Compounding Assets

Healthy, wealthy, wise, and connected is my small addition to Ben Franklin’s classic quote. I have dropped his ridiculous reference to “early to bed / early to rise” because that’s not the only way.

Those four elements constitute the foundation of a life well-lived are each important and each compounds significantly over time (albeit in very different ways):

  1. Health – strictly deteriorates over decades (beginning in the ~30s); goal is to preserve and protect; the loss of health is the loss of the foundation of life and all other goals fall by the wayside; this can be subdivided into mental and physical heath
  2. Wealth – money can’t buy you love or everything; but it sure is nice to be able to pay your bills and rent on time (an inability drains energy and creates compounding problems); sufficient assets can create independence and ability to control your own time (the whole point of money, in my book); step functions improvements can occur through equity ownership (either granted and earned or purchased with savings)
  3. Wisdom – knowledge has a half life (today’s political news is mostly irrelevant tomorrow, while basic algebra will be useful ~forever); balance the need to update the model of how the world works *today* with the tradeoff for more timeless knowledge; build a good foundation; gravitate to places where you’ll be able to learn a lot of useful information; usually compounds steadily but differentiated value in understanding topics deeply enough to build new things; you can learn extremely quickly with enough focus and dedication
  4. Connectedness – people matter; we are social animals (even in a pandemic, it turns out); as the country song goes, you don’t get “a second change to make old friends“; being connected and part of a community helps you on health, wealth, and wisdom; connection to others is also an end in itself – great friendships and relationships are among the most satisfying of all experiences; while working, be as picky as you can be about the people you work with – they should inspire you to improve your play

In the spirit of changing quotes, here’s one similar to that often attributed to Einstein (although, at this point, it could just be Einstein’s quote-magnetism), “Compounding interest is the eight wonder of the world. Those who understand it, earn it; those who do not, pay it.”

Compounding health, wealth, wisdom, and connectedness each require the use of inherently limited resources: energy and time. Let’s explore.


Energy is required to make good eating decisions and to exercise (although exercise is repaid in the form of better energy on future days). Those two elements (plus sleep) are a huge part of physical health. Not much else matters. So, make eating well a habit. Make exercising a habit. Get enough sleep (although I’m writing this in the small hours of the morning…). Make it a game, or competitive, or whatever sparks you.

You have to eat, it turns out. Becoming known as a “healthy eater” creates a positive feedback loop, driving social expectation and social reward for “eating well” when the typical reward would be for “one more cookie” or whatever. And vice versa. Avoid that.

The main “good exercise decision” is to move for at least 30 mins per day and to avoid prolonged stretches of atrophy. No marathons required, but be sure to move around.

The main “good eating decision” is just to manage portions. Calories in / calories out. Bad food seems to drive overeating as a side effect (and resisting (worthwhile, on occasion) requires an enormous use of energy that should be available for better uses elsewhere).

Intense workouts: excellent, but only after you’re achieving the table stakes.

Intense diets: generally haven’t been worth it in my experience. (although low-carb / slow-carb diets have seemed pretty reliable for losing weight, but it has to be sustainable for you)

Avoid catastrophic health risks where possible. At least know the tradeoffs when you take significant risks.


To paraphrase from Warren Buffett, “investing is the transfer to others of purchasing power now with the reasoned expectation of receiving more purchasing power, after taxes, in the future.” If you aren’t investing, you are only able to earn by providing your time to others.

The stock market isn’t the only option (and today it surely looks like a frothy option), but it’s usually the best option. If you have the temperament to buy index funds consistently, you’ll probably do just fine over long (~20 year+ periods of time) and beat almost everyone else.

Alternate approaches to investing take enormous amounts of time and energy to execute effectively. Even then it is a mix of skill and luck.

So, either spend significantly in seeking better wealth-creating opportunities through investment and become a full-time investor (or near that) or don’t. But don’t go halfway.

It’s probably better to spend that time and energy on getting a higher-paying job or avoiding unneeded expenses (in either case, increasing your after-tax savings). More savings, invested at a lower rate with nearly-zero time and energy invested (i.e. stock market indexing), can create incredible outcomes.


Find people at least as smart as you are and spend time with them. They don’t have to be alive. You don’t have to be able to meet in person (as strange as that currently sounds – not much of an option, today). Biographies and books and articles work.

Learning seems to work best when there are stakes, at least for me. Pressure creates the the necessary stress to focus the mind and figure out something, anything. Writing on the internet creates stakes – other people can read this – unlike a journaling practice.

I prefer reading more timeless content – it has helped me to better understand how people think and work and act and play. There is a loss of the in-the-moment with this approach.


I have a good sense of who I care most about in the world, and in relationships, you mostly get what you give. Exceptions abound, but that seems to be the middle of the road. So, be trustworthy and kind and thoughtful, or whatever those important values are for you.

Professionally, I focus on treating everyone with respect. This, in investing, very often means getting to a quick but thoughtful “no, thank you.” Oddly enough, this tactic usually wins the day. Obviously a “yes” is better, but most people move on just as quickly.

Strong relationships built over decades create incomparable benefits. An ability to trust someone implicitly is among the most rewarding experiences available.

Opportunity Costs

Where to direct that time and energy, then? It depends on priorities, which cannot be prescribed.

There are overlaps. Make friends with good, smart, and athletic people, and you’ll likely end up doing well in more than just one category of compounding assets.

There are tradeoffs. You can’t read a book and run a marathon at the same time. Or spend four hours each day doing emotional work and then another ten hours building a business (maybe you can, but I can’t). Or eat and sleep.

Your priorities can, and probably should, change over the course of a lifetime. In fact, determining those priorities is deeply challenging – literally “meaning of life” hard.

Compounding Over Time

The nature of the compounding assets also varies over time.

Health, generally, cannot be regained once lost.

Wealth tends to grow slowly and then very quickly, and total loss is terrible but recoverable.

Wisdom [or should it be Knowledge?] is difficult to measure (though, as the US Supreme Court likes to say, “you know it when you see it”), but desirable nonetheless; Knowledge should grow over time, connecting new ideas and concepts constantly.

Connectedness cannot easily grow quickly (though it may, in unusual circumstances).


Compare the natures of the compounding assets with your priorities, and figure out where to spend your time and energy (both today and over time).

Simple enough, but certainly not easy.

Writing Review

Ideas for improvements:

  1. Pick a more focused topic
  2. Try writing an outline first?
  3. Try to write to a specific audience
  4. Should I always use headers? Some seem superfluous.

Good stuff:

  1. Writing with a keyboard – I’m very close to a digital native, but there’s still that lingering sense that I should have used a pen and paper to sketch out my thoughts. Probably a holdover from English Lit. Dead trees wouldn’t have added much.
  2. Deleting stuff! Whole sentences never seeing the light of day. Paragraphs removed. There are several articles hiding as drafts now. Not sure if I’m ready to completely scrap a post midway through and rewrite, but the second (or third) time always seems better (and often shorter).


  1. There may be another article to come on questions about Wisdom (accumulated hard-won lessons of life) versus Knowledge (justified true belief).
  2. Revisions of this essay are merited. Could use some improvement, and the topics here are important to me.

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