The Power of Habit Investments

By Leo Babauta

One of the things I've learned in my last 7 years of creating new habits is the power of compounded benefits with interest.

It sounds really obvious when you say it, but if you do something small repeatedly, the benefits accrue greatly over time. It's obvious, but not everyone puts it into practice.

It's like putting a little extra cash into an index investment fund ... let's say you put in just $5/day (less than you spend at Starbucks perhaps) ... at the end of 20 years, you'd have almost $70,000 if you could make just 6 percent interest, and closer to $90,000 if you could make 8 percent. Change that to just $8/day, and you're now talking about $140,000 or so. It adds up greatly over time.

The same principle applies to habits.

Let's take a few examples:

Spend just a few minutes a day studying Anki flashcards, and at the end of a year, you have a ton of new phrases and sentences learned of a new language. Sure, it's not the same as being fluent, but it's much better than you were a year ago.

Spend just a few minutes a day doing pushups (even if you can't do any at first), and by the end of a year, you'll be much stronger. I've seen the same thing happen to me when it comes to lifting weights - I was very weak when I started, and though I'm not going to impress any weightlifters with what I can do now, I've made remarkable progress over time.

I started out not being able to run 10 minutes, but started with 7 minutes. Soon I could run 10, then 12, then 15. At the end of my first year of running, I ran a marathon.

Adding little amounts over time makes a huge difference. And the benefits aren't just the small amounts added up - there's interest accrued as well.

Running a little each day not only allowed me to run better, but I got stress relief from the running, which helped me to quit smoking. I lost weight. I felt better throughout the day. I started eating healthier.

The benefits from a small amount of investment paid off in huge dividends.

If you repeat something regularly, just doing a small amount each time, it adds up hugely over time.