Hello Folks
I have come to believe that being on the extreme ends of the spectrum, where either you do nothing or you just go all out, can be disastrous to long-term results. What is sustainable is moderate, incremental changes. Habits that can be consistent for long periods. Before I tell you what kind of changes I have seen in my life, let me tell you about Tom Gayner.
“If you want the secret to great success, it’s just to make each day a little better than the day before”
Gayner Is The Master Of Compounding
Gayner is the CEO of Markel Corporation, which has been referred to as the baby Berkshire. He’s been given this title because Gayner is the master of compounding slowly but for more than 30 years. He has grown the assets of Markel from $57.3 million in 1987 to $37.4 billion in 2019.
Gayner’s weight went beyond 200 pounds at which point he determined that it should not drift anymore. He told all his friends that he would lose one pound per year for the next ten years. Sounds like a small goal right? Not for Gayner. He knows that how small advantages compound over long periods. He knew that the small goal of losing one pound a year would have an overall positive impact on his wealth. All he wanted to do was just be directionally correct, not perfect.
“I am a satsifier, not an optimiser”
He has done the same thing with his stock portfolio as well. He has compounded his wealth at an annualised return of 12.5% versus 11.4% for the S&P 500 for 29 years. Nothing extravagant but the results are phenomenal. $1 million invested in this portfolio would have compounded to a little more than $34 million. It is important here to notice that Gayner has tried to remain at the middle of the spectrum.
You must read Richer Wiser Happier to learn more about Gayner and other investing legends.
Consistency Has Done Wonders For Me
This is exactly what I have seen working in my life as well. Consistently investing some money each month, keeping my expenses low have worked very well for me over the last decade or so. It never worked for me when I tried to achieve significantly extravagant results. (I’m not a genius but I am not stupid too)
I have seen the same results with running too. Ever since I got a personal coach who has only insisted on building a strong base (read this post from Morgan Housel about building a base), my running has gotten much better and consistent. I have clocked a little more than 1,550 km in a year of training without any significant injuries. I can comfortably clock more than 20 km in a single stretch. If you want to get serious with running, you must speak to Gautam at least once :)
I want to bring this kind of seriousness to other areas too. I want a working knowledge of many things. Like Tom, I want to be a satisfier too. I want to learn the following things & I strongly believe that just by spending 20 mins a day, I can go a long way over the next year. Putting it out here to check the progress in future -
a. Learn to speak Spanish fluently
b. Learn to play at least 10 songs on the piano
c. Write one blog post each week
d. Send out the newsletter consistently
e. Publish at least one video on Youtube each week
f. 2x my average monthly income in a year
I want to be comfortable with being uncomfortable.
Some Great Books I Have Read Over The Past Few Weeks
Matt Haig’s “The Humans” - An incredible account of the life on Earth by an alien. You will love the list of advice for a human from an alien in the end.
“A Wealth Of Common Sense” - Ideas on common sense investing from Ben Carlson.
Richer, Wiser, Happier - A book that I cannot stop recommending. If there is just one book you should read about money and life, it has to be this one.
What Else Am I Doing?
I started a 100 days project on Instagram with my wife where we doing something together every day. We have been super consistent and are in the last two weeks of the project. Check out what we’ve been up to here.
I am working on a product titled “The Financial Freedom Operating System”. It is a step-by-step guide to helping achieve financial freedom. It has ideas and systems that have worked for me over the past few years. I have a pre-order discount of 50% right now. Releasing some time in September.
Stay safe. Cheers!