As another new year approaches, most people have an idea of what they want to accomplish but their goals might just seem so out of reach, so out there, that it’s almost too intimidating to start.
We often assume that if we want to achieve big things, we need to take big action – but the problem with this approach is that the bigger the action you need to take, and the more drastic the difference is from your current way of doing things, the more likely it is that you will have trouble sustaining these actions in order to accomplish your goal.
But what if you focused on getting just 1% better each day and seeing how your results compound over the next year? That’s exactly what we are going to be discussing in today’s episode!
Most people overestimate what they can do in one year and underestimate what they can do in ten years Click To Tweet
If you were to break down your big goals into tiny, sustainable daily actions that you can practice consistently then you might just be surprised with what you can achieve!
In the beginning, these small decisions might seem insignificant, but over time, the small improvements (or declines) begin to compound and the difference between the two camps becomes quite noticeable.
If you get only 1% better each day for just one year, then compounded, you will end up around 37 times better by the end of the year – on the opposite side of the coin – simply being 1% worse each day, compounded over a year, means you are 97% worse off.
So imagine for a moment achieving a 3700% return on investment and in this case, that investment is YOU!
Why Small Habits Make a Big Difference
- The concept of improving only 1% a day seems negligible – but over the long run it can be very noticeable
- The societal norm of instant-gratification these days means that small changes are often seen as insignificant
- Coupled with the slow pace of seeing noticeable results leads many to let bad habits slide.
- Similar to how every chemical reaction has activation energy, we can think of every habit or behavior as having activation energy as well
- No matter what habit you are trying to build there is a certain amount of effort required to start the habit
- In chemistry, the more difficult it is for a chemical reaction to occur, the bigger the activation energy
- For habits, it’s the same story; the more difficult or complex a behavior, the higher the activation energy required to start it
- For example, sticking to the habit of doing 1 pushup per day requires very little energy to get started, meanwhile, doing 100 pushups per day is a habit with much higher activation energy. It’s going to take more motivation, energy, and grit to start complex habits day after day
- Regardless of whether you are successful or not at this moment in time, what truly matters is whether your habits are putting you on the road to success or veering you off the path
- Your current trajectory (daily habits) is more important than your current results as habits are the compound interest of self-improvement
- Your biggest breakthrough moments will occur as a result of many small actions that compounded over time will build up to make a huge change
- It is so hard to build the habits that last because we often expect progress to occur in a linear fashion and when things don’t occur as quickly as we’d like, we dismiss the habits as ineffective and throw them out the window
- This line of thinking makes it easy to pass on the good habits for the comfort of the bad habits that you are already accustomed to. If you find yourself struggling to build habits or break bad ones, just understand that progress takes time and that your efforts are not wasted
- The period between taking small consistent actions and achieving noticeable improvements is coined by James Clear as the “Plateau of Latent Potential”
- Once you break through this phase, people on the outside will see it as an “overnight success” but in reality, it’s the result of all the small actions that you took which makes today’s results possible
How to Get 1% Better Each Day as a Trader
- Small, Smart Choices + Consistency + Time = Radical Difference
- The first step is to have clarity on what your goals are and who you want to become and the lifestyle that you want to live
- Create a larger vision of what you want to achieve – you can reference our goal setting episode #7 – Goals and Actionable Outcomes for the New Year to help you set NLP-based goals
- Reverse engineer your stretch goals into actionable small steps that you can execute daily
- For example; If you want to develop your trading mindset, you can start by listening to one episode of this podcast per week and as you apply the strategies, you can increase your efforts to two episodes per week and so on and so forth and watch how much your trading mindset improves over the course of the year.
- Over time these small smart choices made consistently will provide compounded results
- Enjoying this podcast? We’d appreciate if you can drop us a rating and review on iTunes here
- Connect with our community online: Trade Pro Academy
- Catch up with our earlier episodes: Mind Over Markets Podcast
- Check out the book Atomic Habits by James Clear on Amazon