It is really easy to underestimate the power of tiny gains that accumulate over time. Take your mind back to maths class in 8th grade (yeah, yeah, we know you weren’t paying attention!) But remember the concept of compound interest? The power of tiny gains is exactly that.
In a book called Atomic Habits, the author explains how just by getting 1% better every day, you can see an improvement of 37.8% in a period of just a year. To state this differently, applying 1% positively daily for 365 days results in a 199.7% difference than applying it negatively for the same duration.
Now imagine what this would mean in terms of investing!
The magic of compounding means that as an investor you can generate wealth over time with just two things, the reinvestment of earnings and time.
How small and steady can win the race
First – start off by making a commitment. You are less likely to skip going to the gym if you have a friend you work out with, right?
Deciml is that buddy for you when it comes to investing.
Set up automatic investments and sit back as your rounded up spare change does it’s work of growing.
Secondly, start off easy. We all know what happens when we try to change our habits overnight. Glow up montages may look amazing in movies, but unfortunately real life doesn’t work like that. So, begin with baby steps. Commit to saving small sums – they may not seem much right now but given enough time, they can build up some real money.
And as you gradually start getting a bit more comfortable and confident, you can always increase these amounts.
Next, do more of what already works. Consistency is highly underrated. Even small behaviours, when done with consistency can drive a lot of progress in our lives.
Avoid tiny losses. Just like saving small amounts over a long time can accumulate to a big sum, tiny losses accumulated over a long time can be expensive in the long run.
For example, every workout you miss is a tiny loss in your overall fitness goals. Every day that you aren’t investing money is a tiny loss in the eventual wealth that you could be accumulating by investing small amounts.
Lastly, make it satisfying! Appreciate your progress. Give yourself a pat in the back for making a decision to fulfil your future goals. Get a planner (Deciml will round up that expense and invest the spare change!) where you can mark an X on all the days you saved or invested some money, no matter how small the amount is.
Rounding it up
The advantages of having all this time on your hand are far too many. Think about it, aren’t you much better at riding a cycle today because you started at the age of 10 or 11? Imagine if you had just one week to learn to ride instead, wouldn’t you a be a lot more nervous?
Starting out early also gives you the time to study investing far more carefully and learn from your successes and failures.
That 1% effort sounds quite worth it now, right?