Last Updated on December 2, 2024
Overview – Achieving Success by a Thousand Steps
When it comes to taking action, some people like to exert large amounts of effort all at once to complete a task in one fell swoop. Some people pull all-nighters to complete a major project, while others may dedicate an entire day to completing a long road trip.
For some people, these Herculean feats of effort are a major source of pride for them, and in many cases, rightfully so.
While there’s nothing wrong with exerting yourself to accomplish a task, for some tasks choosing to go all-out in one go may not be advisable, either because it’s impossible to do so, or forcing it will end up being detrimental.
Major endeavours such as going through a collection of books, building a successful business, or mending strained relationships usually can’t be done in a single day. Even if they could, the results would most likely be disastrous.
How, then, can these major tasks be completed? An alternate approach would be to work at them little by little, day in and day out, until one day the culmination of all these small steps results in the completion of these tasks. In other words, the other, more sustainable, approach would be to consistently work on these major endeavours.
Some investors attempt to complete major endeavours in a single day, but in doing so end up burning themselves out or greatly sacrificing the quality of their work. Instead of this all-or-nothing approach, learning to successfully apply consistency in investing can make all the difference.
Understanding the Power of Consistency
If there’s one resource that people constantly seem to have in short supply, it’s time. Despite all of us receiving the same 24 hours every day, there never seems to be enough time to do everything we want to do, or worse, things that we need to do.
It’s not unheard of for people to set lofty, daily goals for themselves, but end up disappointed when, at the end of the day, it seems like they’ve barely gotten anywhere.
While many people tend to overestimate how much they can achieve in a single day, at the same time they underestimate how much can be achieved over a month, a year, or any other long-term period.
It may be impossible to get your dream body in a single day, but by allocating 30 minutes 4 days a week to working out, one year from now there will be noticeable changes in your physique.
Reading 20 pages a day may not seem like a lot, but doing that consistently every day leads to thousands of pages, or several books, that can be read over a year.
Dedicating an hour every week to talk to your friends or family sounds insignificant, but it can mean the difference between growing estranged or strengthening the bonds with those people in your life.
At first, many big tasks seem like too much to handle all at once, and because of that many people are discouraged from even starting. However, even the biggest tasks can be completed if they’re broken down into small, manageable steps. Add up these small steps over time and even the most daunting tasks can eventually be completed.
It’s no exaggeration to say that consistency can be used to tackle almost every major endeavour, as long as it’s broken down into smaller steps and there’s enough time to go through all of those steps.
Now, this isn’t to say that there are no caveats to be aware of. Consistency can be powerful, yes, but only if two other conditions are met: each action is performed to the same level of quality every time, and these actions are done routinely as much as possible.
Breaking down your goal of getting fit into distinct workouts is a great start, but if your workouts vary in quality every time you do them (i.e., some workouts are carried out intensely, while others are performed half-heartedly), and you fail to stick to your timetable of working out every other day, then the power of consistency can’t be fully utilized.
Applying Consistency in Investing to Address Major Challenges
If consistency is so powerful, then how exactly can it be of use to investors?
As we mentioned previously, the power of consistency is its ability to make the most ambitious tasks achievable by breaking them down into smaller pieces that are carried out one by one until all of them are completed.
Based on this definition, the applications of consistency in investing are theoretically unlimited. Let’s go over some examples.
Many investors understand the importance of keeping their skills and knowledge up to date as much as possible, yet a common constraint that inhibits this self-development is time.
To help make progress in this endeavour, one approach may be to dedicate a set amount of time, say, 30 minutes, every evening for investment-related development.
Assuming an investor does this 5 days a week for 48 weeks (out of 52 in the entire year), this amounts to 7,200 minutes or 120 hours of development hours. Not bad for a 30-minute daily commitment.
Annual portfolio reviews are an important, routine investment task. Not only do annual reviews give investors a comprehensive view of how their portfolio is doing, but they also help investors identify potential sources of investment risk or holdings that may not be performing as expected.
While their importance is clearly understood, there is one problem when it comes to performing annual portfolio reviews: they take time. As an investor’s portfolio continues to add more holdings or different types of investment instruments, then the time needed to review everything will increase.
How can investors perform this important task without burning themselves out in the process? Easy, by spreading the work out over a long period and by breaking this massive task down into dozens of smaller, manageable steps.
Spending several hours a day in a span of a few days is enough to burn out even the most disciplined investors. However, spending at least an hour a day over 1 month to perform this job ensures a thorough review is properly performed, without investors wanting to rip their hair off in the process.
Regardless of how many examples we go over, the power of consistency in investing remains clear. Now, this isn’t to say consistency alone is enough to solve all of the problems investors will face, but it certainly plays a major role in doing so.
Consistency in Investing Cuts Both Ways
In a previous article, we discussed the importance of forming good investment habits and how they have the power to make or break an investor’s future success. The consequences of the small tasks we automatically do will quickly add up, for better or for worse. Therefore, an investor’s habits are a double-edged sword.
Similarly, this warning also applies when it comes to what an investor does consistently.
So far, our discussion of consistency in investing has focused solely on its benefits, namely its ability to help investors advance major endeavours by chipping away at them bit by bit on a routine basis.
However, if consistency can take investors to unimaginable heights, so too can it drag them down to unimaginable lows. It all depends on what it is they do day in and day out.
Spending 30 minutes a day for investment-related development sounds great, but if an investor regularly performs this task half-heartedly, routinely fails to identify areas of improvement (or denies that improvement is needed), and always finds an excuse to cut this task short and/or push it back, then in time they’ll discover that they aren’t as sharp as they hoped they’d be.
Knowing how to effectively use consistency in investing is important, but investors need to ensure that what they’re doing little by little will amount to something beneficial, otherwise they might find themselves inadvertently hitting rock bottom.
Wrapping Up
Everyone has major endeavours they wish to accomplish, yet the scope and time commitment needed to complete them are enough to discourage most people from starting. Unfortunately, investors can also find themselves in the same dilemma.
Fortunately, even the most daunting endeavours can successfully be completed if they’re broken down into smaller chunks and are worked on routinely. Consistently chipping away at something little by little can make all the difference.
Based on this definition, the applications of consistency in investing are seemingly endless and are limited only by an investor’s imagination.
Despite the power of consistency, it can go both ways. Consistently doing something beneficial can help an investor achieve major success, but consistently doing the wrong things can lead investors down to unthinkable lows.
