Habits: The Compound Interest of Self-Improvement

Growing up I had a soccer coach who loved to say:

“If you’re not getting better, you’re getting worse. Nobody stays the same.”

In other words don’t get complacent. Don’t slack off now that you’ve had a few good games in a row. Keep putting in the work, or else you’ll sit on the bench and someone else will take your spot. 

Sounds a bit harsh but he had a point.

If we don’t take small actions to continuously improve our lives, things will get worse — and we won’t notice it right away until it’s made a significant impact on our overall happiness and satisfaction with life.

My coach’s words may have been about a competitive sports environment, but they can be applied to all areas of life. 

To put it another way, our habits compound over time — in both directions, negative and positive. 

The 1 Percent Rule

My soccer coach’s words give us one way to look at the effects of our habits in both directions. James Clear’s 1% Rule presents another view of it. The common thread that both ideas illustrate is that when it comes to habits, we should focus our efforts on tiny, incremental improvements.

The 1 Percent Rule states that over time the majority of the rewards in a given field will accumulate to the people, teams, and organizations that maintain a 1 percent advantage over the alternatives. You don’t need to be twice as good to get twice the results. You just need to be slightly better

From the book Atomic Habits by James Clear

When applied to self-development, you don’t need to do a complete 180 on your habits. You need to simply focus on doing 1% better than you did yesterday.

To put that in perspective, if you’re trying to shorten a 10 minute shower by 1%, that’s a mere 6 seconds you’ll need to shave off your shower each day. Not that anyone is trying to time their showers to the second, but you get the point. That’s a laughably small change — what difference does 6 seconds make? The answer is, compounded over time, a lot.

What’s fascinating to me about this idea is not simply the fact that seemingly miniscule daily efforts create unimaginable progress. It’s the fact that if instead of focusing on doing a little bit better each day, you allow yourself to slip into bad habits by a mere 1% per day, you WILL decline significantly over time. It’s pretty much guaranteed.

Combine that with my coach’s wisdom that if you’re not getting better, you’re getting worse, well…the choice becomes clear.

As James puts it, “time magnifies the margin between success and failure…good habits make time your ally, bad habits make time your enemy.”

Compounding is hard for humans to understand

When you hear the word compounding, most people will immediately think of personal finance and compound interest.

Few will think of human behavior.

And yet even when it comes to money, compounding is not intuitive, so it’s systematically overlooked and underappreciated. The math is hard for the human mind to grasp.

Physicist Albert Bartlett put it: “The greatest shortcoming of the human race is our inability to understand the exponential function.”

Similarly with human behavior, it is so easy to overlook the power of time.

Habits, like money, compound over time.

The effects of compounding habits on our ability to reach our long term goals, stay in control of our mental and physical health, and overall just get what we want out of life are huge. Even when we don’t see small actions as amounting to much.

Related: On Starting Small

What it means for self improvement

Building awareness of behaviors that are so small and so automatic that they don’t even register as “habits” and finding ways to incrementally improve upon them has a bigger impact down the line than it seems today.

1. Your direction is more important than your speed.

In a year where the world feels particularly out of our control, many of us might feel lost or stuck, seemingly struggling to make any improvements. The 1% rule is empowering. You don’t have to make drastic improvements. You simply have to keep moving forward in the right direction, no matter how small the step.

“Your direction is more important than your speed.”

— Richard L. Evans

2. Start today.

Even if you think the behavior is so small its absolutely pointless. Begin that gratitude journal. Begin writing for 5 minutes per day. Begin working out, even if once a week for 10 minutes.

Individuals who have built incredible wealth from investing typically have the power of time and compound interest on their side. That’s why everyone tells you to start investing as early as you can, no matter how small your contributions.

Same goes for habits. Time is your friend, but you have to start to reap the benefits.

Breakthrough moments are the result of many previous actions.

James Clear

3. Complacency is the enemy.

Bad habits are also prone to the powers of compounding. What appears harmless today puts you on a negative trajectory that’s hard to notice day to day, but with time can completely alter the course of your life.

“If you want to predict where you’ll end up in life, all you have to do is follow the curve of tiny gains or tiny losses, and see how your daily choices will compound ten or twenty years down the line.”

James Clear

I mention how negativity compounds not to make you fearful of every minute choice you make, but rather to make you think of the power of your routine, mundane choices.

My ultimate message is a positive one — let time work for you, and take some of the pressure off of feeling like you need to be making these perfect, grand gestures towards self improvement each day.

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