The compound interest of family life

In a post on the social media platform X, data scientist and author Nick Maggiulli wrote: “If you’re in your 20s, you should prioritize your wealth then your health then your relationships. While all of them are important, if you get the money one right, the other two will come much easier.”

In response to this post, financial analyst Ben Hunt wrote : “Sorry, but this is *horrible* advice. Nick wants to make a point about the compounding effect of time on wealth, but in fact relationships and health are even *more* reliant on the compounding effect of time. At every age, prioritize health and relationships over wealth!”

This exchange helped answer a long-standing question I’ve had regarding the following scripture: “Lay not up for yourselves treasures upon earth. … But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal” (Matthew 6:19-20).

I’ve often wondered: if one were to make an investment in heaven, what would that look like? Certainly we can’t place any kind of financial bid on land in the celestial realms, nor trade stock options or futures contracts of eternal value. But the Christian injunction is just that: We are to lay up treasures in heaven. But what does that mean, exactly?

One such treasure — and perhaps the only real and lasting treasure of this life — is our relationships, and most importantly our family relationships. And just like any financial investment, our familial relationships benefit significantly from the compounding effect of time. Here’s what I mean by that.

The law of compounding states that small increases over time result in growth and gains the longer the compounding takes place. As an example, in his book “ The Psychology of Money ,” Morgan Housel writes that if world-famous investor Warren Buffett, who started investing around age 10, had stopped investing at age 60, his net worth today would have been something around $11.9 million. Not bad at all.

But Buffett, now age 93, didn’t stop investing, and now has a net worth of around $132 billion , meaning , according to Housel, that “99% of Buffett’s net worth was accumulated after he was 65 years old.” This is the long-term effect of compounding interest.

James Clear, author of the bestselling book “ Atomic Habits ,” explains the effects of the law of compounding on our daily habits. In the book, he writes that “if you can get just 1% better each day, you’ll end up with results that are nearly 37 times better after one year.”

This type of increase and transformation is hard to believe, but it’s demonstrably true. It is consistency, combined with small and simple daily improvement and effort that yields incredible change in the long run. And the same applies to family life and happiness.

Many financial and investment gurus preach incessantly about the compounding effects of money and will try, like Maggiulli, to convince us to spend our days seeking more wealth. But the only compounding that truly matters in this life is that which comes through 60, 70 or 80 years of love and a rich family life that sustains us in both in our early and later years. This is the true compounding that lasts beyond death, where moth and rust doth not corrupt.

Unfortunately, some young Americans will accept what Maggiulli said: that if they find the money, then they’ll find the good life. But acting on this advice will cause many of them to miss out on the fruitful, rewarding and, yes, necessarily taxing process of family building early in their adult life.

Many are getting married at much older ages because of this sentiment. On average , men and women are getting married six to seven years later than in generations past, with the average marriage age now being 30.5 years for men and 28.6 years for women. As a consequence, they’re not investing early enough and may lose the initial compounding gains of familial love, sacrifice and growth.

There are also those who opt in, but sell too early. Divorce is the equivalent of Buffet stopping his investments early, or even throwing a portion of them away; we can start to invest in another relationship, but we’ve lost everything we invested to that point. There are, of course, times when divorce may be necessary, but for many, weathering difficult periods would result in greater returns down the line.

In finance and investing there are many ups and downs (bull markets and bear markets), with lots of fear and greed and uncertainty; but those who hold strong amid the chaos of markets, like Buffet, are the ones who reap what they’ve sown. This is true and even more applicable in family life.

Why are we willing to have diamond hands during financial market troubles, but quickly liquidate the entire farm, our complete and total civilizational inheritance in our families, at the first signs of choppy waters? We have the equation backwards.

In reality, the entirety of life — all its purpose, beauty, majesty, tragedies, failures, weepings, stories, sciences, arts, music, loving, growth, religions, philosophies, cultures, living — has little to do with money, and everything to do with family. So where will we put our “money” then?

Hunt was right. It’s good to start early with investing and saving money, but the law of compounding is most fruitful when used to build a family. And when all is said and done, who will be with us when we pass on? Your financial advisor, or your children and grandchildren?

Start early and hold strong; and if you’ve already started, hold stronger still. Invest your heart into the heart of another (one who will reciprocate your investment), and when you end this life, you will know the compounding of true riches and growth, even treasures in heaven beyond anything you could now comprehend.

Scott Raines is a writer in Kansas.