Get it on Google Play
Download on the App Store

The Power of Habit Investments

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.

Let’s take a few examples:

  • Spend just a few minutes a day studying Anki flashcards, and at the end of a year, you have a ton of new phrases and sentences learned of a new language. Sure, it’s not the same as being fluent, but it’s much better than you were a year ago.
  • Spend just a few minutes a day doing pushups (even if you can’t do any at first), and by the end of a year, you’ll be much stronger. I’ve seen the same thing happen to me when it comes to lifting weights — I was very weak when I started, and though I’m not going to impress any weightlifters with what I can do now, I’ve made remarkable progress over time.
  • I started out not being able to run 10 minutes, but started with 7 minutes. Soon I could run 10, then 12, then 15. At the end of my first year of running, I ran a marathon.

Adding little amounts over time makes a huge difference. And the benefits aren’t just the small amounts added up — there’s interest accrued as well. Running a little each day not only allowed me to run better, but I got stress relief from the running, which helped me to quit smoking. I lost weight. I felt better throughout the day. I started eating healthier.

The benefits from a small amount of investment paid off in huge dividends.

Ways to Build Up Habit Investments

If you repeat something regularly, just doing a small amount each time, it adds up hugely over time. Some ways to do that:

  1. Actual money. Seriously, if you don’t have any savings yet, cut out one or two small daily expenses (Starbucks grande lattes are a good example) and instead, make regular automatic transfers each week (or every payday) to a savings account. Once you have a small emergency fund, pay off debt. Once you’ve paid off most of your debt, start investing. Your finances will improve immensely with time.
  2. Healthy eating. Eating just one small healthy thing a day, if you aren’t eating healthy now, will pay off over time. Just add one fruit instead of an unhealthy snack you might have in the afternoon. Do that for a couple weeks. Then add a veggie to lunch. Do that a few weeks. Each step of the way won’t seem hard, but you’ll eventually get used to each change. Sometimes the veggie won’t be something you love, so just eat a few bites. You’ll learn to enjoy it with time. You change, little by little.
  3. Waking early. Wake up just a few minutes earlier tomorrow (say 7:55 instead of 8:00), and stay at that level for a week, then another 5 minutes earlier for the next week, and so on. In less than 6 months, you’ll be waking up 2 hours earlier, and you won’t have ever really noticed it. It’ll never feel like you’re waking earlier. Most people, btw, try to do way more than this (say, an hour earlier at first) and then fail, and never figure out why.
  4. Writing. If you haven’t been able to create the writing habit, just write a sentence today. I’m completely serious. Then write a sentence tomorrow. Do that for a week. Next week, write two sentences. This sound ridiculously easy, so most people will ignore this advice. But if you follow it, you’ll be writing 1,000 words per day, every day, this time next year. Maybe 2,000 per day the following year.
  5. Stretching and/or yoga. I’m the world’s least flexible person (I think it’s in the Guinness Book). So now I stretch just a little each day. I bet in a a month or two, I’ll pass the guy in Luanda that’s just a little ahead of me on the flexibility list. I’ve started by just doing three yoga poses each morning.
  6. Musical instrument. My wife Eva started learning to play the guitar yesterday. Just a couple chords. If she practices those two chords each day, then another chord or two when she feels pretty confident with the first two, she’ll be playing some Bach and Granados next year.
  7. Meditation. I made a vow to meditate at least 3 minutes a day. That’s all I have to do, though sometimes I’ll do more. That makes it super easy to do it every day. What will I get if I keep doing that for years? I’m not sure, but I know I already have a judgment-free space, with no expectations, and it helps me to be more mindful and focused throughout the day.
  8. Decluttering. Just declutter a few things every day. In a few months, you’ll have a dramatically less cluttered home.
  9. Language learning. Study three cards a day with words/phrases/sentences on them. You’ll be speaking Spanish like loco in six months. (Yes, I just gave you your first Spanish investment in that last sentence.)

You get the picture.

Less-than-great Habit Investments

The habits in the last section are usually seen as good things to build up, but they’re not the only things people put into their habit banks. A few other ones that aren’t seen as good:

  1. Social media sites. Checking social media on a regular basis builds up … what? Not a desirable skill, good health, mindfulness, new knowledge except perhaps what people had for lunch or what product they’ve recently launched. Just think about what you’re building up as you check these sites. The same applies to other things you might do on the Internet on a regular basis.
  2. Junk food. When you eat lots of sweets, chips, fried foods, stuff with cheesy sauce, lots of fat … what are you building up? Not healthy habits. You’re building up disease.
  3. Watching TV. I’m not completely against television (I love Parks & Rec, Modern Family, the Office, Downton Abbey) but when you watch a lot of it, especially flipping through all the cable TV channels, you are probably not watching the best stuff (any kind of reality TV is mind junk food, in my opinion). Think about what you’re building up with this time investment.
  4. Complaining. Do you regularly complain about other people? Do you regularly dislike people, dislike your job, dislike your life? Are other people the problem? You are building up unhappiness.

