I spent New Year's Day doing what most people do. Scrolling. Doom-reading about AI taking jobs, markets wobbling, the usual January anxiety buffet.

Then I stumbled on a 2016 transcript from Peter Kaufman. CEO of Glenair. Editor of Poor Charlie's Almanack. The guy who's been running the same company since 1977, putting him in what he calls "the top 0.001% of business leaders" by tenure alone.

His talk was about thinking. Specifically, how to think better by stealing ideas from everywhere.

And it made me realize we only told half the story in our compound interest post last week.

The Carpenter Shows Up

Kaufman's metaphor is simple.

You're a carpenter. You show up to a job site. What's in your toolbox?

If it's just a hammer, you're going to treat every problem like a nail. Can't build a house that way. You need saws, levels, drills, clamps. And not just sitting in the box. You need to know how to use them.

Your brain works the same way.

The tools aren't physical. They're mental models. Big ideas from physics, biology, psychology, economics, history. Each one gives you a different angle on a problem.

And here's the part that stuck with me: mental models compound.

13.7 Billion Years of Homework

Kaufman organizes all human knowledge into three buckets:

•13.7 billion years of the inorganic universe (physics, chemistry, geology)
•3.5 billion years of biology on Earth
•20,000 years of recorded human history

His claim: if you find a pattern that shows up across all three, you've found something real. Something you can trust.

One pattern that keeps appearing?

Newton's Third Law. For every action, there's an equal and opposite reaction.

In physics, it's force and counterforce. In biology, it's ecosystems adapting to pressure. In human behavior, it's reciprocity. Smile at someone in an elevator, Kaufman says, and you get a smile back 98% of the time. Scowl, and watch the temperature drop.

The pattern compounds your understanding. See reciprocity in physics, and you'll spot it in your marriage. Spot it there, and you'll apply it to managing people. Same insight, multiplied across domains.

That's not learning. That's compound learning.

The Formula Everyone Ignores

Einstein (allegedly) called compound interest "the most powerful force in the universe." Kaufman extends this beyond money:

Dogged incremental constant progress over a very long time frame.

Olympic medals. Fluent Spanish. A 47-year run at the same company. The formula is always the same.

The problem? We quit.

According to research from the University of Scranton, 92% of people who set New Year's resolutions fail to keep them. Most bail by mid-January. They reset their progress to zero (or negative) instead of letting the curve go exponential.

Charlie Munger put it simpler: "The first rule of compounding is to never interrupt it unnecessarily."

Sound familiar? It's the same mistake people make with their 401(k). Skip a few years in your twenties, panic at 45, try to catch up by tripling contributions. But the math doesn't care about your reasons. The snowball only works if it keeps rolling.

"And Then What?"

The Farnam Street piece on multidisciplinary learning makes a point I keep coming back to:

"A lot of people forget that there's a next phase to your thinking, and there's a second and third order effect."

Most people stop at the first answer. The brain gets an idea that sounds good and shuts down. Meeting adjourned.

Real example. A salesman walks in. Pitches software that'll cut your operating costs 15%. Charts, projections, the whole roadshow. You're sold.

But did you ask the second question? How much of those savings actually stay with you versus getting passed to customers through price competition? Third question: is that salesman knocking on your competitor's door tomorrow with the same pitch?

Garrett Hardin, the ecologist, spent decades studying these cascades. Action leads to reaction leads to unintended consequence. The world works in chains, not snapshots.

Second-order thinking is compounded thinking. Each layer of "and then what?" multiplies your grasp of what's actually happening.

Going First

Kaufman has a practical application for all this theory.

Go positive. Go first.

Despite a 98% chance that friendly behavior gets friendly behavior back, most people don't initiate. Kahneman explains why: loss aversion. The fear of the 2% (looking foolish, getting rejected) outweighs the expected value of the 98%.

So we wait. Mirror instead of lead. Protect ourselves from a risk that barely exists.

But the person who goes first starts a compounding cycle. Goodwill begets goodwill. Small deposits of positive behavior accumulate into relationships, reputation, the phone call that changes your career.

Bono apparently uses a 90-10 mental model. Assume 90% of people will respond well. Accept the 10% who won't. Keep going first anyway.

It's not naïve. It's expected value.

The Second Rule

Our compound interest post ended with Munger's line about never interrupting compounding unnecessarily.

This is the second rule: compounding isn't just for your portfolio.

Your skills compound. Learn about psychology, and suddenly you understand your coworker's weird email. Understand that, and you handle the conversation differently. Handle it well, and doors open that weren't there before.

Your relationships compound. Show up for someone once, they might remember. Show up consistently for years, and you become the person they call first when something matters.

Your mental models compound. Each new tool in the box makes every other tool more useful. The carpenter with twenty tools builds things the hammer-only guy can't even picture.

The formula is the same everywhere. Dogged incremental constant progress over a very long time frame.

The question is where else you're applying it.

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