How to Get Fast Results: Slowly

A few weeks ago, I noticed my apartment was running low on toilet paper. I picked up my phone, opened Amazon, and two days later, forty-eight rolls of TP arrived on the doorstep. Sure, I could have gone to the corner store like a normal person, but why waste five minutes purchasing a mundane commodity like toilet paper, when you can get borderline magical service via the Internet?

What I can do now amazes me every day. Everything from monitoring my social universe, sharing my activities in real time, tracking my health, ordering transportation, etc. has provided a level of instant gratification unlike anything the world has seen. With it, however comes one major drawback. 

There are some things, that no matter how hard you try to speed up, you just can’t. Building lasting relationships, establishing a reputation of trust, cultivating a loyal audience, growing an investment portfolio, are a few examples. The big idea being that there are certain parts of life that by definition are immune to this particular trend.

Identify The Things

The first step to make this idea work for you, rather than against you, is to identify the things in your life that can’t be instantly gratified. Can you fall in love at first sight? Maybe, but my experience suggests otherwise. Does a day at the gym give you the body of Arnold Schwarzenegger? Not exactly, but knowing this isn’t bad, it’s actually beneficial to help manage your expectations.

Shakespeare said, “There is neither bad nor good, but thinking makes it so.” If you’re expecting someone to fall in love with you after one date, you’re probably going to be disappointed, similarly, if you invest in the stock market hoping to get rich quick, you’re going to lose more money than you make. Only until you’ve diagnosed the situation as requiring consistent work, rather than a quick fix, can you begin to build your foundation.

Build Yesterday

If you want to become very wealthy, my best advice for you is to begin your business ventures yesterday. If you don’t care about money, this principle still applies to you. Whatever your craft, you need to establish a foundation as early as possible. If you’ve ever seen a skyscraper built, the project spends a whole lot of time looking like nothing. Then, suddenly the entire thing’s finished. How do they do that?

The answer is the foundation provided a frame for growth. To begin your journey, regardless of where you want to go, you have to start somewhere. As billionaire Warren Buffet’s partner, Charlie Munger says, “don’t sit there sucking your thumb". Mistakes can be fixed, but real progress can’t just be fantasized. You only benefit from hindsight by moving forward.

Summary

There are things in life you should do quickly. Buying toilet paper is one of those things, the faster the better. There are other areas however, that must accumulate slowly. Your reputation, savings, relationships, audiences, etc. all require consistent little steps. Don’t be discouraged by the apparent lack of progress, rather see it as a sign that you’re fast on the trail. In time, your solid foundation will provide you more than the necessary support to touch the skies.

The 1% Secret: A Guide To Extreme Wealth

Here's an equation: compounding returns, plus lots of time, equals a really big number. Alright, let me back up some. I don’t normally write on finance, but since I’ve been reading a ton on Warren Buffett lately, I thought I’d share a few useful nuggets.

Billionaires see the world differently. No surprise here, that’s part of what enables them to produce billions of dollars of value. But aside from trade secrets, and powerful connections, there’s an underlying principle that people like Warren Buffett use that you can apply to your life, today.

That is, the magic of compounding returns. Before you fall asleep and close this tab, let’s say for example, you don’t know how to swim. You decide that each day, you’re going to improve your swimming skills by just 1%. In the first few months, you’re not going to improve much. But, if you have the patience and foresight to stick with your daily improvement goal for a year, how much better at swimming do you think you’ll be by the end? Two times? Five times? Ten times? How about, thirty-eight times.

That’s right. If you make 1% daily improvements on any skill for a year, by the end of that year, you’ll have increased your return on your principle by approximately 3800%, or thirty-eight times the original amount. Pretty cool, huh?

Protecting Your Principle

Warren Buffett’s first two rules of investing are as follows: Rule number one, don’t lose money. Rule number two, see rule number one. When you lose money, you eat away at your compounding potential. If you start with one dollar and lose 50%, you’ll need a gain of 100% to recoup your loss. On the battle field of the markets, every percent counts, and each hit is an opportunity cost against your future earning potential.

You can apply this to anything you’d like to improve over time. If your health is important to you, as it is to me, try not to eat anything that will be detrimental to your wellbeing. If you want to grow an audience for your blog, make sure your work is being distributed in such a way that won’t harm your personal reputation. At the same time, do anything and everything you can do to add to your principle.

Shifting The Time Horizon

Most people have relatively short time horizons. Not billionaires. Buffet understands that if he can buy businesses that return 20% of his capital year over year, then in ten years, he’s going to make more than six times his original investment.

Jeff Bezos, the CEO of Amazon.com definitely understands the value of long-term thinking. His company did $89B in revenue last year, but lost money. Most people would look at that and then freak out. If you can’t turn a profit on almost $90B, when will you ever make money? But Jeff’s vision for Amazon extends beyond the average person’s radar. Every dollar that Amazon could stuff away in an offshore bank account, Jeff invests back into the growth of the company. Will it work? Maybe. But it seems to be, thus far.

Summary

If you’re patient, protect your principle, and add value daily, you’re going to do well. Warren Buffett told his sister early in his life that he’d become a millionaire if he could live long enough. For most people, that’d be a lofty statement, accompanied by lots of wishful thinking, but I have no doubt that when Buffett said it, he didn’t bat an eyelash. He just understood.

So, what’s something you can improve by 1% today?

**Special Disclaimer: I’m not a financial advisor, nor am I advising you regarding what to do with your capital. Any and all future financial decisions are the responsibility of the reader.