If you have ever thought that small changes do not make a difference, considering the power of incremental change may change your perspective. Small changes repeated over time can produce incredible results. This applies in all areas of our lives and is incredibly relevant to financial decisions.
For instance, increasing your savings rate by a small amount may not seem consequential when you are in the moment. However, incremental change is accretive, and it can produce meaningful changes to long term outcomes.
Ultimately, you are unlikely to notice an incremental change. If you simply repeat that process annually or semi-annually, the long-term savings rate will increase significantly over time. Focusing on small changes in your financial decisions orients your mindset to things that you can control, unlike market performance, and improves long-term outcomes.
Carl Richards breaks the idea of incremental change down in this article by relating to stories of road biking groups and tracking progression at work.
This is not a recommendation and is not intended to be taken as a recommendation. This material was prepared for general distribution and is not directed to a specific individual.
LPWM LLC does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisers.