Modern compound bows shoot faster and straighter than ever. Bowhunters need the power to take down big game. Investing is no different, compounding investments make your returns grow bigger than you could otherwise save. Here’s how compounding works and what it can do for you.
Ever use a pulley system to store your fishing kayak or car top carrier in the garage? Or do you enjoy working on restoring old cars, and use a pulley to lift heavy equipment such as the motor?
In all likelihood, you were using a block and tackle system. [Sorry, not talkin’ football here.] A block and tackle gives you extra power,
because it multiplies what you can lift by spreading the weight out over multiple pulleys. You just have to pull a little more rope than a regular single wheel pulley, because it trades off distance for force.
A compound bow does the same thing, it multiplies your strength (input energy to the bow) over the cable distance which is wound around pulleys. This is how you can store enough energy in the arms of the bow, to shoot up to 370 feet per second (fps) and bag a large buck or moose
Arrows shot by compound bows travel up to twice as fast as traditional recurve bows, which allows for a flatter trajectory and greater accuracy. That’s why you can take down your game at longer effective ranges, even over 50-60 yards for expert shooters, which is very hard to do with a recurve bow.
In fact, compound bows take it a step farther, by using two different sized pulley wheels. This works just like differential sized gears do on your mountain bike. When you draw the string back, it rotates the wheels. Drawing on the larger wheel where the draw string is connected first, then
wrapped around to the smaller wheel, further multiplies the force applied to the arms of the bow. This is because the smaller wheels have to rotate more to cover the same length of draw string coming from the larger wheels. Check it out next time you draw your bow, or go for a mountain bike ride (the larger gear in front multiplies torque on the rear gears).
To bring it all together, check out this cool chart from PB Works. They’ve mapped how much power you can create with a compound bow vs. recurve bows, as you draw the bow back. Not surprisingly, you get a lot more force a lot more quickly from a compound bow. Nothing like getting your compounding definition in a picture.
See how the curve comes back down for compound bows? That’s a cool trick that comes from the irregular shaped cam, that brings the holding force down while you aim. That makes it easier to steady your aim until you can get the shot off. For some bows you’re only holding 25% of the force at full draw. As long as you hold your aim, the full power is still stored in the bows until you release your shot and take down your game.
2. How Compounding Investments Work
Compounding works the same way with your investment – it multiplies the return you can get for saving a certain amount of money. Just like the power of a compound bow, you’ll want the power of compound interest investments to bag a bigger return so you can have more money in the long run.
Saving is great, and is the place to start. But saving without investing it in something that earns you a strong compound return is like shooting a traditional recurve bow. You’ll get something out of it, but not nearly the distance or speed or power. And not nearly the money you could earn.
Here’s a comparison to illustrate, with 3 ways you could save and invest a hard earned $1,000 as a beginners guide to investing:
Stash the cash – say you hide a little cash in your gun safe. It’s safe so to speak, but doesn’t earn you anything. Or,
Save it for a rainy day – you could put it in a savings account which typically is pretty low interest, even the best ones these days yield only a little bit over 2%. That’ll earn you slow and low growth. Or,
Invest for the future – put it in the stock market, in some of the best compound interest investments such as mutual fund or index fund, and earn an average 7% over time. (We’ll cover types of investments in another article).
To see how these different investment approaches work, check out the chart below. Stash the cash at 0% will hide away your money, but doesn’t earn a thing. A compound interest savings account at 2% gets you a bit, but takes a lot more effort and time to earn big bucks (like a recurve bow). At least you can see that even low yield compound interest accounts get you substantially more than just cash.
However, an average compound interest rate of 7% (about the long term average compound stock earnings growth), as long as you keep it invested, gets you a lot more a lot faster. That’s the equivalent of taking down a large elk or moose compared to small game. Which would you rather take home and put in the freezer?
Just in case you want to see the numbers behind the chart, here you go. This table is a great way to see how compounding works – each year’s return multiplied on top of last year’s return results, accelerating the speed and power of your investment. It should be clear by now, that a compound interest investment will do a lot more for you than a compound interest savings account, and both are way better than cash – you want your money to work for you.
3. How To Put Game In The Freezer
You know better than anyone, there are lots of things that you need to do right to bring home the bacon:
Lots of repeat practice so your kill shots are accurate
Patience and stealth, take your time stalking and waiting
Alert to the conditions around you – tracks and trail activity, scat and other signs, wind, weather, other animals
Keep at it even after setbacks – missed shots, deflected arrows, scared off game, getting skunked – keep investing your time and effort and you’ll bring home the bacon.
Yes you called it first – the same is true for investing – here’s how to get compound interest:
Lots of repeat investments over time adds up faster
Patience, keep your money invested and resist the temptation to pull it out and use it for something else
Quality investments (see our articles on this)
Alert to the conditions around you, keeping your expenses in check relative to your income so you can keep on investing, how the economy is doing, etc
Keep at it even after setbacks – some years will have lower or even negative returns, but don’t let that deter you, the stock market has a history of roaring back, you just need to keep on investing and keep it invested!
That’s the best way we can think of how to bring you the definition of compounding. Stay tuned for our upcoming introduction to investing and investments articles!