Play in Decades
There is almost nothing that won't yield to you after a decade of work.
A = P(1+r)^n
A = P(1+r)^n is what makes compound interest work. A = P(1+r)^n is what makes dollar cost averaging the S&P 500 the proven method. A = P(1+r)^n is the reason why you should play for decades.
A = P(1+r)^n is better known as the equation for returns. A represents your investment amount. P represents the principle or initial investment. The r is the rate at which the investment grows. While the N is the number of years involved with the investment. Better put the N is the most powerful part of the equation. N is the power that the equation is raised to and N is what makes compounding work.
Let’s say there are two weightlifters and they are comparing their max squat. They have similar builds, body weights, and body fat, and overall, they are rather similar humans. When they both started they could squat 225 lbs., their initial investment in a sense. One has been lifting for 10 years and has grown his squat at an average rate of 6% each year while the other has been lifting for 3 years and has grown his squat at an average rate of 15% each year, who do we think can lift more?
Plugging the numbers into the equation we find:
225 lbs. * (1+.06)^10 = 403 lbs.
225 lbs. * (1+.15)^3 = 342 lbs.
The lifter who has been training for ten years squats heavier with much of the difference attributed to them training for 10 years instead of three. Each additional year of training their squat, the base grows larger and the number of pounds attached to the 6% growth rate continues to expand, becoming larger thanks to a heavier base from which to build. It is about loving what they do, squatting, and stacking year after year on each other for ten years. The N, or time, is what allows the compounding to work and their max squat to grow. Each day, week, month, or year in the gym all stack upon each other.
It is hard to beat the person who never gives up and continues to stack years upon years on each other. It is hard to beat the person who plays with no outcome in mind, just a commitment to the process. An unwavering love and passion that no matter what the outcome may be, it is the process that keeps them coming back and keeps them moving forward. This idea has never had a higher alpha.
Kurt Warner played in decades and thanks to it he got to realize outsized returns on his football career. He played college football for Northern Iowa but it wasn’t until his senior year of college that he finally got a real chance to play. Previously in his first three seasons, he found himself stuck as the third-string QB.
The three years of boring drudgery paid off, however. In his senior season, he finally got a chance to start. In that season, he would go on to be named the Offensive Player of the Year and First Team All-Conference. Safe to say his football obssession and all those third-string reps were worthwhile. After his senior season, he went undrafted and was invited to the Green Bay Packers training camp but ultimately was released before the start of the season.
Now with an NFL career on hold, he needed employment. He would go to the local Hy-Vee grocery store and get a job as a Night Shift stock clerk while also spending time being an assistant for the Northern Iowa football team. During this time, he lived in his parent’s basement with his future wife, it was the NFL at any cost.
Throughout his time as a clerk and a coach, Warner wished to land another NFL tryout but never did. Instead, he left behind his coaching and stock-shelving duties to play in the Arena Football League. His play would not only later land him in the Arena Football Hall of Fame but it would catalyze his NFL career as well. His Hall of Fame NFL career that is, where his accomplishments, records, and awards could span multiple pages.
An undrafted NFL free agent who spent four years trying to get into the league to now one of the best to ever do it. Quite the ascent.
He spent three years riding the bench in college and if that wasn’t enough, he spent four years between college and the NFL before he even sniffed an NFL roster. For 99% of people, their career might have sung its final hum before they even got the opportunity to start in college, quitting during the three years spent being a third-string QB. For 99.9% of people, their careers would have undoubtedly been laid to rest when they spent four years post-college before they even got a shot at the NFL. Quitting before an opportunity ever came along.
It is a dogged persistence. An unwavering commitment to the goal. A belief in the process and not a worry in the world about the outcome. Not a worry in the world because the belief in the process provides the belief in the outcome, a belief the outcome will eventually figure itself out because there is so much passion, love, and curiosity behind the process.
These stories are rare. Kurt Warner is considered one of the greatest Cinderella stories in NFL history. It is hard to see how it may ever be topped, commitment is becoming a scarce commodity.
The attention economy is operating at all-time highs. It has never been harder to get someone’s attention. People want meme stocks to go to the moon but what has really gone to the moon is the premium you must pay to get someone’s attention. Dopamine has never been more abundant thanks to technology. Time horizons have shrunk and people are drifting passively between things hoping one will stick while never committing. It is a commitment crisis.
