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5 Insights That Will Help You Learn More Effectively

How knowledge compounds

“Read 500 pages every day. That’s how knowledge works. It builds up like compound interest” — Warren Buffet

It is not easy to intuitively grasp that knowledge compounds. But, if Warren Buffet says so, there should be some truth to it. He has compounded money at a rate of about 22 % for decades. In 80 years, $1 turns into over $8 000 000 with that rate of return. Buffet might be the person in the world that has the deepest understanding of compound interest.

So, why is it useful to know that knowledge compounds? Well, so that you realize that what might seem like tiny improvements can turn into tremendous advances later.

Starting reading a few pages a day can put you down a whole different path in life. Pretty soon, you are thinking more rationally and have better ideas.Better thoughts lead to better actions, and suddenly your life is a lot better.

You have more preexisting ideas to connect your new knowledge to as you accumulate knowledge. That means that your understanding will become deeper and deeper. You have a web that just gets strengthened as you build a more thorough understanding of the world.

You also get better at learning as you practice it. That means spending the same amount of time trying to learn something after honing the skill for years will result in a better outcome. It is difficult to know your progress in a complex endeavor. Seemingly out of nowhere, you can write code well enough to make an app or play a kick-ass guitar riff if you keep practicing.

Often, when we are trying to learn something new, there is a long period where it feels like we make no progress. Suddenly, we are getting results. That is just compound interest starting to work its magic.

“Compound interest is the 8th wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” — Albert Einstein.

Interestingly, compound interest doesn’t only affect finances or learning; it affects relationships, habits, and everything that we do.

1. Compound interest and how to value your time

Many people use their hourly pay to estimate how much their time is worth. But, should you consider your current pay or how much you might get paid in the future?

You could, for example, consider future compounding when you determine how to use your time. Okay, that might sound a bit abstract, but I will give you an example.

If you are a young, upward-moving, motivated individual, your time at this current moment might not be extremely precious in terms of how much you get paid. If you continue engaging in good habits, make yourself more valuable to your employer, double down on your education, etc. you might get paid 10 times as much a decade later. Then, should you really think of your time as worth $20 an hour (if that is your current pay) or a lot more?

I would argue that your time is worth a lot more, and you should treat it that way. It is not necessarily about what you get paid in a job at the beginning of your career, but what you learn.

As you know by now, knowledge compounds. That is why we go to school at the beginning of our lives and not at the end. Therefore, it is not necessarily the highest paying position you should go for after graduation but rather the one with the most learning potential.

You can also look at your spare time the same way. If you are motivated and hard-working, you will probably find a way to become more valuable in the economy over time. That means that you should already consider your time as highly important even though your current pay doesn’t reflect that.

Don’t wait in line for 30 minutes to get a free hamburger. That time could have been spent learning, which over time could give a significantly higher return. These days, I spend my time two ways. I am doing something that will improve my future life, like reading, working, going to the gym, or having a cool experience.

In my opinion, the time we spend that isn’t useful or very fulfilling can just be replaced by being productive. That way, we still have time for exciting experiences, but we remove a lot of “dead time” and maximize the future as well.

2. Bloom’s taxonomy

Bloom’s taxonomy is a set of models used for classifying learning into levels of complexity. It is excellent to determine how well we understand something.

The model has six different levels:

  • Remembering facts.

  • Understanding facts.

  • Solving problems in new scenarios by applying knowledge.

  • Analyzing and seeing how specific information relates to other things.

  • Being able to evaluate the validity of ideas.

  • Producing a unique communication by putting parts together as a whole.

As we can see, the deeper we go into something, the more possibilities open up. If you know a bit about history, you might recall some facts about WWII, for example. If you have read many history books, you might begin to see connections between different historical events, and your “intuition becomes activated.”

If you are an expert, you might see things in a new way and write a great book with a new outlook on something. That is how knowledge compounds. The rewards get bigger and bigger.

3. Subject matter expert

Almost nobody has a unique thought in their lives. We mostly go around thinking about stuff we have read or heard somewhere else. It is literally only subject matter experts that spend their entire lives learning from the best that might be able to see things in a new way that nobody else before them thought about.

