548: Nick Maggiulli - The Power of Compounding, Creating a Writing Practice, Building Your Career, & Proven Ways To Build Wealth
Oct 8, 2023
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Nick Maggiulli, expert in power of compounding, career building, and wealth creation, discusses saving more when earning more, starting a blog as a New Year's resolution, the power of writing and publishing, importance of fees when working with a financial advisor, sustained excellence through consistency and effort, and the power of consistency and compounding in achieving success.
Persistence and consistency are key in pursuing your passion and building a successful writing practice.
Saving and investing should be balanced throughout different stages of a person's life for long-term financial growth.
Having a love for the process and pursuing what one is truly passionate about leads to more long-term benefits in creative pursuits.
Deep dives
The Importance of Persistence and Consistency in Writing
The podcast episode features Nick Majuli, who shares the story of his journey as a writer and blogger. He emphasizes the significance of persistence and consistency when pursuing your passion. Nick talks about how he started writing a blog post every week, even in the face of initial challenges and doubts. He highlights the importance of storytelling in engaging readers and shares lessons he learned from successful writers like Morgan Housel. Ultimately, Nick's dedication to his writing practice led to opportunities and career advancements, including becoming the COO of a wealth management firm.
The Evolution of Saving and Investing Over Time
In this podcast episode, Nick Majuli discusses the shifting focus of saving and investing over a person's life cycle. He explains the concept that saving is for the poor and investing is for the rich, highlighting that young individuals should prioritize saving money due to its immediate impact on their financial situation. As one's career progresses, investing becomes more crucial as investments provide the potential for higher returns. Nick advises mid-level professionals to put equal importance on both saving and investing, realizing that both aspects contribute to long-term financial growth.
Starting on the Path to Financial Growth
For those starting their personal finance journey, Nick Majuli suggests immersing themselves in educational resources to gain knowledge and understanding. He recommends reading books, watching informational videos, and listening to podcasts focused on personal finance and investing. By developing a foundational understanding of concepts like expected return and diversification, individuals can make informed decisions about their financial future. Nick emphasizes that there is no one-size-fits-all approach and encourages individuals to find investment strategies that align with their goals, risk tolerance, and personal preferences.
The Importance of Loving the Process
One of the main ideas discussed in the podcast episode is the importance of having a love for the process in any creative pursuit, such as writing or podcasting. The speaker emphasizes that it is crucial to have an insatiable curiosity and a passion for the research and preparation involved. They share a personal example of compromising their writing by focusing on popular topics for the sake of gaining more organic traffic. However, they realized that this approach affected their enjoyment and the quality of their writing. The speaker concludes that choosing to pursue what one truly loves and is passionate about, rather than solely focusing on monetization or popular trends, leads to more long-term benefits.
The Power of Sustained Effort and Consistency
Another key point highlighted in the podcast is the idea that sustained effort and consistency over time are crucial for achieving excellence and success. The speaker gives examples of individuals like Kobe Bryant and Tiger Woods, who dedicated themselves to their crafts through relentless practice and repetition. The story of the mountain man, Dashrath Manji, is also shared, illustrating how his 20-year commitment to carving a path through a mountain saved his village significant time and effort. The speaker emphasizes that success often requires repeated actions and a long-term mindset, rather than seeking quick hacks or shortcuts. They also discuss the significance of making good decisions early on, as they can have a profound impact on future outcomes, using NASA's decision to slingshot Voyager 2 around planets as an example.
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What’s the Matthew Effect? The Matthew effect explains how two people can start in nearly the same place and end up worlds apart. In these kinds of systems, initial conditions matter. And as time goes on, they matter more and more.
Instead of saving a fixed percentage of your income, save more when you earn more and less when you make less.
The best way to save more is to earn more, not cut expenses to the point of being miserable.
The real question money forces us to answer is what’s important to us in life.
You should save what you can, when you can. Relying on a fixed, prescribed savings rate is nonsense.
The Dolly Varden trout, an Alaskan fish species, puzzled biologists for decades. Despite only having a brief window of plentiful food each year — when salmon laid eggs in their waters — the fish continued to thrive year-round. How did they do it? Eventually, scientists discovered that the fish shrink and grow their digestive organs depending on food availability. When the salmon show up, they speed up their metabolism so they can take in more calories. Then, when the other fish leave, they slow down digestion. This way, they get by with much less food throughout the remainder of the year.
Great Things Take Time – Focusing on the long term is more important than ever. The story of the “Dashrath Manjhi Breakthrough” – He carved a path through a mountain. He moved a little bit of rock each day for 20 years.
Nick committed to writing one blog per week in 2017. And it changed his life. He learned that storytelling is what captures a reader’s attention. And the way to develop good stories is to read a lot, from a wide variety of sources. We all can do this.
One decision can change everything. NASA decided that Voyager 2 would slingshot around planets has made it the farthest man-made object from Earth. And it’s still producing information for us.
The Constant Reminder – How the Right Decisions and Compounding Can Lead to Huge Results. How have the decisions made by NASA 40 years ago had a profound effect on the Voyager missions and success to this day? Once a successful process is implemented, the results can be surprising. The point is to show you that making the right choices and letting things run their course can lead to incredible results. This is what makes consistent actions and the power of compounding so amazing. "When I think about creating a new habit in my life, I like to imagine all of the future benefits from that habit discounted back to the moment when the habit is formed."
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