Remember your college or high school days. Have you ever thought about why did you feel like a knowledge guru during your senior year? Younger students came to you for advice, to listen to your words and recommendations. You became a social success. That is, of course, until you graduated and moved on to the next ladder. Step by step, starting by trying to find the “seniors” of this newfound ladder: managers, senior partners, successful entrepreneurs, multi-million dollar investors, post-doctorate academics, renown public servants. This is the effect of applied knowledge: been there, done that. But this knowledge does not come instantly, it is a compound reward of your continuous investment of time and effective hours of effort into ingesting and curating knowledge, just like investing.
Knowledge can be compared to financial investments
The great power of investing (particularly long-term investments) relies on compound interest. For example, suppose that you invest $1,000 from your savings account onto a handful of stocks and some bonds. Say that in one year, these stocks/bonds increase in value an average of 5%. That means that after one year, you will have earned $50 of interest, and your balance would be standing at $1,050. Now, if we assume that these will on average keep increasing 5% every year*, by year 2, you would earn 5% of your $1,050 balance: $52.5
This is the core of compound interest: not only your initial capital investment of $1,000 earns interest, but additionally, your earned interest during the first year will also earn 5%, hence compounding itself. This is a minimal gain on your original investment by year 2, but if the same investment with capital and interest keeps gaining interest earnings, the balance of your investment will increase exponentially.
Knowledge is exactly the same, although there is a natural limit to this exponential growth. Everyone has different capabilities to retain information and use it freely throughout their lives, but none of us are invulnerable against faulty memory, errors in our logic (fallacies), and biases. Regardless of these natural variables, knowledge is partially as important as managing its infrastructure.
Knowledge can be stored and arranged like data
I see knowledge as a Data Scientist might see a data warehouse. In a data warehouse, there might be tens of thousands of data tables, each containing a unique set of information points stored somewhere in this warehouse. Somehow (by people several times more intelligent than me) these tables get connected through a series of relationships; that is, one table has a set of values that appears in another table, but that contains a different counterpart of information. Imagine one data table with the days of the year in one column and the birthdays of your family and friends in another column; now picture a second table with the same days of the year in one column, but with holidays on another column. Both data tables contain days of the year in one column, but the counterpart of this set of days is in one case birthdays, and in the other holidays. The relationship between these two different data table lies in the days of the year: that is the common factor between these two separate sets of information.
Well, our brain does the exact same thing with knowledge. Think about everything you have ever learned. Your brain is storing it in specific categories and sub-categories until the information gets to its most basic level. Like learning what an apple is. First, you relate a visual image to letters that arranged in a specific order, describe this image as text in your brain. Then you realize this object is sweet to the taste and firm to your grip; covering one by one the human senses. Afterward you begin to learn about the apple in a more abstract way: an apple is a fruit, and fruits are one of the several groups of food, where food is composed of a set of items that are consumed for nourishment, and that this specific group called fruit contains vitamins and minerals, and that vitamins and minerals are required by your organism to maintain optimal health. After establishing all these hierarchies you can continue building the relationships with other hierarchies, such as the social saying “an apple a day, keeps the doctor away” and how this is comical because we say what we inherently already know, without saying it. Hierarchies upon hierarchies deeply interconnected build our internal warehouse of knowledge. Roots of relationships between one specific thing and another, along with the quality with which we are able to use them are crucial. This is how minds are built, some with more efficiency than others. I believe, for example, that the top minds of the world excel in two things: quantity of knowledge (more data tables in each mental category) and quality of relationships (how well can they connect the information they know).
Quantity of knowledge, as a matter of fact, does not only depend on the raw quantity of information that gets into our brain: by how many books someone reads, or how many documentaries one can manage to slip in every night; it also relies heavily on an effective management of new information and housekeeping of long-known information.
How do I normally think of knowledge structure?
Say that today I read the news and I see that Trump is having a strong political discourse about renegotiating international trade agreements. I may just look at him and think “boy what an asshole. Hey, look at this guy, he is a lunatic!”, but besides being on point, the deep underlying facts of this event are not being understood by my consciousness. On the other hand, if consciously I were to study the exact information provided by Trump, the extensive opinion of the media, the academic research or the political parties’ responses to the US and foreign countries, then this curiosity will surely yield vaster amounts of information into my brain about the main topic of Trump discoursing about trade agreements. But what happens unconsciously? As my information sources widen and my general knowledge becomes deeper onto this one subject, unconsciously my brain will categorize these information packets and relate them to this one subject of Trump, President, News, February 2017, USA, Politics, Foreign Policy, Trade Agreements… so on and so forth. Our brain is an amazing information management system; it is our own personal Google. But there is no use of a Google that has all the information in the world if someone types in their inquiry in the search box and receive unrelated, unstructured results thereafter.
Knowledge relationship quality
That brings into account our second aspect of knowledge management, the quality of our relationships. Try searching in your mind for “water”. Try and come up with all the different groups in which you can categorize “water” in your head. Then go deeper. How do these categories relate to other categories from other subjects of your inner knowledge just by having that one pivotal factor: water? Do you think about your biology category? Chemistry? Physics, economy, society, environment? What do you really see in your internal data warehouse when you look for water?
I strongly believe that we can train the relationships we build in our head of every topic. By adhering to conscious learning, focusing when ingesting new information, exercising how topics can be interconnected and eventually be expressed as an opinion or argument, one can develop a better understanding of how to increase our knowledge, maintain it and express it in a logically comprehensible way. We can improve our mechanisms to effectively categorize new information into pre-existing categories (quantity) and perform house-keeping on the knowledge we already have (quality). And it gets easier. I remember trying to learn English as my second language, it was hard for me. Pronunciation, grammar, literature were tough to learn because my brain was just starting to gather information about the world of the languages and how they are similar to each other, or about how to learn faster, best practices in learning techniques to reduce the time required to learn new languages. Then a few years later, when I partook on learning French, I could use this previous knowledge to take advantage of the dreaded “learning curve”. There is a reason this is a curve. It gets easier to manage knowledge – therefore the compound characteristic of it. As years go by, if we effectively invest in knowledge management, it behaves as a compound interest problem and as a cloud of interconnected data tables.
*The US stock market has shown an average annual return of 7% during 1950s-2012 (S&P 500 index)
Everything written here is a personal reflection and is by no means educational, financial or professional advice in any way.
Please feel free to cite and refer reliable sources in the comment section down below.