“If I have seen further than others, it is by standing on the shoulders of giants” — Isaac Newton.”

As you get a deeper understanding of a field, you might get asymmetrical rewards.That is why subject matter experts are in a unique position.

A good example is the best AI specialists. The top ones get paid millions a year.If you are at the top of your field, you can probably monetize the skill somehow. You get an excellent salary in most cases, but you can also consult, write books, and do other things.

If you are good at something valuable, it will be effortless to monetize the skill. Of course, if you are passionate about swimming with the dolphins, it might be difficult to monetize it, but if it is something that many people consider valuable, you are in a great spot.

Robert Greene had around 70 different entry-level jobs while he was young. That allowed him to see human behavior in many different contexts. In addition, he was an aspiring author and read a lot of history.

His unique background allowed him to understand and conceptualize laws for human nature, making him highly successful as an author. Very few others had the same understanding of human nature since they didn’t experience as many different social situations and read what he did. That made him a subject matter expert.

4. Having multiple mental models

“You must know the big ideas in the big disciplines and use them routinely — all of them, not just a few. Most people are trained in one model — economics, for example — and try to solve all problems in this one way. You know the old saying: “To the man with a hammer, the world looks like a nail.” This is a dumb way of handling problems.” — Charlie Munger

It is useful to have a broad knowledge base because it allows you to tackle problems in different ways. Often, new insights come from combining knowledge in a new way.

“Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while.” — Steve Jobs.

Many of the most successful people are polymaths, meaning they have a broad knowledge base. Learn from the best ideas in all fields. Reality is multidisciplinary, and it doesn’t care about the confined space between different areas.

Here are some famous polymaths:

  • Elon Musk

  • Jeff Bezos

  • Charlie Munger

  • Benjamin Franklin

  • Thomas Edison

  • Nikola Tesla

  • Leonardo da Vinci

“It is important to view knowledge as sort of a semantic tree — make sure you understand the fundamental principles, i.e. the trunk and big branches, before you get into the leaves/details or there is nothing for them to hang onto.” - Elon Musk

An example of the importance of seeing a problem from different viewpoints can be understanding depression.

Arguably, these things can work against depression:

  • Spending time in nature

  • Spending time around people and feeling a sense of connection

  • Having a positive outlook

  • Healthy nutrition

  • Exercise

To understand these things deeply, you need to look at biology, physiology, psychology, sociology, and much more. As you can see, to understand something at a deep level, it is best to see how information from different fields intertwines.

If two people read the same book, the person with the most knowledge will learn the most. They have more mental models to link up the information to and will learn more as a result.

5. Timeless wisdom versus short-lived information

Focus on learning fundamental principles and big ideas rather than the new trendy thing. It is a big difference between learning something foundational and looking at information that will be outdated. It is much wiser to accumulate foundational knowledge that doesn’t expire in 10 years than to constantly stay updated on things that will be outdated a couple of years ahead.

Wisdom is simply an extension of understanding. It is knowing what to do with the knowledge you possess in the context of daily life. There is a big difference between knowing something and internalizing that information.

Before you know it, you are wise and capable of applying your knowledge to the circumstances in your life. By reading and learning continuously, you begin to see patterns and realize that all fields are interrelated.

Personal experience

Knowledge compounds, and it also compounds your circumstances. I started reading books three years ago in English, and although I read some books in my childhood, I could not have imagined writing three years later. I still have a lot to learn, but simply writing some articles that people find valuable didn’t seem possible back then.

As you upgrade your thoughts by learning, your outlook will change, impacting what you do. Pretty soon, the power of compounding knowledge has transformed your life.

Final thoughts

Many highly successful people read a lot or had a period early in their lives when they read many books. Their knowledge compounded over time which accelerated their results as well.Elon Musk reportedly read up to 10 hours a day when he was a child.Warren Buffet reads a lot, and Barrack Obama is also a big bookworm.

What is the best time to start learning? As early as possible. Then, you have the chance to apply the knowledge, and your results can compound. Knowledge compounds as well, which creates a double-effect. The second best time is to start now.

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