March 4, 2003

The Little Things Add Up
by Marcel Chartier

Its amazing how the little things add up. Take $1.00, put $1.00 away each day for a year, OK thats $365.00, invest that each year, for 15 years at 8% and what do you get? 10,703 dollars. Now how may times do we say, its just a dollar? My wonderful spouse and I used to spar a bit over the “home run” verses “bunt” school of finances. She would say, well when we get that extra money, extra cheque, then that's when I/we will invest, or pay off that debt. Guess what, it didn't happen that often. Something would always come along and take the home run away. I have learned to bunt often, just tap that ball a bit and do that often.

Where most people really see the effects of putting small amount of towards something is when folks start paying off the mortgage a little faster by putting on an extra payment or two. At first it feels like throwing a cup of water at the ocean, but after a while a significant shift happens and the ocean becomes a pond, then a pool, then a puddle. And, when it starts happening, it happens quickly. This same principle occurs when you save, invest or decide to allocate funds to a specific process or project.

I really experienced this principle in action when I quit smoking - suddenly I had cash in my pocket! It wasn't a lot of money, but where I use to have coins in my pocket I suddenly had five dollar bills. I could buy the day to day things I wanted with ease. Then I thought, hey, I could save this up, so I set aside what I normally would be spending on cigarettes. I was astonished at how much and how quickly I saved. I saved enough within a few months to buy a decent new suit. Now imagine applying this principle to almost every aspect of life, looking for the multiple small wins and not the big home run. The small repeated wins are the way to easy success, as small wins are achievable, rewarding, and build confidence, then further encourages additional small wins. Instead of nickel and diming yourself to death, nickel and dime yourself to fortune.

I read a story about a early rising judge who got a paper route. The judge figured he could use the exercise that a morning paper route demanded, the money was little, but, the judge walked, quit smoking, lost weight and earned money. Every dime was invested. The judge said that he never had to think of yearly vacation money as the paper route money after a few years covered that off easily.

I am becoming a firm believer in multiple streams of income, even if some of that income may be sporadic and minimal. The little things add up, both in earning income and in how we spend money. I guess the big wins are great but the little wins are predictable.