If you’ve been following #ChickenTuesday on my LinkedIn updates, you’ll know that the YuillesPoules—our beloved flock of clucking beauties here in our backyard—are more than just a source of eggs. They’ve become a source of inspiration for many of my financial planning lessons.
And today, their wisdom shines a light on one of the most powerful forces in personal finance: compound interest.
Every morning, I head out to the coop with fresh food and water for the ladies. It’s a simple routine, taking only a few minutes, but it’s consistent. Over time, those small, regular efforts pay off: the chickens stay happy and healthy, and in return, they provide us with eggs. Some days we get more, some days less, but the overall yield is reliable, as long as we stick to the routine.
Compound interest operates in much the same way. It’s not about dramatic gestures or overnight success; it’s about showing up consistently, contributing regularly, and allowing time to do its work.
When you invest money, the interest you earn on your savings begins to earn its own interest. Over time, this compounding effect builds momentum, and the results can be extraordinary. It’s kind of like getting your money a job.
Imagine setting aside just 200 quid a month into an account earning a modest 6% annual return. At the end of the first year, you’d have contributed £2,400, but with interest, your account would show around £2,448.
Not groundbreaking, right? But let time do its thing. After 20 years of consistent saving, you’d have contributed £48,000 in total, but your account balance would be over £98,000. That’s the magic of compound interest—it turns small, steady efforts into life-changing growth.
Trusting the process
Of course, not every day in the coop is smooth. Some days, the chickens lay fewer eggs. Maybe it’s the weather, or one of them decides she’s not in the mood. But we don’t panic or give up on the routine. We trust the process because we know that over time, the results even out.
The same principle applies to investing. Markets will rise and fall; portfolios may take temporary hits. But when you focus on the long-term, those short-term fluctuations don’t hold as much weight.
Emotional decisions, like trying to time the market or pulling out during a downturn, often do more harm than good. Instead, staying consistent and trusting in the power of compound interest can lead to far better outcomes.
It’s easy to get distracted by flashy headlines about market highs and lows, but zooming out and seeing the bigger picture is key. Compound interest rewards those who play the long game, just as our chickens reward us with eggs over time.
Small actions, big rewards
The YuillesPoules remind me daily that it’s the small, consistent efforts that yield the biggest rewards. Whether it’s feeding the chickens or automating your monthly investments, the principle is the same: start where you are, stay consistent, and trust in the process.
So, if you’re just beginning your financial journey or looking to build stronger habits, take a lesson from the coop. Even small contributions can lead to significant results over time. And just like I check in on the chickens every day, check in on your financial progress regularly—making adjustments as needed but always keeping an eye on the bigger picture.
If you’re curious about how compound interest could help you achieve your financial goals, let’s chat. At Northern Cross Wealth Management, we’re here to help you lay the foundation for long-term financial growth—one step (or egg) at a time.
