Albert Einstein once said—or so legend has it—that “compound interest is the most powerful force in the universe.” Einstein knew quite a bit about how to create “powerful forces” from near scratch. He understood that infinitesimally small atoms, when properly tinkered with, could unleash more power than a volcanic eruption. But Einstein did not gift us a quote stating that compounding atoms are the most powerful force in the universe; he said “compound interest.” In other words, the potential for astronomical change which Einstein witnessed in atoms could be applied to an array of other infinitesimal units as well. In fact, Einstein seems to have wished to convey that when infinitesimal units of all sorts compound against each other over time, the results will be—explosive.
The rich get richer and the poor get poorer—this, we already know. In fact, we know this principle so well that we have forgotten how elegantly it describes Einstein’s aphorism. It has become awash in stereotypical images—Wall Street fat cats who get even wealthier because they are privy to insider trading tips they overhear in the sauna and straight-A students who end up working at a gas station to pay off their mother’s rehab treatment rather than attending Yale—where they belong. We know how easy it is for a millionaire to make another million; we know we waited too long to start saving for retirement; we know that we can make more money by doubling a penny every day for a month than grabbing at a quick ten million dollars. Yet, none of these truisms really capture exactly what makes the compound effect the most powerful force in the universe.
Compound interest does not only apply to money; it applies to everything. Whenever we invest in something—a hobby, a foreign language, a diet, an education—the tiny “deposits” we add daily to this endeavor will exponentially pay out in the long run. I can best explain this idea through my own personal journey with learning foreign languages. At the moment, there is only one other language besides English in which I am really, truly fluent—and that is German. With German, I can read the newspaper, chat with anyone about almost anything, listen to and understand the prime minister’s speech, and teach a yoga class. I also speak Hebrew, but not as sophisticatedly as I do German. With Hebrew, I can sort of read the newspaper, if I have a dictionary and if I have the patience to slog through an article. I can chat with Israelis about my life and my interests but I could not truly express my political opinions or summarize for them a short story by Hemingway. I am also currently learning Polish. With Polish, I am little more than an absolute beginner. I ccan introduce myself, explain where I am from, and say a bit about my life and interests. To even discuss the weather would be an immense challenge.
One might think that, because my Polish is so bad, and my German is so good, my Polish, which has so much room for improvement, will progress far more rapidly than my German, which already has its best days of advancement behind it. In fact, the opposite is the case. The truth is that we might say that I am “rich” in German, “middle-class” in Hebrew, and “destitute” in Polish. Because I am already so advanced in German, I have access to nearly all the facets of German-speaking life. I can listen to podcasts in German, go to lectures in German, write letters in German. As a result, my German improves astronomically from month-to-month. When it comes to German, I am like that Wall Street fat cat who can let his money work for him, who can buy a fourth house with the profits he made by renting out his third house, and who just happens to find himself at the cocktail party where he just so happens to hear about yet another investment opportunity. Meanwhile, my Polish remains at the 101 level; I was supposed to go to a job interview today to become a garbageman but my car broke down on the way there and I did not have enough cash to pay for a taxi—and obviously I don’t have a credit card. So, I went home and remained unemployed. And my Hebrew probably improves at a steady, unimpressive rate; I make just enough money to pay my bills on time and the little I have left to save instead I use toward a gym membership and a two-week European vacation. The rich get richer, the middle-class stays middle-class, and the poor get poorer.
In these three disparate cases, we get a glimpse into why Einstein said that compound interest is the most powerful force in the universe. The “wealth” I have accumulated in German is continually multiplying and remultiplying itself, reaping enormous gains without my having to do much work anymore. I can just sit back and watch Scholz give a speech and chill; meanwhile, I’m learning. By contrast, my impoverishment in Polish makes my Polish even worse—that is, it compounds negatively. Because my Polish is so bad, I will often let days or weeks pass by without practicing it; I have no opportunities other than flipping through flash cards which I rarely have the urge to do. In his book The Compound Effect (which has immensely influenced this “life tip”), entrepreneur Darren Hardy brilliantly shows how fitness and weight loss also vividly play out the volcanic potential of the compound effect. People who are already fit can get even more fit much more easily than those who are severely out-of-shape. If you’re fit, it is no trouble to add a ten kilometer hike to your workout; whereas if you’re obese, even doing that second push-up might feel like a Herculean effort.
An interrelated concept to compounding is tipping. Tipping. Tipping was the inspiration for Malcolm Gladwell’s bestselling book The Tipping Point. Gladwell, however, does not, so far as I can recall, explicitly discuss how the compound effect is almost always what allows tipping to occur. Moreover, Hardy, though celebrating the wonders of the compound effect throughout his book, does not discuss the fascinating instance of tipping which compounding allows for and even necessitates. Gladwell describes tipping as “the moment of critical mass, the threshold, the boiling point” (12). The tipping point is where, suddenly, what had felt like an eternally long uphill battle switches to its being all downhill from here. The tipping point is where friction becomes momentum. It is that moment where, all of a sudden, everybody has Covid, or watches Game of Thrones, or is on Facebook or listens to the Beatles, or believes in Christianity (in reverse chronological order). But for this tipping to occur, a lot of compounding interest had to have been brewing, stirring, multiplying, compounding during the preparatory leadup. The reason why it feels as though one day no one had ever heard of the Beatles and the next they are playing on the Ed Sullivan Show is because of the compound effect. The compound effect means that, almost without warning, what had been slow and steady gains will become astronomical, uncontrollable surges. This is the moment of tipping, and there can be no turning back from it.
