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.

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