These are just a few examples, but it’s worth thinking about what you’re building up over time. What we repeatedly do grows into who we are.

How to Create Habit Investments

It’s a fairly simple process that you can repeat with various types of habit investments:

  1. Pick something desirable. If you repeatedly do this activity, what will it grow into? Is that what you want?
  2. Do just a minute or two of it. You can’t build it all up in the next few days. That’s a good recipe for failure. Just do 1-2 minutes of it today. Smile as you do it.
  3. Set a daily reminder. Let’s say you want to do it every day at about 6:30 a.m. Set a reminder for that time, and make it a priority to do it each day, just for a minute or two.
  4. Watch it grow. If you just do it repeatedly, it will grow. Don’t force it. Keep the repeated activity as small as possible for as long as you can if you want it to grow (it sounds paradoxical, but it works).

A few warnings:

  • Don’t worry about doing a lot of it. As you repeat this new habit, don’t worry about growing it. That’s a good way to fail. Most people fail because they try to do too much too quickly.
  • Don’t worry about missing a day or two. This is another reason people fail — they miss a day or two, then just give up. If you miss a day or two or three, just start again. It doesn’t have to be a big deal.
  • Don’t do a bunch at a time. Do one per week at the most. One per month is even better.

What Will You Put Into Your Bank?

You’re making daily deposits, tiny investments in who you are. What do you want to invest in?

You can invest in something that will make you live a happy, healthy life with meaning … or it can be a life of distraction and bad health. It doesn’t take a Warren Buffett decide which is a better investment.

