The Aggregation of Marginal Gains

Full Transcript:

I want you to close your eyes for a second and think about your proudest accomplishment. Now, think back of all the things you had to do leading up to that moment. What improvements did you have to make for you to be successful?

In 2010, I ran my first half marathon. The clocks said it took me just over 2 hours. But in reality, it took me many months to get there. When I started training, my first long run was three miles. The next week it was three and a quarter miles. The week after that, it was three and a half miles. I incrementally increased my mileage each week until I ultimately could run 13 miles straight. This aggregation of marginal gains allowed me to reach my goal.

James Clear talks about this in his book Atomic Habits. You can get 1% better at something by making a tiny, sometimes almost unnoticeable change. However, by doing this consistently over the course of a year, you will have made an incredible improvement. For those of you that are doing the math, a 1% improvement every day means that you will be over 37 times better at something than when you started.

Now let’s apply this concept to reaching financial independence, a goal that takes good decision-making over many years. What small improvement can you make today?

Can you increase your monthly savings by $100?

Rebalance your 401(k)?

Or make an extra payment on your car loan?

Notice that I said “good decision-making,” not perfect. On paper, the path to financial independence looks like this. In reality, it is much more variable. You will have setbacks as you go. The key is to make directionally better decisions and improve every day.

Now take action and go make your 1% improvement for the day.