You can spend all your time drifting without ever committing but the shorter your time horizon, the more people you’re playing against. If you continue to drift between opportunities every few months, your competition will never be fiercer. The competition pool will never shrink when done this way because you never outlast anyone. It is necessary to find one thing and commit to it. Over time, natural selection will take place and the pool of people will shrink. It is true anywhere.
Around 1,000,000 people play high school football in the United States in a typical season.
Roughly 70,000, or 7%, of those individuals will play for the NCAA, or play in college essentially.
Of those 70,000 college athletes, 16,000 of them will be eligible for the NFL draft in a given year.
254 of the 16,000 draft eligible athletes will get drafted. A pool once as big as one million people now sits at just 254 that’s .0254% of the initial pool of players remaining.
Not to mention, we could go even farther down the rabbit hole and look at what percent of drafted players actually make NFL rosters when the season rolls around, shrinking that number even more.
Case in point it is incredibly hard to make the NFL but it also shows how the longer you compete, the number of people you are competing against dramatically decreases. There’s a tremendous power to playing in decades. Few do it.
Sport teaches but it is also not alone. Compounding interest, or A=P(1+r)^n, is a beautiful phenomenon because it allows us to retire when done correctly. From 1871 to 2012, there was not a 30-year holding period of real market returns that did not earn a positive return. If you put your money away for 30 years and let compounding work, you would be sitting pretty. The beauty of it is we are allowed to play in 30-year periods. We aren’t judged similarly to Wall Street where we judge those firms on their monthly, quarterly, or yearly returns. Most of them can’t play in decades.
There are tremendous returns to playing in decades. It is how you lead an asymmetric life. Graham Weaver put it quite well,
“There is almost no obstacle that won’t yield to you at full power for a decade.”
It has never been easier to differentiate yourself by playing the game simply because of your love for the game. Simply because you want to play for decades. Playing in decades leads to an asymmetric life. A life in which the downsides are few and the upsides are exponential. At a certain point, natural selection takes places and it becomes a category of one.
Figuratively, Kurt Warner probably could have paused when he landed his first NFL gig as the St. Louis Rams backup quarterback and realized the past seven years of having limited opportunities, including four of no NFL chances, that there was no one else left to compete with him. No one right there with him still vying for an NFL roster spot after those four years, everyone else had already yielded to the obstacle and admitted defeat.
Sport is a great teacher. We saw this when Kobe didn’t score a single point in his eighth-grade summer, when Jordan got cut from his high school varsity team, when Curry was 5’8” and 160 pounds soaking wet in high school and was considered too small for his high school team, it is everywhere. They loved what they were doing and were willing to do it for a long time no matter the adversity they faced. Great things take time.
Success is hardly ever linear. It is a roller coaster where each hill, and thus peak, is higher than the next. It is only when you have been going at it long enough that these hills, peaks, hardships, and whatever life throws at you, will yield to you. You may lose the battle and the clock may have hit zero but you won’t lose the war. Kobe may have lost the battle his eighth summer but he won the war becoming one of the greatest to ever do it. Jordan may have lost the battle his sophomore year but he won the war becoming the greatest to ever touch a basketball. When you are playing for decades you will win the war simply by outlasting your opposition.
Time is on your side and time is a powerful tool when you operate in long time horizons, it is where the real success is found. There is a reason why compounding is the eighth wonder of the world and A=P(1+r)^N works. It has N, or time, to thank. With a decade of work and a decade of time, there is almost nothing that won’t yield to you.
Appreciate you reading.
-Scantron
Scantron’s Selections - A few things I loved this week.
How to Lead an Asymmetric Life - Graham Weaver - A criminally under watched speech to the graduates of the Stanford MBA program. Do hard things, do your thing, do it for decades, and write your story.
Five Revealing Pictures - Tom Morgan - Proof from 1871 to 2012, there was not a 30-year holding period of real market returns that did not earn a positive return. The other four pictures are great as well.
Michael Easter - The Diary of A CEO - Your health matters. The world is being optimized for us to become comfortable and thus health sometimes takes a back seat. Michael talks on what we can do to stay young and stay sharp.