Popularized by Darren Hardy, The Compound Effect sums up what I think is important in teaching teens the power of small effort over time. I read it a while back and it definitely stuck with me. The idea that a plane that started to veer off by the tiniest degree could end up 100’s of miles off course really resonated. I knew my clutter didn’t get there overnight…it was compounding. However, the book that hit me with the same truths in a more palatable or applicable way was Atomic Habits, by James Cleary. If you had to pick a really effective book to get you moving towards any better future, I think this is it. It brings home the fact that it is the small, atomic changes that we make that bring about the long term progress, not the big and flashy ones.
In our first meeting, I pulled up my favorite calculator: the Dave Ramsey Investment Calculator. I have driven that thing so many times to run out future scenarios that I probably broke it a few times. I love it because you can mess around with the numbers to see what small monthly changes can do for your overall financial future health. Even at conservative number, its crazy what the potential of growth is for a teenager.
It seems impossible–but if you can show a teen or young adult the magic of compound interest, for as little as $50 a month—FOR THEIR ENTIRE WORKING LIFE–they can retire as millionaires. Imagine the potential if they up it to $200 or $500 early in their life.
Or maybe they want to retire early. For only $200/month from 14 to 55, they can retire with $1.3 million!
It’s a fun game to play to get them excited about the possibilities. In a world that is flush with get-rich quick, instant noodles and immediate gratification, slow and steady is a lost art.