I was chatting with a client recently and we got a little sidetracked (as I have a tendency to do) talking about hobbies and fitness. My client (we’ll call him Jim, because that’s his name) had started swimming recreationally at the beginning of the year. After a career of working too hard and raising a family he felt he’d neglected that part of his life, and wanted to get back to it. So he’s been swimming regularly every week for about 9 months.
Jim told me that last week at the pool the guard commented to him that he was getting quite a bit faster, and Jim felt that his flip turns in the water had really improved. He was moving quickly and naturally and things were clicking.
I told him that I’ve now been mountain biking regularly and intentionally for about 3 summers now, and this year was when it really felt like things started to click for me. I found “flow” on the bike, things started to come naturally to me.
What we both agreed was how quietly these changes snuck up on us. We weren’t making huge changes from one week or month to the next. We were both just regularly, consistently doing the work. Getting up in the morning and getting to the pool. Jim getting his laps in, me getting my miles in. Day in and day out. For me it’s not always glamorous. The local trails out my front door aren’t fancy or buffed but it’s a mile from the house and I can ride it when I can fit it in.
In short, we were doing the work. Making small deposits, chipping away at our progress. Most of the time it felt immeasurable, if even noticeable. But eventually, given enough time, those little deposits moved the needle.
See where I’m going with this? Of course you do. Yet another one of James’s fitness-and-money analogies. Sorry. But I can’t help but see the parallel – a bunch of little deposits, over time, made with discipline and consistency. These deposits build up over time, and they start to compound. It doesn’t seem like much at the time – that 15% coming out of your paycheck every period, what can that really add up to? But when you do it month after month, year after year, you will eventually notice real gains. When you’re young you’ll look one day and for the first time you’ll see a six figure balance in your retirement savings. It’s like checking your lap times between January and September. If you look every day, you won’t see much of a difference. But compare September’s fastest lap to January’s and all of a sudden you notice real change!
And that’s what it takes. You have do to the work. Put in the laps, the miles, consistently, week after week. Keep making those 401(k) contributions and funding that Roth IRA every year and eventually the gains start to compound. Next year you get to work off of this year’s base and that gives you a leg up on your split times and your portfolio. And instead of obsessively focusing on if a new suit or set of bike wheels will save you a few seconds, the same way we love to obsess over trying to get extra 0.5% out of the portfolio in excess returns each year, just do the work. Maybe be in the pool 5 days instead of 4 days and bump those 401(k) contributions by 2% next January and see which one makes a bigger difference.