Zen Habits

Leo Babuata
Neither Averting Nor Craving in Each Moment How Taking Care of My Finances Changed My Life Tips for Traveling with Kids My Grand Travel Experiment The Parent I Aspire to Be The Best & Less-than-Best Motivations for Learning The Miracle of Suspending Mis-Belief 7 Strategies for Dealing with Toxic People Finding Motivation on Important But Non-Urgent Tasks Learning Tips for the Top 8 Learning Challenges The 30-Day Learning Challenge The Place Where You Are Feeling Determined to Change Practicing Non-Judgment Hold Your Own Feet to the Fire Don’t Waste Your Opportunity How to Beat Procrastination with Daily Training The Time When We’ll Be Present & Content A Simple, Powerful Self-Compassion Method When Others Frustrate You Your Internet Habits Create Your Reality The Case for Replacing Exercise with Play Leave Yourself Wanting More Fail Faster at Habits The Anti-Bucket List Getting Started with the Discipline Habit The Case for Caring About Your Work Questions of Priority The Futility of Always Pushing Myself to Be More Pare Down with the Declutter Habit You’re Not Doing Life Wrong Getting Lost in Just Doing An Addict’s Guide to Overcoming the Distraction Habit The Source of Contentment Savor Discipline: Merge the Interests of Your Future & Present Selves What You Can Say Instead of “I Don’t Feel Like It” The Things That Get in the Way of Doing The Girl Who Saw Through the Illusions A Gradual Approach to Healthy Eating Unconditional Acceptance of Yourself My Typical Day: How I Get People to Think I’m Productive The Contentment Habit The Delightfully Short Guide to Reading More Books In Praise of Limits The Art of Being My Dad 5 Ideas to Create an Amazing 2015 Essential Zen Habits of 2014 Karate Chop Practicing Slowness & Being Present Overwhelmed by All the Changes You Want to Make My 2014 Successes and Failures Finding the Motivation to Change Your Entire Life When You’re Lonely The Brain’s Fast Mode 5 Questions to Simplify Your Life During the Holidays The Zen Habits Holiday Gift Guide The Four Hidden Habit Skills The Power of Delay Overwhelmed & Rushed? Do a Stress Assess Writer as Coder: The Iterative Way to Write a Book Please Support the Zen Habits Book Are You a Lift or Drag Force? When Resistance Smacks You in the Face When Your Plate is Too Full The Quickstart Guide to Quitting a Bad Habit The Zen Habits Book is Almost Done A Quick Guide to Gaining Confidence When You Socialize The Empty Container The Realization A Guide to Changing Self-Destructive Behaviors Pushing Past the Terrifying Dip in Motivation It’s Not Too Late to Change Bad Habits The Smart Way to Stick to Habits My Most Effective Learning Tools What I Do When I Fail How to Put Your Writing in Public The Productive Sprint The Biggest Reasons You Haven’t Changed Your Habits Seized by the Thunderhold of Fear What to Eat for Fat Loss The Heartbreaking Cruelty of Comparing Yourself to Others A Brief Guide to Overcoming Instant Gratification How to Get Motivated After a Vacation 7 Strategies for Facing Your Internet/TV Addiction How to Breathe 7 Discipline-Mastering Practices 7 Rules That Keep My Life Simple An Education in the Majestic Sierra Nevada The Lies Your Mind Tells You to Prevent Life Changes How to Believe in Yourself Don’t Waste a Moment How to Find Your Life Purpose: An Unconventional Approach How to Be Great Making Yourself Work Inhabit the Moment How to Master the Art of Living The Delusional Fantasies We Live With Each Day Living the Simple Life How to Be Prepared for Anything Turn Toward the Problem The End of the Day Philosophy The Painful Beauty of Impermanence How to Change Other People Pursuing Happiness When It’s Already Within You The Quickstart Guide to a Decluttered Home Parental Zen: How to Keep Your Cool as a Parent Looking for Love How to Stop Your Habit Changes From Getting Derailed Why We Have Regret The Essence of Fatherhood: 6 Simple Lessons A Call for Revolt: Advertising is the Anti-Minimalism The Frustratingly Slow Pace of Making Changes My Struggles with Eating Boring Food The No Procrastination Challenge Creating a Lovely Morning A Father’s Manifesto: Raising Young Men Who Respect Women Turn Inspiration Into Action Coming Back From a Setback The Gift A Guide for Young People: What to Do With Your Life No Excuses: Minimalism with Kids How to Make a Marriage Work Love Notes Flavorless: My Month of Food Boringness The Letting Go Ebook, Free The Miracle of the Self-Compassion Habit How I Tackle a Big Writing Project The Habit Action List The Reality of This Moment Confidence in Your Business 10 Ways to Do What You Don’t Want to Do On Making It Through Tough Journeys The Hard Stuff Often Matters Most What to Think About During Exercise You’ll Be OK The Most Important Two Minutes of Your Life A Call for Compassion for the Defenseless The Cure for Your Distraction Syndrome You’re Not Worse Than Other People Being Mindful of Your Stress What if You Didn’t Have to Worry About Yourself? The Universe of a Single Task Simplifying Is Painful Becoming Emotionally Self-Reliant How I Cleaned House & Simplified My Work Life The Busy Person’s Guide to Reducing Stress My Month Without a Smartphone What I’ve Learned as a Writer What the Exercise Habit Did For Me Fear is the Root of Your Problems This Moment 36 Lessons I’ve Learned About Habits The 3 Do-What-You-Love Conundrums How I Conduct My Business Constant Task Switching The Habits of Five Amazing Founders The Incredible Importance of Sleep for Habits & Motivation What Really Motivates