Incremental Changes

What do the Olympics have to do with your financial future?

More than you might think.

Take a look at that sketch above. It’s by Carl Richards, and it’s called “The Magic of Incremental Change.”

Managing your money is surprisingly similar, from a behavioral standpoint to athletic training. Both require discipline, monitoring, and, ideally, a proper coach or mentor.

Back to the recent Olympics. It’s not obvious until you say it, so we’ll say it: Those athletes didn’t just wake up one morning with the ability to compete at that elite level. To the contrary: They trained. They worked hard. They developed their skills. And little by little, they improved until they reached their Olympian goals.

Olympians aren’t born Olympians. They work at it, incrementally. Which gets us to Carl Richards’ sketch. Just as small, incremental improvements over time helped those athletes to win medals at the podium, so, too, do these incremental changes impart a powerful impact on your finances. (That’s amplified by the power of compounding, but we’ll save that for another email.)

You can approach your finances like an athlete in training. Make a small improvement—such as saving just a little bit more each month—and, before long, this becomes your “new normal.” You’ll be used to it. You’ll effectively be training—and performing—at a higher level.  Then you simply lather, rinse and repeat: make additional small changes over time. They’re barely perceptible when you make them, but in the long run, the changes can be monumental. Like an Olympic athlete, you’ll also be going for the gold!