Local compounding

The case against digital nomading, chasing the current thing and abandoning your roots

Also published on Substack and 𝕏.

Over the past few years, two types of compounding broke into the zeitgeist.

First — compounding in finance. Inflation kills your savings and investing in the S&P 500 index over a long period of time usually produces great returns. Simple.

Second — compounding in business. Great scale and network economies help you capture the market much faster. Intuitive.

Both are now consensus and well understood among smart people.

But there is one type of compounding that most high performers still ignore, and are willing to reset at any moment.

Compounding in life.

The false allure of optionality

Whether it is Miami, Austin, Dubai, Bali or now SF, every few years, the smart consensus tells ambitious people to move to a new place.

It always sounds like a rational decision.

Those places usually provide some great unlocks for specific groups of people. It's a simple choice to move to Bali if you want to invest in your health, to Dubai if you want to save on your taxes or to San Francisco if you want to raise a series A for your AI startup.

However, when you spend time with people making those decisions, you will quickly realize they usually are not the happiest people you know.

They rarely have families.

They don't see their parents that often.

They talk to their best friends through a phone.

They are making a tradeoff between investing in their short term and long term lifestyle.

They start over on dating in every new city.

They never become a regular anywhere.

They keep having the same introductory conversations with new people instead of deepening the ones they already have.

They are choosing optionality over commitment, every single time.

And you can have all the options in the world but it doesn't matter if you never commit to one.

Magic happens when you stop moving

I am writing this mostly for myself. Between 20 and 25 I moved 7 times.

I don't regret it — at that age, coming from nothing, you have to say yes to every single opportunity that life gives you. And if it involves moving, and learning a new culture on the way, it's probably a plus.

But at some point you don't want to change your life every year anymore.

You want to go to the same barber every time.

You want to hang out with people who introduce you to their friends.

You want to build a routine that keeps you in fantastic shape.

You want to be friends with the owners of the restaurants you like.

You want to build a family and a friend group that will have your back in the worst moments.

And once you start doing those things, you will realize that the world that you built around you is orders of magnitude better than any world that you could move to.

Invisible compounding

Each of those things is easy to rebuild on its own — but none of them compound alone.

They compound through each other, but only after some time

Your family starts being involved in your friends' lives

You always have someone to call for help when you are sick or need to move big things

Your friends invite you for events that you would never know about

You start meeting girls you would never see on dating apps

All of this makes you more confident, stronger and better for everyone around you.

Each move sets you back on the serendipity that makes life worth living.

There is no y axis that measures friendships you make over time.

Don't forget about the most important chart just because you can't see it.