You’ve probably heard about the miracle of compound interest, one of the most powerful forces in investment that exponentially grows your returns. For example, investing $5000 a year from 25 to 35 yields more than investing $5000 a year 35 to 60. The 25 year old starter invests $55,000 and ends up with $615,580 at retirement. The 35 year old starter invests $130,000 and still has less at retirement: $431,754. Huge difference!
Let’s apply that concept to your career opportunities.
Here is an anecdote from mathematician Richard Hamming from a talk he gave at Bell in 1986 about doing Nobel-level work: (h/t Kottke.org)
Now for the matter of drive. You observe that most great scientists have tremendous drive. I worked for ten years with John Tukey at Bell Labs. He had tremendous drive. One day about three or four years after I joined, I discovered that John Tukey was slightly younger than I was. John was a genius and I clearly was not. Well I went storming into Bode’s office and said, “How can anybody my age know as much as John Tukey does?” He leaned back in his chair, put his hands behind his head, grinned slightly, and said, “You would be surprised Hamming, how much you would know if you worked as hard as he did that many years.” I simply slunk out of the office!
What Bode was saying was this: “Knowledge and productivity are like compound interest.” Given two people of approximately the same ability and one person who works ten percent more than the other, the latter will more than twice outproduce the former. 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 — it is very much like compound interest. I don’t want to give you a rate, but it is a very high rate. Given two people with exactly the same ability, the one person who manages day in and day out to get in one more hour of thinking will be tremendously more productive over a lifetime.
My takeaways from this: If you want to outperform your peers, start earlier, work harder, and show up every single day. Your performance will compound and your output will dwarf your competition.
How does this play out for someone who chooses to skip college and start working straight out of high school, perhaps with an apprenticeship? It isn’t just a simple “I started four years earlier than my peers” equation.
If you start building your skills, your body of work, and your career at 18, you’ll be 4 years ahead of your peers in calendar years, but you’ll be 6-8 years ahead of them in career years. When they are starting their entry-level positions out of college, you’ll have already hit the exponential part of your growth curve.
Here are a few ideas of how you can further compound your career opportunities:
More ways to compound your career opportunities: