Consistency Compounds - Day 12
I’ll never forget taking a client through goal setting as she read a goal she wanted to hit in 10 years she started tearing up. I asked what was wrong and she said: “I originally set this goal 10 years ago and I haven’t made any progress.”
Wow, that hit me in the heart. 10 years ago she had this vision for her life and made now progress, and now it’s really turning into a 20 year goal. All because she never took the first step. I can relate, because the first step is the hardest. And once you take that step then it’s the second that become the hardest, and so on. Let’s talk about how to stop a 10 year goal from turning into a 20 year goal.
To be honest I didn’t really understand compounding interest until I was 30 years old. Hats off to the the American education system am I right? That’s a rabbit hole for another day, but I will say it’s amazing the things I was taught and how I was tested in high school which didn’t prepare me for the real world.
Regardless I think sometimes you gotta just get out in the real world and fall on your face to learn the lessons that need to stick. The second best alternative is to learn from a trusted guide who has been in your shoes 10 years before you. And that’s my hope, learn this lesson from me so you don’t have to the hard way.
I never understood personal finance until I started my own business. Money coming in, having to plan for taxes, paying attorneys accountants and the like. That moment when you realize what you charge a client doesn’t go directly home to you is a sobering one. What I mean by that is if I charge $100 for a coaching call, I don’t get that $100. Really I get about half of that, because part of that money has to be saved for taxes and the other piece is to pay overhead expenses to keep the business running.
This might be obvious to some, but when you are an employee you tend to just focus on your paycheck, which is your total take home money. Anyways I’m telling you all this because this progression of learning about money led me to diving deeper into investing and savings. You see early in my twenties I didn’t think I made enough money to put into a retirement account or invest. And that’s when I learned about compounding interest.
The simple explanation is if you put money in a specific account like a Roth IRA with investments, that money accrues interest each year. Let’s say for the sake of this argument you put $1,000 of your own money into that account this year, and you get 6% then at the end of the year you have $1,600. Then the next year that $1,600 compounds by another 6% giving you an extra $960 leaving you a total of $2,560 without having added money to the account.
The fun part is if you keep adding money it keeps compounding even more. So what’s the point? I should have started putting ANY amount of money in account like this in my early 20’s. I didn’t need thousands of dollars in excess income, I need $20 buck a month. Because something is always better than nothing.
Something else I’ve learned at 30 is that consistency compounds in the same way money can. The biggest mistake I see people make on a daily basis is having an all or nothing approach:
Picking a diet completely cutting out all carbs.
Starting a new workout program that is 2 hours of training 6 days a week.
Working a 10 hours on your side hustle or not working at all.
Meditating for 30 minutes or hitting snooze and skipping a morning routine.
The problem is it’s not sustainable and never lasts. On average it probably lasts one week until we fall off the wagon. This is why new year’s resolutions don’t work.
Instead of going ALL in for a day or week, try doing the smallest thing you can be consistent with for 6 months.
Drink 100 ounces of water every day.
Get your heart rate elevated for 5 minutes every day.
Set a timer and work for at least 10 minutes.
Meditate for 1 minute every morning.
The beautiful thing here is that consistency compounds which means focusing only on water will lead into other healthy nutrition habits. Meditation for 1 minute will lead to 5 or 10, which could lead into journaling, reading and so much more. If you could commit to 10 minutes a day on your side hustle you would be amazed at how far you could get in a year, and it’s likely most of the time you’d want to keep going past 10 minutes!
Think about consistency like investing in your future. It seems insignificant in the short term, but little by little, a little becomes a lot. And 10 years from now you’ll be so grateful you started!
