Forget about instant gratification.Compound small changes instead | Private Equity Weekly

We live in an instant society and no one seems to like waiting for anything. A few years ago, when I worked as a retail clerk at a well-known national supermarket, there was no deli section and “convenience meals” were either Maruchan ramen or “TV dinners” in the frozen food aisle.

Fast forward to today, and the fastest-growing segments of grocery stores are the deli and ready-to-eat portions. Clearly, we are becoming a society that frowns upon waiting for food or even taking the time to prepare it.

This “immediate” mentality is so pervasive that it permeates every aspect of our lives. Why wait week after week when we can pay to subscribe to a media provider and binge-watch our favorite shows on the weekends without any ads?

Why save money or pay in installments when we can get instant gratification with a credit card? Why leave home to go shopping when you can order something online and increasingly have it delivered later in the day?

Paul Roberts in his book impulsive society, a bracing, sweeping social critique of our current tendency to pursue an instant lifestyle. He studies economics, psychology, political philosophy and business management to show how we can achieve a “virtual fusion of the market and the self.”

Exciting stuff. But when you look around, that’s all there is to it.

The problem with the instant lifestyle is that you live in a reactionary pattern without any purposeful direction. The decisions you make are not rational decisions based on logic and long-term goals, but are driven by emotional impulses and the need for immediate gratification.

Compound interest is more than just money

Most of us are familiar with the concept of compound interest. Put a small amount of money in a bank and keep it there for a long time, and once you start earning interest, the results can be amazing over time.

Investing as little as $100 per month in stocks like the S&P 500 can grow to over $500,000 over a lifetime. However, on the other hand, using credit to buy something and then only paying the minimum means compound interest works against you as your interest charges work against you and can lead to financial ruin if not controlled.

At the very least, it may mean that you may end up relying on Social Security and its corresponding small lifestyle, rather than having enough money to retire and live a comfortable, meaningful life.

Put another way, Benkini“The interest earned is a reward for making smart decisions through patience and discipline, while the interest paid is a penalty for impatience and overspending,” explains the PLACE co-founder. Those who are willing to be proactive and invest patiently will get long-term dividends, while those who need immediate gratification end up with long-term debt.

The habit of compounding can also provide long-term investment returns

While we all know how this works in finance, what is less familiar is Compound Habits and the long-term effects of good habits versus the negative consequences of negative behaviors. In short, one small action repeated day after day will have a measurable impact on your future. Whether this effect is good or bad depends on the action.

As an example of acquired behavioral interest, many of us choose to lose a certain amount of weight during our lifetime. Too often we set ourselves up to fail in the first place. We either have an unrealistic deadline so the extreme effort required to lose the desired weight is unsustainable over time, or we reach the goal but are unable to maintain the weight loss because we’re back to Original habit.

In fact, losing weight can be relatively simple: take in fewer calories from your mouth than you did before, over a long period of time. It doesn’t have to be extreme food reduction. Over time, your efforts will increase and the weight will begin to disappear.

The problem, however, is that many people are unwilling to change their eating habits in the foreseeable future and will become discouraged because the resulting losses occur very slowly. However, weight lost this way tends to be permanent because your eating habits also make long-term lifestyle changes.

Want to lose more weight faster? Then, in addition to eating slightly less each day than before, slowly, over time, remove foods from your diet that you know will hinder weight loss, such as sugar (any type of glucose, fructose, etc.) , high-sugar and high-calorie snacks, large amounts of carbohydrates, high-fat red meat, etc. Ironically, not only will you lose weight in the long run, but you’ll likely live longer.

Incremental changes are better than drastic measures

Translating this into business, the principles remain the same. Many people are dissatisfied with the current results, react with impatience, and try to take some drastic measures to get things moving quickly. They may promise radical behavioral changes, sign up for expensive lead generation programs, hire employees without an effective evaluation process, and more.

Although there may be immediate results, they usually disappear once it is discovered that the desired behavior change requires more effort or money than people are willing to spend in the long term. As a result, many people return to their previous standards within a relatively short period of time. In some cases, the end result can actually be worse than the beginning—especially if you hired a bad employee.

Instead, it’s better to make incremental changes that you can realistically sustain. For example, what happens if you choose to make 20 additional phone calls per day? In a normal working year, you would make 4,800 more calls than you do now.

Unless you’re completely incompetent on the phone, even if you only take on two clients all year, you’ll be way ahead of everyone else. 49% of agents nationwide Who did or did not make a trade in 2023.

And, once you have clients and stay in touch with them after the deal closes, those additional clients turn into additional referrals and referrals that you wouldn’t have had otherwise.

You can also choose to add three new people to your database each week. It doesn’t seem like much, but by the end of the year, you’ll have 152 additional contacts. Considering that all it takes is a database of just 200 people working aggressively and consistently to generate a decent income in most markets across the country, you’ll be miles ahead again thanks to relatively easy behavioral changes.

Continue this behavior year after year and your library will become a force to be reckoned with. If they continue to work, the compounding effect of these connections will bring huge long-term benefits. Just a few minutes of active activity each day can make a huge difference in your life.

Unfortunately, many people choose not to change their behavior because it involves doing something they don’t enjoy or that is boring. Who likes to eat less? Who likes to talk on the phone? Where are the rewards of consistency if there’s no immediate gratification?

What are some small, compounding changes you can make every day?

In fact, by adding small, compounding actions, you can have endless positive impacts on your future business. These could also include choosing to read 10 pages a day from a recommended business book, write a few cards a day, knock on 10 more doors – the options are endless, but the time spent is minimal.

On the other side is behavioral “interest payment”: the result of long-term bad habits. Think about persistent overeating, smoking, being in a sedentary environment for long periods of time, etc. Over time, the negative effects can intensify, leading to serious physical problems.

Apply this to your business, if you develop bad habits, such as failing to log past customers into your database and actively stay in touch with them, your business will struggle over time and be unable to Provide the income needed to survive. This is one of the main reasons why real estate agent turnover is so high.

Simply put, compound growth—whether in your personal or business life—comes from small, incremental, positive actions that compound with each other over the years. Success is the sum of small, boring efforts repeated day after day.

The power of compound interest is its ability to transform small, sustained efforts into extraordinary results over time. Like a snowball rolling down a hill, it starts small but if the hill is long enough, it will gather size and momentum until it is unstoppable.

On the other hand, a lack of discipline combined with impatience can lead to serious problems that can also intensify in a negative way over time. A large number of relationships, including marriages and business partnerships, end not because of a large, single event, but because of an accumulation of small things that, over time, build up to resentments that are difficult to overcome.

The same is true for any particular business that fails. It’s usually not a catastrophic event that leads to its demise, but rather a combination of small, poor decisions over time.

Small incremental improvements in habits, skills, and knowledge lead to significant growth and progress. This can bring benefits to many areas of your life, including better health, self-improvement, career development, business growth, and overall well-being.

Whether it’s learning a better way to eat, a new language, an instrument, or a professional skill, the compounding effect of sustained effort over time leads to mastery. To quote Ben Kinney again: “Small decisions equal big lives over time.”