The Power of Habit Investments – By Leo Babauta

I’ve come to believe that two major forces can greatly improve processes for doing all kinds of things: HABITS and CHECKLISTS. The article linked to below discusses a little about the habit side of things, and there are two good books that can give you a more thorough rundown of habits and checklists, if you haven’t yet read them: The Power of Habit and The Checklist Manifesto. I've been tinkering with my learning process over the last few months to develop some sustainable habits, and I think I've finally got something down that I really like. But that is a topic for another post, on another day.

One of the things I’ve learned in my last 7 years of creating new habits is the power of compound habit 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.