Knowledge Is Like Compound InterestBack to home
As an early founder, I had huge knowledge gaps. I didn’t know a lot about start-ups, and that resulted in slow execution and decision-making. Filling those gaps helped accelerate my execution and thus the success of my company.
Since then, I’ve been passionate about continual learning. I’ve developed my own system, but I recently started researching how others approach it. I came across this quote from Warren Buffett:
Read 500 pages every day. That's how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.
This really stuck with me. I agree that knowledge is like compound interest. It builds upon itself. New knowledge isn’t acquired in isolation. It combines with what you’ve already learned to improve your understanding and decision-making. When you look back to a long time ago, you realize that your understanding and decision-making are light years ahead of where you were then because of the compounding effect.
Warren’s 500 pages every day isn’t doable by most people, but frequency is more important than quantity. Reading daily essentially increases the compounding rate of your learning. The more often you add to your knowledge, the better your understanding and decisions become. If you read every day, that’s 365 chances to compound your learning.
The last part of the quote explains what separates the good from great. Most people could take advantage of this life hack—but won’t. So, if you commit to this one habit, you’ll set yourself apart from almost everyone over time.
I don’t think it’s a coincidence that Warren Buffett and other successful people read daily. They recognize it’s something they have total control over that has an outsize impact on their chances of being successful.