Could it be that the primary reason why a great fortune (and success in general) eludes most people is that – as human beings – we are so averse to boredom?
You see, when you think of success, you may think of fancy cars, yachts, travel: overall, you always think about doing exciting stuff. But it doesn’t really work that way. And I’m not talking about the hard work, the hustle, and all the invisible part of success that’s often trotted out in motivational videos. If it was just about that, it would still be fine, because there’s still a dynamic and exciting component even to hustling. What we want discuss here is real boring stuff! Stuff that’s as mundane as drinking your morning cup of coffee.
Let’s explore this idea. Ever since I read the book The Slight Edge by Jeff Olson, I was fascinated by this concept: the ability to consistently take actions that are easy to do but also easy to… not do.
I wouldn’t honestly recommend that you read the entire book, because if you grasp this idea, that’s about all there is to it.
Success is not the result of a few extraordinary actions, but rather the compounding of small, seemingly insignificant daily actions which are easy to do, but precisely because of that, they’re also very easy to skip.
Compounding life choices
For example, let’s say that you commit to waking up every morning and stretching for twenty minutes. If you keep at this routine for decades, those twenty minutes have the power to change the entire trajectory of your health and spare you a whole host of problems, medical expenses and excruciating pains. But precisely because they’re only twenty minutes, it’s just as easy to snooze your alarm and roll over. How much difference can it make in the end, if I skip those twenty minutes today! It’s just twenty minutes, they’re not going to change my day or my body!
And the tragedy is: it is true that they don’t really have a great impact on the day itself. But these small choices, such as stretching or not, reading ten pages of a book or not, eventually have a big impact on your entire life because of the compounding principle, or interest on interest.
At a first glance, whether I stretch for twenty minutes or not, I’m still going to be on the other side of it and the day will develop in a similar way. But according to Olson’s idea that’s not really true, because every action is always compounding either positively or negatively. You’re never moving linearly, although this is invisible at the beginning.
How to make a million by quitting your morning coffee
To really get a good grasp of this idea, I’ve decided to apply it to personal finances, where numbers back up the principle unequivocally.
Let’s take Julia. She’s a 28-year old ordinary woman. She has 10,000$ invested on her bank account and a job that pays her a monthly salary of 1,500$. She hasn’t won the lottery and she wasn’t born from Hollywood stars. Still, she wants financial security and a certain degree of success.
But let’s assume that her career will never seriously take off and, as a consequence, her income will remain relatively flat for the rest of her life.
By this point you may be thinking two things:
1) Julia probably has a worse starting point than yours
2) There’s no chance in hell she’s ever going to be a millionaire unless she brings about some radical change
But remember: in this article, we are exploring how you can be successful in a boring way. So let’s take the boring path with Julia.
The only assets Julia has, are self-discipline and the slight edge mentality so she decides to eliminate her morning coffee routine and save 3$ dollars per day (or whatever other routine that can save her 3$). This translates into 1,095$ yearly.
She adds them to the initial 10,000$ and invests them with a very long time-horizon, which typically produces better returns. The historical return of S&P500 in the past 90 years has been a 9.8% (which includes all the bubbles and collapses). Let’s assume a standard inflation rate and – for the sake of simplicity – let’s imagine that she keeps investing only 3$ even as her salary grows. Transaction fees and all considered, let’s give her a 7% annual return with investments on a very long time-horizon, such as 20+ years.
Julia is now 73, she’s retired and in her bank account she has over half a million dollars, only because she decided to cut her coffee routine!
A simple action that was extremely easy to do, but also extremely easy to not do. After all, in a single day, how harmful can it be to make an exception and have that cuppa!
But the idea gets far more interesting than that. If Julia had decided to save twice as much, let’s say 2,000$ per year, her savings wouldn’t even double up by age 73. Same thing if she had started with twice as much initial capital. She’d end up having around 700-800k dollars.
This means that neither your starting point, nor your increments are so crucial. And it goes a bit against the grain, since we tend to think that your starting conditions in life or a big paycheck are indispensable to become wealthy. As a matter of fact, they have a relative weight and only in a short time-horizon.
All such factors are nearly wiped out if we simply change the time horizon.
The power of patience
Let’s imagine that Julia decides to leave the 500k in the coffee account to her daughter, and with the money she also gives her the slight edge mentality. Her daughter Laura decides to continue this habit and leave the coffee account to the next generation after another 45 years. How much is the coffee account now? 11 million dollars! E-L-E-V-E-N!
When we tried to double the initial capital we witnessed a 50% gain, whereas doubling the time – because of the compounding effect – produces a 2200% return!
Please notice that these 11 millions aren’t the result of a life of hustle, hard work and frugal choices. They’re simply the product of a small initial capital, combined with a regular daily saving on a cup of coffee. Imagine how far you can go, if you save 10 or 15$ per day.
Doubling the initial capital produces a 50% gain, but doubling the time produces a 2200% return!
Or let’s explore another fascinating scenario. Let’s imagine that you combine discipline with deep knowledge. And hypothetically you manage to increase your annual return, from 7% to 10% through smart investing. That means increasing your returns by 42%. Would you expect that your 11 millions would also grow by 42%?
Truth is, your 11 millions would now be… 111 millions!!
Still starting from the same cup of coffee. Simply quitting your morning coffee can result in 111 millions, given enough time.
It doesn’t matter what returns you realize on the stock market or how much you save. The point here is how powerful compounding is, how invisible it is and ultimately how boring it is! There’s no magic bullet, no radical life choice you have to take, no creativity required, no waking up to an inspired idea that changes your whole life. That’s what makes it so hard for you, for me, for everyone else. It’s just boring.
In 90 years we’ve turned the savings from one daily cup of coffee in 111 millions!
There is only waking up and realizing that: “hey all I have to do is just skip that coffee and put those three bucks into my account. Like I did yesterday. Like I’ll do tomorrow. Today it’s going to feel the same. Again”.
No genius idea, no visible stuff, nobody clapping their hands to you for making a fortune, no interviews from Forbes. Just you sticking to doing one thing only, the same thing ad nauseam, every day waking up to the same task. But you can’t stand the boredom, that’s your problem.
You want to believe in the huge opportunity, the silver bullet, the stock that will triple, your ability to time the market, to get Bitcoin at the right time, or a guru that sells you on a system. And often, because of that, you end up getting hurt. But you do it because it’s exciting. Each of these things sells you on a promise of some sort. Skipping coffee today only sells you on the promise that you’ll skip coffe again tomorrow and for the rest of your life. Even though in the end it will make you rich.
Nonetheless, all aspects of life compound and they don’t do so annually, but daily: forming habits, physical exercise, mindfulness, work, writing and reading, studying and so on. If you cultivate a habit everyday and try to improve by 1%, by the end of the year you’re 37 times better at it. This is your true ‘instant’ success recipe, the only get-rich-reasonably-fast-scheme there will ever be.
There’s no magic bullet, no radical life choice you have to take, no creativity required, no waking up to an inspired idea after which your whole life changes. That’s what makes it so hard for you, for me, for everyone else. It’s boring!
You hope that if you do this or that, if you follow that trainer, guru or coach, if you buy this product, then one year from now you’ll be teleported into a Caribbean island sipping margaritas and counting the zeros in your bank account.
You want it to be like that because it’s exciting. And instead the easy way is tremendously boring because it’s all easy stuff to do. And easy not to do.
You don’t wake up rich one day, instead you slowly get so accustomed to your wealth, that when you count that million dollars it’s not even exciting anymore. It’s just part of your boring, normal life. Just like your morning coffee right now.
Also published on Medium.
