Applying the Rule of Compound Interest to Your Career

In 2014, the year I got married and the year before I became a mother, I rented a private office in a coworking space in downtown Washington, D.C. 

It cost $850/month, which seemed like a lot then, and thinking about it now, still seems like a lot. But I wanted a quiet place to work on my business outside of my townhouse, a space where I’d have reliable Wi-Fi, a comfortable desk and zero distractions.

I didn’t want to carry that expense long-term, and I thought of the investment as a sort of sprint: for a year, I would put my head down and make as much progress as possible growing my content agency. 

That was the year I hired my first business coach, Charlie Gilkey, who helped me better systemize my business. It was the year I read Built to Sell, even though my goal was never to sell the business; I read the book to learn and apply its principles, so some of my business could run without me. 

Seven months after I rented the office space, a client we’d worked with over the past year, The Penny Hoarder, inquired about buying my business and bringing me and several members of our team in-house to grow the content operations. We managed to make the transition just a couple of months before I gave birth to my first child.

Looking back, the year I spent building my company, in that tiny, expensive office with no windows and no distractions, was such a good investment in myself. I saw some immediate returns on my investment, with the growth of my business and the acqui-hire, but the biggest gains wouldn’t be realized until years later.

How I think about the phases of my career

I think of my career as going back and forth between two phases: the head-down phase, and the looking-up phase.

When I’m head-down, I’m building hard, ignoring distractions and getting sh*t done. That year in the downtown D.C. office was a head-down phase. I worked hard and stayed focused. 

When I’m looking up, I’m meeting people, exploring ideas, experimenting and learning. In a looking-up phase, I allow myself to follow the twists and turns of ideas, pulling threads and following online bread crumbs to see where they’ll take me. 

The head-down season tends to get all the glory; society rewards hustle culture, and most of us like to feel productive, which comes more naturally when you’re focused on execution.

But the looking-up phase is more important than it looks, for one simple reason: You won’t get a lot out of your head-down season unless you look up first. 

Not only does the looking-up phase offer the chance to recover from the grueling pace of head-down work, looking upward and outward also brings clarity, creativity and ideas. I’m in one of these looking-up phases right now, and I feel full of positive, creative energy.

During that head-down season when I rented the office, I spent some of my energy growing The Write Life, a content website for writers. My team and I launched the brand in 2013, when I’d been running a boutique content agency for a few years, helping other companies create and publish content on their blogs.

We had developed efficient systems for doing the work, and I recognized an opportunity: What if we applied the systems we’d created and the network of freelance writers we’d cultivated to our own website property? It wouldn’t require that much extra work to run one more blog, and as a bonus, we could use that property to experiment with new ideas, technologies and systems before rolling them out to our clients.

I used some of the profits from our client work to get The Write Life up and running. Even then, I understood that while the work we did for clients paid well immediately, running our own site — if it was successful — could be more lucrative in the long run.

Investing early and often

I managed to launch The Write Life while also balancing client work because of previous investments I had made in the business. Rather than trying to service all our clients myself, I ran it as a small agency, so I had support from a team of writers and editors. 

I see creators who work on their own wrestle with this balance, wanting to grow their own newsletter or brand but struggling to make the time because they rely on client work for income. Usually this strategy requires growing the high-potential asset on the side of a full-time role until it gains enough traction to provide meaningful income. Of course, that’s easier said than done, especially if you have caretaking or other life responsibilities that make it difficult to work long hours or juggle multiple projects.

I did that juggle back in 2011, when I was working full time for U.S. News & World Report and running a freelance social media business on the weekends. It was a lot, but I didn’t yet have a significant other or kids, so it didn’t feel like a sacrifice to spend my free time building my side business. In fact, I enjoyed it. This was one of those head-down phases when I invested time in myself without knowing exactly how it would pay off later.

Looking back, that year was a turning point, a snowball beginning to roll downhill. I launched my first ebook on how to build a part-time social media business (back when I knew a thing or two about social media), and people actually bought it. I realized I could earn money through ebooks, online courses and whatever else I wanted to create because I’d grown an email list of people who trusted me. (I just looked back at my records, and over the years I sold 1,472 copies of that first ebook, bringing in about $32,000.)

That year, I made a deliberate decision to invest in myself: I left my full-time job and transitioned from a head-down season into a looking-up one. I continued to work hard building my blog audience and freelance business, but I also indulged in lots of online experiments, learning how to use online tools and meeting other people who were just as excited as I was about this new way of making a living. I’m still friends with some of them to this day.

That was a season of learning, and I rode the wave until it morphed into a head-down phase a few years later when I rented the downtown office.

When career compound interest finally pays off

In retrospect, I see just how long this particular head-down season lasted — five years! — and why I was so eager for a break. 

I went straight from pushing hard to grow my business in that downtown office to building a content team at a fast-growing startup. I had two babies during those years, and I didn’t come up for air until 2019. 

Looking back, that head-down season was too long. It sucked a lot of energy out of me, and I’m still building that back up. But my career and mommyhood collided, like they do for many women, and I wasn’t willing to give up either one. So head-down I stayed.  

I’d hoped 2020 would be a looking-up season, but I couldn’t find my flow state during the mess of that pandemic year. Now, in 2021, through a combination of reducing my workload and regular childcare, I’m excited to be in a place again where the ideas truly flow. It reminds me of a decade ago when I launched that first ebook, with so much to learn and so many opportunities ahead. It’s a good place to be. 

And it’s just now that some of those career investments I made years ago — renting that expensive office, growing my side hustle on the weekends, and starting The Write Life — are paying off. After purchasing my company in 2015, The Penny Hoarder went on to be acquired by a public company at the end of 2020. And now I’m preparing to sell The Write Life. I celebrated wins for each of these projects throughout the years, but it took time for my early investments to truly compound.

The compounding feels palpable in other ways, too. My husband and I used to dream about us each running our own businesses, having flexibility over our schedules, and living in a town where we could hike from our door. Some days, I still can’t believe that we’re here, that I can walk up the mountain this morning if I want to. It took years, both literally and figuratively, for the work to pay off and the opportunities to align.

Manufacturing compound interest for your career

Entrepreneurship is just one way to invest in yourself, and I’ve learned by now not to recommend it to everyone; the lifestyle isn’t a fit for every personality. Yet the idea of applying compound interest to your career — and really, to your life — can work even if you take a different path. 

The lesson isn’t to invest in yourself a particular way, but to simply invest early, in whatever way makes the most sense for you. Invest in your skills, in your network, in truly knowing yourself — these assets will gather steam over the years. 

Invest money if you can, but most importantly, invest time and energy. Put in the work.

In my current looking-up phase, I’m thinking about this as I consider what to build next. I’m not focusing on how to make money tomorrow, although I do believe in making profit along the way, because it enables bootstrapping and maintaining autonomy. 

Instead, I’m thinking about how to build something that will offer returns — money, and even more importantly, meaning — years from now.

I’m thinking about what kind of snowball I want to start rolling, and how I want to spend the next head-down phase of my career.

And I’m thinking about where to invest in myself — yes, even at age 40 — and how that will compound down the road.