Compound interest accrues and is added to the accumulated interest of previous periods, meaning borrowers must pay interest on interest as well as principal. So, an annual compound interest in year 3 would include the accrual of years 1 and 2 so it would be 6% on $112,360 (2 years of accrual at 6%) or $6,742, not just $6,000. Compound interest is great for a lender or investor and not so great for a borrower.
Knowledge can be specific to a particular area and the value of that knowledge—like knowing how to make a martini or what the capital of Missouri is—doesn’t necessarily have a cascading effect on other domains. So, it’s like simple interest.
On the other hand, wisdom is more global in its value based upon the accrual of your life experience. Developing your wisdom on how to lead, or how to intuit whether to trust someone, offers a compounding interest that can improve the rest of your life beyond the knowledge domain.
In sum, wisdom is more valuable than knowledge in your bank account of life.
P.S. Join me and Louie Schwartzberg, director of the award-winning documentary Fantastic Fungi, tomorrow for a live conversation on his latest documentary, Gratitude Revealed.
In Fantastic Fungi, Louie explored the magic of the natural world beneath our feet; in Gratitude Revealed he takes that wisdom above ground, and journeys into the soul to celebrate the human spirit. Everyone who registers will get a 3-day Early Access Pass to screen this still unreleased documentary!
Live Fireside Chat: Gratitude Revealed with myself and Director Louie Schwartzberg. April 6th @ 12-1pm PT | 3-4pm ET
Register For The Live Event Here: http://bit.ly/3mcJHUz
