02 / The Workshop
The Workshop
Chain of Thought
4 MIN · WEEK 1 OF 52
So there's this thing called chain of thought reasoning. Sounds technical, but it's really not. All it means is: if you tell the AI to think through something step by step before it answers, the output gets noticeably better. More structured, more complete, less hand-wavy.
That's it. You add "think through this step by step" to whatever you're asking, and you get a different quality of answer back. Not a little different. I ran the same prompt both ways below using "compound interest" as the topic. See for yourself.
Example 1 — Standard Prompt
The Prompt
I want to understand compound interest well enough to actually use it.
I'm at a beginner level.
Teach me the core idea, show me a real example, and tell me what most people get wrong.
I'm at a beginner level.
Teach me the core idea, show me a real example, and tell me what most people get wrong.
What the AI gave back ↓
Compound interest is when you earn interest on both your original deposit and on the interest that has already been added. For example, if you invest $1,000 at 5% annual interest, after one year you'd have $1,050, and in the second year you'd earn interest on $1,050 instead of $1,000. The most common mistake people make is not starting to invest early enough, since compound interest works best over long periods of time.
Fine. Technically correct. But flat. You'd read it, nod, and forget it by tomorrow.
Example 2 — With "Step by Step"
The Prompt
I want to understand compound interest well enough to actually use it.
I'm at a beginner level.
Think through this step by step, then teach me the core idea,
show me a real example, and tell me what most people get wrong.
I'm at a beginner level.
Think through this step by step, then teach me the core idea,
show me a real example, and tell me what most people get wrong.
What the AI gave back ↓
The core idea: Compound interest means your money earns returns on its returns. Simple interest pays you only on your original amount. Compound interest pays you on the original plus everything it's already earned. That's the entire difference, and over time, it's enormous.
Real example: You invest $1,000 at 5% annual interest, compounded yearly.
Year 1: $1,000 × 1.05 = $1,050
Year 2: $1,050 × 1.05 = $1,102.50
Year 10: $1,628.89
Year 30: $4,321.94
You put in $1,000. You got back $4,321. $3,321 of that was interest earning interest. The growth isn't linear. It's a curve that accelerates.
What most people get wrong: They focus on the rate and ignore the time. The difference between starting at 25 vs. 35 is bigger than the difference between a 5% and 8% return. They also forget that compound interest works against them on debt. Credit card balances grow the same way, just in the wrong direction.
Real example: You invest $1,000 at 5% annual interest, compounded yearly.
Year 1: $1,000 × 1.05 = $1,050
Year 2: $1,050 × 1.05 = $1,102.50
Year 10: $1,628.89
Year 30: $4,321.94
You put in $1,000. You got back $4,321. $3,321 of that was interest earning interest. The growth isn't linear. It's a curve that accelerates.
What most people get wrong: They focus on the rate and ignore the time. The difference between starting at 25 vs. 35 is bigger than the difference between a 5% and 8% return. They also forget that compound interest works against them on debt. Credit card balances grow the same way, just in the wrong direction.
The more you use these tools, the more you start to notice what makes a good output vs. a lazy one. This is one of those small things that makes a big difference.
Try it on something you're actually working through. DM me on LinkedIn what you used it on.