Compound interest arises when interest is added to the principal, so that, from that moment on, the interest that has been added also earns interest. This addition of interest to the principal is called compounding. It’s the same concept by making small connections with people to build up your network for your real estate business.

“Compound interest is the eighth wonder of the world. He who understands it, earns it, he who doesn’t, pays it.” 
– Albert Einstein

While not everyone takes advantage of compound interest, this is universal knowledge. But what most business people don’t pay attention to is the compounded interest of the ACTIONS they take everyday–nor the compound interest of the PEOPLE they have relationships with.

That’s how we came up with our minimalist approach to building your People Portfolio. Think of it as a simple 3×3—meet three people face to face, every day.

  • Contact them three times over three weeks (the first meeting counts as contact).
  • The objective is to add three people to your Portfolio weekly.
  • This simple strategy has compounded effects on your business, just as every leg or arm movement does while falling from 12,000 feet above the Earth.

Three people per week adds up to 150 people in your database per year. At the end of three years, you’ll have approximately 450 people in your People Portfolio–and if nurtured as we have recommend, will equal roughly 30-60 transactions per year just from your people base. That’s a lot of opportunity to grow with a minimum amount of effort. Even if you are an introverted real estate agent, there’s pockets of success!

At the end of ten years you’ll have 1,000-1,500 people in your database. Now that is a sustainable business.

Compounded action pays BIG dividends

One of the things I’ve learned in my last seven years of creating new habits is the power of compound action interest. It sounds really obvious when you say it, but if you do something small repeatedly, the benefits accrue greatly over time. It’s obvious, but not everyone puts it into practice.

Here’s how to create action investments. It’s a fairly simple process that you can repeat with any of these various types of action investments:

  1. Pick something desirable like meeting new people. If you repeatedly do this activity, what will it grow into? Is that what you want?
  2. Do just 20-30 minutes of it per day. You can’t build it all up in the next few days (that’s a good recipe for failure). Do it in short spurts and smile as you do it.
  3. Set a daily reminder. Let’s say you want to do this task every day at 10:30 a.m. Set a reminder, and make it a priority to do it each day, just for five minutes.
  4. Watch it grow. If you just do it repeatedly, it will grow. Don’t force it. Keep the repeated activity as small as possible for as long as you can if you want it to grow (it sounds paradoxical, but it works).

A few warnings:

  • Don’t worry about doing a lot of it. As you repeat this new habit, don’t worry about growing it. That’s a good way to fail. Most people fail at adopting new behaviors because they try to do too much too quickly.

  • Don’t worry about missing a day or two. This is another reason people fail—they miss a day or two, then just give up. If you miss a day or two (or three), just start again. It doesn’t have to be a big deal.

  • Don’t do a bunch at a time. Do one per day at the most. Remember, small time chunks.

You’re making daily deposits, tiny investments in who you are. 

What do you want to invest in?

Can you make tiny contributions to your People Portfolio? Health? Value? Growth? Infrastructure?

Getting the point? You can invest in something that will grow your business and enhance your life in small ways that add to big interest, or it can be a life of distraction and bad health.

It doesn’t take Warren Buffett to decide what is a better investment.