Welcome back to my blog. Today, I would like to take you into another chapter of my Financial Lens series. This time, I want to write about something we often encounter in finance but perhaps rarely connect with our everyday lives: compounding.
t the beginning of my financial journey, compounding was one of those concepts I found difficult to truly understand. I focused mostly on the numbers, and to be honest, I treated it as another formula that I needed to calculate or apply to a financial problem. I never really tried to understand it from the perspective of everyday life. In finance, compounding simply means earning or paying “interest on interest”: interest is calculated not only on the initial principal, but also on the interest that has already accumulated over time. The definition sounds straightforward, but it took me much longer to understand what this idea could mean beyond the numbers.
As an investor, we may pay attention to different types of interest rates and how compounding can significantly affect the value of an investment over time. But when I take this concept outside finance and look at my own life, running is probably one of the clearest examples I can find. If I were to describe my running journey through the language of finance, perhaps my very first step was my principal.
I didn’t start running with a clear purpose or a specific goal. I simply ran because I loved the atmosphere of the early morning. I loved breathing in the fresh air, watching the flowers bloom, seeing the sunrise slowly appear between the buildings and listening to the birds sing as the city began to wake up. Most of all, I loved the morning wind. There was something special, fresh and energizing about it that kept bringing me back to running. I didn’t start because of a race or because of someone else. I ran simply because I genuinely enjoyed the time I spent running.
Starting with that small “principal,” I simply kept running. Somewhere along the way, I gradually became better without deliberately forcing myself to reach a particular level. I might have been slow on the first day, a tiny bit better on another day, and eventually much stronger than the version of myself who first started. To me, this is where the idea of compounding begins to appear in my running journey. I couldn’t simply jump from my first run to the level I am at today; there were countless ordinary runs in between. The runner I am now is the cumulative result of all those days in the past. Some runs were fast, some were incredibly slow, and some depended entirely on my stress level, mood or physical condition. None of them looked particularly significant on their own, but together they gradually built the runner I am today.
I repeated it day by day, kilometer by kilometer and round by round. Of course, there were times when running felt repetitive or even a little boring, but I kept returning to it because somewhere along the journey, I had found my own reason to run. It didn’t always have to be a long run or an intense interval session. There were plenty of days when I ran for only half an hour or completed just four or five kilometers. I gradually realized that getting a little better each day was already enough for me. If I think of that improvement as my own “compounding rate,” perhaps the rate has never been particularly high. But it is a rate I have been able to sustain for years, and that, to me, is worth much more.
Running has also made me think about the person I am becoming beyond pace or distance. I believe in myself more than I used to, and I care a little less about what other people think of me. Running has made me feel more stable and perhaps a little braver when I need to start something new or face something difficult. I want to continue running because I know it has helped me build not only my physical health, but also my mental strength.
Three years later, I can now run at a better pace, participate in races I once never imagined myself joining, and experiment with interval runs, long runs and tempo runs much more seriously than before. My body has gradually adapted to the stress of running, just as my mind has adapted to the discipline that comes with it. I still don’t know what kind of runner I will become in the future, but I know one thing: the version of me standing here today is the future value of the first step I took three years ago. It didn’t appear overnight. It accumulated little by little until one day I looked back and realized how far that first step had travelled.
Going back to my financial journey, my “principal” was actually quite small: a few finance books that I happened to read and one finance course I took during my first bachelor’s degree. That was more or less where everything started. I decided to step onto a completely new path simply because I didn’t want to look back one day and regret never giving myself the chance to try. From there, I kept going through course after course, lesson after lesson and exercise after exercise from my professors. I also started taking online courses through Coursera to build more practical financial skills and learn from courses offered by other universities. It wasn’t easy. I constantly found myself stuck between unfamiliar financial terminology and complicated formulas that sometimes seemed impossible to connect with one another.
I kept telling myself to continue, even when I didn’t fully understand what I was doing. Whenever I got stuck, I asked ChatGPT, went back to my professors, or simply took out a piece of paper and drew the difficult concepts until I could somehow connect the new information with what I already knew. Sometimes I needed to read the same thing again and again before it finally made sense. I failed many times, misunderstood many things and doubted myself even more times before reaching where I am today.
A long the way, I struggled with my emotions, my doubts and many problems that came with choosing this new path. If the few books and that first finance course were my principal, perhaps the effort I continued to put in day after day became my rate. I can’t point to one specific result and say that it represents everything I have gained from this journey. What I can say is that I trust my financial knowledge much more than I did three years ago. I have failed many times, but I have also solved countless questions, connected concepts that once seemed completely unrelated and gradually built a stronger foundation.
I am still learning, and there is still so much about finance that I don’t know. But I can already feel that something has grown inside my mind. The knowledge I have today is my own kind of future value, accumulated from what I started three years ago when I first arrived in Taiwan to pursue my second bachelor’s degree.
These three years have given me time to build a financial foundation that I now feel much more comfortable sharing and discussing with others. But this result is cumulative. It wasn’t created by one course, one book, one exam or one particularly productive day. It came from many small actions repeated over three years. Just like my running, I can’t assign an exact number to what I have gained or calculate the precise “return” on every hour I have spent learning. But perhaps that is exactly why compounding feels so close to our everyday lives. We may not notice much happening from one day to the next, yet those small actions can accumulate into something much larger when we give them enough time.
But compounding doesn’t always work in a positive direction. Self-doubt, fear and comparison can accumulate too. Throughout these three years, there were countless moments when I questioned whether the path I had chosen would actually lead anywhere. I struggled with loneliness, wondered whether all the effort I was putting in would eventually result in something meaningful, and had many difficult days trying to find my way through a field that was completely new to me. There were also times when I felt that no one could fully understand why I had made these choices. In those moments, the only thing I could really do was trust myself a little more, accept whatever I was feeling and continue moving forward.
I didn’t try to convince myself that everything would magically be fine. Most of the time, I simply focused on the problem in front of me and divided it into smaller pieces until I could find a way through it. Sometimes it took one day, sometimes two, and sometimes much longer. Time was one of the few things I could continue to add, together with my actions and my determination to keep looking for an answer. Perhaps that was another form of compounding I didn’t recognize at the time: not becoming dramatically better overnight, but refusing to stop adding another small piece.
The more I think about compounding, the less I see it as something that belongs only to finance. I can find it in the kilometers I have run, the financial concepts I have struggled to understand, the questions I have solved and even the doubts I have repeatedly carried with me. Looking at my everyday life through a financial lens doesn’t necessarily give me an exact formula for how to live, but it gives me another way to understand what all these small actions may eventually become.
I still don’t know the future value of everything I am doing today. But perhaps I don’t need to know yet. For now, I simply want to be a little more conscious of what I choose to keep compounding.
Thank you for spending some time with another chapter of my Financial Lens series. I hope this reflection gives you another way to look at some of the small things you repeatedly do in your own life.
Best regards,
Jai
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