On the evening of September 22, 1912, Franz Kafka became Franz Kafka. It was on this evening that he wrote in one sitting the story which he himself saw as his breakthrough work. This story was “The Judgment” [Das Urteil]. The next day, Kafka wrote about the experience in his diary. He wrote:
I composed the story ‘The Judgment’ in the night from ten o’clock in the evening until six o’clock in the morning without stopping. I could scarcely pull my stiff legs out from under the desk thereafter. The horrifying pain and joy I experienced as the story unfolded out of me as if I were advancing over water … How everything can be said, how for everything, even for the most foreign epiphanies a great fire waits at the ready in which they are consumed and then resurrected … I looked at the clock at two in the morning for the final time. As the maid went through the hallway at dawn, I wrote down the final sentence … The sight of my undisturbed bed, as though it were just brought into my room. My conviction that my hitherto work on my novel had been carried out in the most disgracefully abject of circumstances. Only in this way can writing occur, only in this coalescence of forces, in which body and soul fully open themselves upwards.
In Kafka’s diary entry, one can discern the twenty-nine year old man’s ecstasy, amazement, and above all, gratitude. Why gratitude? While this story may have been quite literally written overnight, Kafka’s progress as a writer did not happen overnight. In fact, Kafka had been scribbling away in his notebooks for about ten years before he was able to write this story. And the stories which Kafka wrote in his younger years, from 1902 to 1912, are not very impressive. Scarcely anyone knows them or has read them because they were not written by “Kafka” but by the hack who would become Kafka. These were the ten years of investing, socking away little bits of cash, of an almost imperceptible compounding. As a writer, these were years of frustration for Kafka. He had begun to develop his craft of composing the taut, vivid, cinematic gestures which would remain a trademark of his writing throughout his career. But this craft was, at this point, unrefined, amateurish, and even aimless. Nevertheless, Kafka needed this time in the workshop, so to speak, for masterpieces to arise out of him years later. When Kafka wrote “The Judgment” on September 22, 1912, he was at last ready to tip. The underwhelming progress he had made in the ten years prior had been stealthily compounding and was now ready to make its atmospheric jump. After Kafka wrote “The Judgment,” he composed one of the greatest works in all of literary history just a few months later—“The Metamorphosis.” A year later, he wrote The Trial, a work which competes with the likes of Moby Dick and War and Peace as the greatest novel ever written. For the next twelve years of his life, Kafka essentially wrote one masterpiece after the next, each now a hallowed treasure in the annals of literary history. When you tip, you really tip.
In chapter sixty of Isaiah, the prophet describes another moment of tipping. This time, tipping should happen not to an individual but to an entire nation. The Israelites are in exile in Babylon, and Isaiah promises them that they will soon return home. Not only will the Israelites return to their homeland, they will also become a feared and powerful nation. The chapter describes how, ironically, even though the Israelites are now oppressed by other kingdoms, in the future these kingdoms will rush to the Israelites to give gifts and pay homage. Isaiah declares that “All coming from Sheba [Ancient Yemen] will bring gold and frankincense” (60:6). He proclaims that “the descendants of those who once subjugated you will bend the knee before you, and those that hated you will bow down before the soles of your feet, and they will call you the Holy City of Zion, God, and Israel” (60:14). It is apparent here that Isaiah foresees an utter reversal of the Israelites’ fortunes. But he also employs a word which has no equivalent in English—or, so far as I know, in any other language—which elegantly captures how this reversal of standing occurs through the phenomenon of tipping. This word is “yih-hafech,” found in chapter sixty, verse five, which gets translated in English as “will be turned around.” In Hebrew, adjectives can be easily formed into verbs just by playing around a bit with the root letters underlying the adjective. The word for “opposite” in Hebrew is “efech.” We have the word “opposite” in English, but we do not have a verb equivalent to this adjective. We cannot opposite something. We might express “to opposite” as “reverse the fortunes of” or “turn the tide of” or just “reverse.” But “to opposite,” especially as employed by Isaiah, is really just “to tip” in Gladwell’s sense. Unfortunately, we cannot say in English Gladwellianly Tip without figuratively or literally injuring our tongues in the process. Hebrew, however, does not need to engage in linguistic acrobatics to formulate Gladwell’s concept. It simply takes the adjective of “opposite” and turns it into a verb. When Isaiah says “yih-hafech,” he literally says to the Israelites that their fortune “will opposite.” In fact, what he is really telling the Israelites is: you guys are about to tip.
Over two-thousand years later, Israel is tipping again right before our eyes. For decades, the tiny, poor, ramshackle country was investing in itself, day-after-day, year-after-year. But for all of these decades, the battle was still “uphill”; Israel was still on that unhappy side of the mountain. Nevertheless, though it may not have always been visible or apparent, these investments were simmering, multiplying, copulating, compounding. And, in just the last few years, Isaiah’s prophecies are proving to be uncannily accurate. One country after the next is now, after refusing to recognize Israel’s existence and legitimacy for decades, is shaking hands with Israel and politely asking her to do business. Israel is tipping, Israel is lih-hafeching. And fortunately, as we know from Kafka, once you tip, you don’t go back.
When we are advised by our financial adviser or some random elderly person to start regularly investing a small amount of our income while we are young, before it’s too late, what they are really telling us is: for God’s sake, man, compound, compound, compound so that, eventually, finally, you will one day tip. While this is erudite counsel within the sphere of finance, not to be taken lightly, we need not limit this wisdom to our 401K. For when another old man—Albert Einstein—dispensed this advice, he was clear to expand its scope not just to dollars but to the universe itself.