Us to Stick to a Project? I Tried to Quit & It’s Too Hard! Unwired: A Month With Limited Internet, & Now No Cell Phone Procrastination is a Mindfulness Problem Letting Go of Judging People Don’t Scratch the Itch Become Happy in the Face of Physical Misery How Repetition Can Kickstart a Habit Zen Productivity When You’re Feeling Self-Doubt & a Lack of Motivation The Child That Holds Us Back Stateless Mindset My Month of (Almost) No Internet 12 Changes for 2014 Essential Zen Habits of 2013 The Fear of Being Alone The Calm Approach Things Every Man Should Own Family Gatherings: The Ultimate Mindfulness Training Ground Letter to an 18-year-old on the Career Path Less Traveled A Method to Find Balance 16 Surprising Lessons from My First 50-Mile Ultramarathon The Simple Fitness Habit Holiday Challenge Struggles with My Morning Internet Fast Surrender, Mindfulness & Entrepreneurship How I Learned to Stop Procrastinating, & Love Letting Go Finding Focus When You Run Out of Ideas The Necessary Art of Subtraction Jealousy & Suffering How Creativity Works, & How to Do It Self-Discipline in 5 Sentences Make It Your Job Developing Selfless Compassion Lyrical Learning, & Why We Learn Habits Wrong A Month Without Sugar Why I Read (+ a Dozen Book Recommendations) 12 Indispensable Mindful Living Tools Burn Down the Farm My Most Minimal Travel Setup Yet The Exquisite Habits of the Founder of Blue Bottle Coffee 3 Little Tricks to Deal With People Who Offend You My Healthiest Travel Routine Yet Startup Founder Megan Casey’s Habits of Priorities My Pursuit of the Art of Living A Month Without TV or Video The Way of No Debt Letting Go: How to Live With the Loss of a Loved One The Way to Be Ramit Sethi’s Entrepreneurial Habits The Time to Shut Down The Pain & Beauty of Life Changes 8 Creativity Lessons from a Pixar Animator Zen Mountain: Leave It All Behind Overcoming the Social Costs of Being Different Finding Quiet and Mindfulness Through Food My Failed Month of ‘No Sitting’ The Thinking Habit That Changed My Life Liking Healthy Foods is a Choice Unschoolery: My New Blog on Unschooling My Advice for Starting a Business Creating Your Habit Environment Travel Lessons with My Family Easier Decision-Making: Conduct Experiments Simplify: Let Go of Your Crutches The Fear of Being Found a Fraud The Flexible Mind Declutter Your Life A Month Without Coffee The Healthful Vegan Diet Living the Quiet Life The Art of Tasting Chocolate Mindfully Why Fear of Discomfort Might Be Ruining Your Life The Habits of Happiness How to Keep Habits Going During Travel A Year of Living Without The Key Habits of Organization I Failed Vegan Guide to San Francisco The Futility of Comparing Yourself to Others A Secret to Dad Greatness Habits: A Simple Change in Mindset Changes Everything The Worry That You’re Doing the Wrong Thing Right Now 6 Steps To Being More Creative How I Finally Faced My Weight & Debt Problems Working with the Obstacles in Your Path 9 Rules for a Simpler Day The Little Book of Contentment The Obstacle is the Path 5 Lessons in Contentment from Billionaires Warren Buffett & Charlie Munger Smile in Each Moment A Guide to Practical Compassion 6 Steps To Healing Yourself The 7-Day Vegan Challenge Why You Should Write Daily Achieving Without Goals Flowing with the Stresses of Kids (or anyone else) Habit Mastery: Creating the New Normal Defeat Distraction: Refocusing with Purpose Expanding the Envelope: A Method for Beating Anger A Guide to Practical Contentment The Practice of Work Mind & Vacation Mind, Simultaneously How to Eat Real Food Without Spending Hours in the Kitchen Quitting Your Habits The 38 Best Methods of Successful Exercisers How To Make It Impossible To Fail The Not Knowing Path of Being an Entrepreneur How to Change Your Life: A User’s Guide Getting Your Family On Board with Life Changes How to Stick to a Habit When Life Falls Apart Zen Mind in the Middle of Chaos & Stress Create a Sacred Space in Your Heart Meditation: The Most Fundamental Habit Creating the Genuine Connections We Long For Tremors of Psychitude: One Little Trick to Find Purpose and Motivation Create the Habits of Being Lean, in 7 Years Walled-in: Life Without Facebook The 7 Habits of Calmness The Four Habits that Form Habits Advice to My Kids My 10 Essential Email Habits The Daily Checklist Sticking to a Habit: The Definitive Guide The Meditation Diet: How I Lost 60+ lbs. by Savoring The Power of Habit Investments Discomfort Zone: How to Master the Universe The Most Successful Techniques for Rising Early Do Less: A Short Guide How to Savor Life What We Lack in a Hyperconnected World Simplify the Internet 12 Rules to Live By The New Rules of Fitness for 2013 52 Changes for 2013 The Unprocrastination Month, and the Relaunch of the Sea Change Program Essential Zen Habits of 2012 The Other Person is Never the Problem The Do Plan, or Why We Know But Don’t Do 28 Brilliant Tips for Living Life The Clutter-free Holiday Guide The Little Trick to Make Any Moment Better Tim Ferriss vs. Leo Babauta Showdown: On Whether Goals Suck The Work You Love is Waiting For You The 7-Step Method to Find Focus for Writing The Buy-Nothing Holiday Survival Guide Challenge: Buy Nothing Until 2013 How to Learn Anything Shaken By Life’s Beauty, Shaken Untrack: Letting Go of the Stress of Measuring 15 Great Excuses Not to Form the Fitness Habit How to Make Health Insurance a Bad Bet Why the Fitness Habit is More Important Than the Plan The Willingness to Think Differently Create a Superhealth Community A Vegan Tour of NYC