Power of 1% – How 1% Better Every Day Leads to Extraordinary Growth

A famous Chinese proverb says: “A journey of thousand miles begins with a single step”. If your journey is same as mine, which is run a full marathon, it would be 42 kilometers long. On average, there are 1265-1515 steps in a kilometer (average step length is 0.79 m for men and 0.66m for women), a marathon will take roughly 53,130 – 63,630 steps.

For a guy who had never run more than 7 kilometers nonstop, a marathon is like a moonshot of moonshots! A goal seems so out of reach that you feel crushed even before you start. Do you ever feel paralyzed by your aspirations for a better life, or overwhelmed by how far your future goals are from your current reality? It may be an inspiring exercise to dream big, but in order to turn dreams into reality we must take a closer look at how seemingly small habits factor into the bigger picture: our choices ultimately shape our future.

Every big thing, big event, big goal, big discovery is just a chain reaction of many small things, each of which is so easy to overlook because they seem so insignificant individually. But over time, when they reach the critical mass, they will grow exponentially into something gigantic, something seems impossible at the beginning.

Here enters my two favorite equations:

  1. 1.01^365 = 37.7
  2. 0.99^365 = 0.03

In layman’s terms:

The first equation means when we seek out 1% more effort every day, our abilities can grow almost 38 times or 3800% over the course of a year.

The second equation means when we slack off 1% every day, our abilities diminish 97% or 0.03 of our original ability over the course of a year.

If we look closer, equation 1 is almost 1,257 times or 125,700% bigger than equation 2. This is the difference between doing 1% more every day vs 1% less every day.

The difference in “effort” is just 1%… it’s tiny! Why are the differences so significant…?

The answer is in the number 365, which represents every single day of the whole year!

This is the power of compounding, which Albert Einstein is said to have called “the most powerful force in the universe.”

In his fabulous book Atomic Habits, James Clear introduces a key concept on building and breaking habits that he calls the 1% Rule. Much like the financial results of compound interest over time, the 1% Rule of behavior change puts a year of behavior change into perspective. Small actions may not seem to have much impact on any given day, but when small actions become ingrained habits, the results compound and will either produce powerful long-term benefits or could set you up for crippling consequences.

In the beginning, there is basically no difference between making a choice that is 1 percent better or 1 percent worse. But as time goes on, these small improvements or declines compound and you suddenly find a very big gap between people who make slightly better decisions on a daily basis and those who don’t.

The Power of Compounding

“Compound interest is the eighth wonder of the world,” Einstein reportedly said. “He who understands it, earns it. He who doesn’t, pays it.”

Time is the key that unlocks the potential of compound interest, and it pays to start earlier rather than later. Compound interest growth works like this: you make an investment that produces interest. That interest is then added to your principle investment to increase your earning potential, and additional gains will snowball over time as the principle builds and you continue to earn interest on interest.

To bring in a real-world example of the power of compounding, consider Tom who starts saving $5,000 a year for retirement at age 25. By age 65, he could have twice as much money as someone who waits until age 35 to start stashing money away ($1,300,000 vs $565,000). Basically, someone starts to invest 10 years later than Tom can never catch up with Tom even if they put in the same yearly amount for the rest of their life!

Experts say you should stick to a long-term strategy of saving and investing, partly because it allows the power of compounding to do much of the heavy lifting as you build wealth. An average investor with a longer time horizon is going to have better results than an amazing investor with a shorter time horizon.

This is how you build wealth over the long term. The quote, “Time in the market beats timing the market” is worth remembering when it comes to investing.

Just like investing, make a decision to do extra 1%…every day, every week and every year,   allow the power of compounding to do much of the heavy lifting. Your future self will thank you later.

So, how can we harness the power of 1% to make continuous improvements in our lives?

Step 1: Build a habit

Habits are algorithms operating in the background that power our lives. Good habits help us reach our goals more effectively and efficiently. Bad ones makes things harder or prevent success entirely. Habits powerfully influence our automatic behavior. Once formed, habits operate automatically. Habits take otherwise difficult tasks—like saving money or running a marathon—and make them easy in practice.

Step 2: Start small

Building a habit means start small. If you want to write more, you can start with writing 250 words a day. If you want to run a marathon, you can start with 6-8 kilometer run a day. After this becomes part of your routine, you can increase the length and intensity to gradually reach your goal. Once your small habits become ingrained, the degree of difficulty and complexity can be increased.

Step 3: Make it enjoyable

This is easy to understand. If you don’t enjoy doing something, you will never stick around long enough to master the skills and knowledge to reach your goal. At least at the beginning, make your training, study, or whatever habit your are trying to build easier and fun so that you look forward to it every day rather than avoiding it. That’s why start small is so important.

Step 4: Stick to it

Habit is all about consistence. But most people give up too soon. The initial days, weeks, months, and even years may not appear to show a significant difference. Such reality often discourages us from continuing to make those small daily investments when we’re not making much progress.

It’s like people decide this is the year they will go to the gym at least three times a week and they keep it up for about three to four months then stop because they aren’t happy with their progress. What they don’t understand is habits can compound and accelerates dramatically 3, 5, 10 years down the road. Remember time is your best friend when it comes to harness the power of compounding.

“First we make our habits, then our habits make us.” — Charles C. Nobel

Final Thoughts

It took me almost three years to finally be able to run my first marathon after overcoming countless painful muscle spasms and minor injuries along the way. I finished the race in four hours and fifteen minutes. My long road to marathon was paved with hundreds of thousands of tiny steps, my progress was measured by inches, not miles, but step by step, inch by inch, I was able to cross the finish line at the end. That’s how we can move a mountain by carrying away stone by stone every time.

When I look back and reflect on those early days of struggles, I realize I wasn’t training for marathon or any race, I wasn’t training for speed or distance, I was training for life.  People say life is like a marathon, not a sprint. After running for almost 6 years now, I couldn’t agree with it more. Every marathon or every endeavor in life, is full of ups and downs, pain and struggle along the way, what really matters is we keep doing 1% more every day, keep going one step further every time, when all these little extras add up, will make the hell of the difference between ordinary and extraordinary in our lives.

Published by Anthony Tsang

I’m a bookworm, a sports & fitness addict, an adventurer, and more than anything else, I’m a permanent work-in-progress, always learning and evolving till the day I die.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: