could net you around $2.3 million in 50 years.”

The year was 2011, and I was in an all-out war with my teenage “pimple and zit” phase.

I had just started my freshman year of high school and was excited to no longer be a middle-schooler. While I wasn’t always fully engaged in the classroom, I was a good student and loved learning new things.

Ding. Ding. Ding.

As the 6th-period bell rang, my accounting professor, Mr. Dano, closed the door to officially start class. Like most of my classmates, this was my signal to zone out.

After a few minutes of doodling, spinning my pencil, and shaking my leg, I briefly looked up to see what Mr. Dano was presenting.

In a matter of seconds, I went from bored and uninterested to hanging on to every word that came out of my teacher’s mouth.

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Photo via The Motley Fool

The lesson today was compound interest. Mr. Dano eased us into the concept with a basic definition.

“Compound interest is the interest that you earn on interest.”

He then dove into calculating it and walked through some real-life examples to help us better understand.

“Investing just $5 a day into an account with a 10% annual return could net you around $30,000 in 10 years, $330,000 in 30 years and $2.3 million in 50 years.” — CNBC

Using the graph above, Mr. Dano went on to describe how the true power of compounding interest — small, frequent deposits can eventually create an immense amount of wealth.

I was hooked. After seeing the numbers and understanding the power of compounding interest, I wanted to start investing immediately.

I went home that same day, and with my Dad’s help, opened a brokerage account. And I’ve been regularly investing ever since.

However, Mr. Dano didn’t only open my eyes to the world of practical investing that day. Perhaps more importantly, he unveiled the power of consistent, daily action to accomplish goals and achieve success.

How to Treat Your Goals Like a Bank Account

The power of compounding interest is in the frequency in which you invest and compound, and the time you allow your investments to grow.

Let’s take a look at an example:

  • Say you invested $6000/year ($500/month) at a 10% interest rate.
  • In scenario A, you give your money 25 years to grow, compounded once per year.
  • In scenario B, you give your money 50 years to grow, compounded once per month.
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Scenario A would net you about $650,000, while you’d end up with $8.7 million in scenario B. That’s a difference of more than $8 million!

Sure, the second scenario has an extra 25 years to grow. However, this only further demonstrates the importance of time when investing in your future.

The power of compounding is in the frequency you make deposits and the time you allow it to grow.

This incredibly powerful investing strategy is not only a great way to make money. It’s an equally useful method to tackle your biggest goals and achieve the success you’re destined for.

According to New York Times best-selling author Darren Hardy…

“The compound effect is the operating system that has been running your life whether you know it or not.”

This is exactly why the Nobel-Prize winning physicist Albert Einstein called compounding interest “the eighth wonder of the world.”

Regardless of if we like it or not, the compounding effect will influence our lives one way or another. Whether that impact is positive or negative is entirely up to you.

Treat your goals like a bank account to take advantage of compounding interest. Make frequent 'deposits' over a long period of time, and you'll see incredible results.

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Make Frequent Deposits to Create Incredible Success

Consistent, daily action leads to unimaginable success. You have to be willing to make deposits (daily action) for a long time to allow yourself to grow.

The more (and more often) you ‘invest,’ the more powerful compounding effect you will experience.

Like money in a bank account, every decision you make compounds. Make the right decision, and that compounds in a positive way, leading you down a good path. Make the wrong decision, and that compounds in a negative way, leading you on a bad path.

Good and evil increase at compound interest. That’s why the little decisions we make every day are of infinite importance. — C. S. Lewis

Daily habits are what define our lives. If you can change what you do daily, you can change your life. Every little decision matters, no matter how small. This is why Darren Hardy once said, “You will never change your life until you change something you do daily. The secret of your success is found in your daily routine.”

If you want to be a writer, don’t start by trying to write a full novel. Start with one word.

Stack a couple of days of writing like this and slowly build momentum to write a sentence, paragraph, article, and then your novel.

Small decisions and daily action help you build momentum. Take advantage of the compounding effect and stack small, daily actions on top of each other to eventually create the success you’ve always wanted.

“Knowledge and productivity are like compound interest. The more you know, the more you learn; the more you learn, the more you can do; the more you can do, the more the opportunity.” — Richard Hamming

Give Your Deposits Plenty of Time to Grow

“Rome wasn’t built in a day.”

To create anything of value, you need time to grow, develop, and mature.

You can’t become an NBA basketball player overnight. You can create a Fortune-500 company overnight. You can’t become a New York Times bestselling author overnight.

Overnight success is a myth.

It takes years and years of consistent, daily action to achieve any level of success. You have to make consistent ‘deposits’ into your success ‘bank account’ and then give it enough time to grow and mature.

In the words of Ray Kroc, the entrepreneur best known for expanding McDonald’s from a local chain to the world’s most profitable restaurant,

“I was an overnight success all right, but thirty years is a long, long night.” — Ray Kroc

To build anything of value, it takes time, hard work, and consistent action. In order to allow yourself enough time to grow and develop, you have to stay consistent for a long time.

Like with any bank account, the more time your money has to grow, the more you’ll have when you cash out. Building anything of value is no different. You have to give yourself enough time to allow the compounding effect to do its thing. The longer you can stay consistent, the more of its incredible power you will experience.

Final Thoughts

The power of compounding is in the frequency of your deposits and the time you give them to grow.

The more often you can make ‘deposits’ into your success "bank account," the more growth you’ll experience. And if you make consistent deposits over a long period of time, you experience exponential growth.

Don’t be discouraged. Small decisions and daily action stack on each other to eventually create the success you’ve always wanted. And just like money in a bank account, every decision compounds.

Start small. Start where you’re at today. Use small wins to build momentum and treat your success like a bank account to leverage the incredible benefits of the compounding effect.

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Marathon runner | Triathlete | Personal growth addict | Writing about creative ways to become a better human being. devin.arrigo1@gmail.com

Los Angeles, CA
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