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1.00 vs 1.01 – Why Small Changes Matter

Very often, we struggle to see the impact that small changes make on our lives.  We believe that we have to do extraordinary things and create overnight changes in our lives. The media celebrates the story of the startup entrepreneurs or social media influencers who find success in the blink of an eye. And when […]

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Very often, we struggle to see the impact that small changes make on our lives. 

We believe that we have to do extraordinary things and create overnight changes in our lives. The media celebrates the story of the startup entrepreneurs or social media influencers who find success in the blink of an eye. And when we look at our social media feeds, we only see the best versions of people’s lives. 

However, the truth is that most stories of overnight successes don’t reflect reality. For most people, small and regular life changes are more likely to result in positive outcomes. And when we do experience success, it happens gradually and organically. Sometimes the effect is so subtle, we can feel underwhelmed when we do reach our goals. 

The best thing that any person can do is to make small and incremental improvements in life. Whether it’s to get fit, make more money, or improve relationships.

And to help you see the power of small changes, we’ll take a look at compounding and how it works to create great change. 

The effect of compounding

Why do small changes lead to great outcomes? This is because of the power of compounding.

In investment terminology, compounding refers to when interest or earnings are put back into the original investment amount to create higher earnings. 

But compounding doesn’t just happen in finances. We can see the effect of compounding in our habits too. 

Someone who’s very busy and can’t spend a lot of time every day to work on a passion project, like a stay-at-home mom, may feel discouraged when thinking about rebuilding their career or starting a business. 

But if a SAHM were to start a mom blog and post even one short blog post a week, that effort eventually adds up and builds traffic over time. Especially if the effort put in leads to high-quality content and helpful information. 

Similarly, if you’re a busy CEO and are neglecting your health, making a single change like drinking more water will help you feel better. And as you get more energized, you’ll be more inclined to work out and eat healthily. 

If all you could do was making a 1% improvement every day, then the impact at the end of the year would be disproportionately strong.

Here’s what the numbers look like:

In the first case, let’s imagine that you don’t make any improvements on a daily basis. At the end of the year, you’d still be in the same place. 

1.00 ^ 365 = 1.00 

And in the  second case, let’s assume that all you do is make a 1% change every day. This 1% change can be to wake up 10 minutes earlier, reduce the amount of coffee you drink, or to save even a dollar a day. 

Here’s what happens when an incremental change of just 1% is applied everyday. 

1.01 ^ 365 = 37.3

The difference that even 1% makes is staggering. If you’re struggling to meet your goals right now, please focus on making the tiniest change you can. Over time, you’ll be grateful that you did. 

Things to keep in mind

While the power of compounding is incredible, there are a few caveats to keep in mind. Small changes lead to massive outcomes if you do the two following things.

1. Stay consistent

When building a skill or learning a new language, the key is to work at it consistently over time. When you frequently quit and restart your goals, you won’t see the powerful results that compounding gives you. 

I was a registered nurse who became a WordPress plugin developer. At first, my cousin gave me a crash course in coding. I memorized tags and practiced what I learned. When my clients started asking for specific features, I built a product that helped them out. When they came to me with problems, I learned to fix them by doing research online. 

Likewise, if you want to grow in any way, you need to stay at making that 1% change. If you were a mom who wanted to start blogging, break down your goal into smaller steps. 

Come up with a name idea today. And then buy a domain name tomorrow. Build your home page this weekend or open a Facebook profile on another day. 

Before you know it, your efforts will see results and you will have grown exponentially

2. Be patient

For compounding to work its magic, you need to let time pass. Let’s consider the illustration where you make a 1% change every day for a year. 

If you made 1% improvements for just half the year instead, you’d see a return of just 5.15%. That is considerably lower than the 37.3% of returns you get if you keep making changes for a whole year. 

Do note, that we are stretching the 1% compounding analogy quite a bit by applying to habits, learning, and other things in life. But in the end, this illustration serves us by showing how small changes build on themselves.

Small changes are superior to making no changes in life at all. But small changes that are consistent and maintained over time have a tremendous effect on your life. 

So, make small changes and stick to them. And let the outcomes happen on their own. 

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