Compounding is a valuable principle in investing. When you compound interest, dividends or profits by reinvesting them, you start making profits on your profits. It’s the best way to grow your investments. The principle of compounding applies to any kind of investment, even your investment in relationships. The Apostle Paul taught the principle of compounding to Timothy when he instructed him on how to make wise investments in people:
“You have heard me teach things that have been confirmed by many reliable witnesses. Now teach these truths to other trustworthy people who will be able to pass them on to others.” (2 Timothy 2:2 NLT)
Paul was simply stating that we need to be very intentional about how we invest in people. If done properly, our investment should compound. Investing our time in teaching and developing others is as much a matter of stewardship as making a financial investment. We need to invest wisely in those who will produce the most return. Paul describes investment-worthy people here with such words as “reliable” and “trustworthy”. Do you know people who could be described this way? They are worth investing in because your investment will be compounded through their investment in the lives of others. Compounding happens because reliable and trustworthy people naturally attract the attention of other reliable and trustworthy people.
John C. Maxwell calls this“The Law of Attraction” which simply states that we tend to attract people like ourselves. People are attracted to others with the same beliefs, values and character traits. So, if you want to attract reliable and trustworthy people to invest in, you yourself must be that type of person. It’s the “birds of a feather flock together” dynamic in action. In order to attract the right kind of people, be that right kind of person yourself.
The compounding principle is about perpetual influence that has generational impact. Compounding is like pushing a rock down a hill. It takes on a life of its own when properly put into motion. Leaders enjoy investing in people who grow and get better. Leaders also learn from the good examples of other leaders. Those you invest in will naturally want to also invest in people in their realms of influence. There is a lot of fulfillment to be found in making good investments in people, especially when these investments affect generations of leaders. Be a good example as a leader today, and you will attract leaders who will, in turn, be a good example to other leaders tomorrow.
Can you name people in your realm of influence you believe to be reliable and trustworthy? Make a list and choose to invest in them today. Be intentional in this area of your leadership. Making good investments require careful thought and right choices. By making wise decisions today, you can affect generations of future leaders through the simple principle of compounding.