The Aggregation of Marginal Gains

Today I learned about -
THE AGGREGATION OF MARGINAL GAINS.
I know, at first I was like, "The what of what???" lol
But now that I understand it I realize that I've been doing this and didn't even know it. Without a goal though, I've spread it out over years...but if I had a more focused and short-term goal, this could prove incredibly valuable.

What is it? How does it work?

"The aggregation of marginal gains" in layman's terms refers to the concept of 'small wins adding up over time to make big gains' whether it's in sports performance, life-hacking and personal improvement, continuous improvement in business, or wealth accumulation toward financial independence - just to name a few examples. 

A famous example of its use was in 2010, by Dave Brailsford, the coach of the British cycling team. The team was sadly known for never having won the Tour de France. And he was given the task of changing that. He decided that they would focus on the small stuff, given that winning and losing in that sport can be a matter of minutes or even seconds. 

So he got his team to make micro-improvements, 1% changes in things like their nutrition, their exercises, their seat ergonomics...and then he kept it going with even changing their pillows to make sure they optimized their sleep. He estimated that small changes over time would get them to a win in about 5 years. He was wrong, they won it in three years. And then they won it again the year after that, and the year after that. lol. It was amazing. Or was it? 

I have seen the power of micro-improvements, and their long-term aggregation and impact in action. I've done it to prepare for my first tough mudder race, and marathon, and even in my investment strategy over time. If you've heard about the power of compound interest or dollar-cost-averaging - those are essentially just a financial versions of applying this principle. 

So, how can this help you? 
That depends on what you want to accomplish, how determined you are to accomplish it, and when. Principles like these are everywhere. We know them. They seem like common sense but unfortunately only the determined and uncommon apply them.

Are you feeling like you need to make a big change in your life?
Are you not sure where to start? 
How's about you sit down and make a list of micro-changes you can make that over time will aggregate into big changes in your life? 

For example - I often help clients reach financial goals. The way to wealth, for the common person, is often reached through small changes and goals over time. It's about reducing your expenses, increasing your income, eliminating debt, and investing the difference - no matter how small. Because compound interest over time will do the rest. :) 

So a list of micro-changes toward marginal gains that build wealth could include -

• Changing your cell phone service to a cheaper plan
• Setting up your direct deposit on your paycheck to invest an extra 1-3%, above your current amount, into a Roth or IRA
• Cutting one credit card towards the goal of never using credit for consumer spending
• Making coffee at home and cutting out the coffee-shop visit
• Making lunches the night before to reduce going out for lunch
• Cooking large quantities and freezing single meals for future dinners
• Sealing up your windows and doors to reduce heat/cooling bills
• Starting a tax deductions folder to put all your receipts in for next year
• Starting a small side business using a talent or skill you have and looking for just one client
• Buying one stock of any company you like and believe in
• Cancelling cable and buying a digital antenna instead or a cheaper service like Netflix
• Going out less and instead inviting friends over for a potluck night in
• Biking to work once in a while or busing it, or finding a slightly cheaper parking arrangement
• Shopping at the 2nd hand store first before going to large chain stores
• Investing your tax return money or annual raise/increase rather than increasing your spending, or applying it all to reduce a high-interest debt
• Doing a family gift swap for birthdays and holidays rather than having to buy everyone something....
• Increasing your investments by 1% per year

You get the idea - applying any of these would be a plus, but applying a series of them over a years time would aggregate into substantial savings, less waste, more investing, and a much brighter financial future.  Now, imagine if you made it a goal to do all of these small steps!! ;) Year over year you could be looking at financial independence and early retirement in about 7-10 years! 

Alright, given that this is a Career blog, I'll come back and add a list of career micro-changes. For now, I hope this was helpful. Leave me a comment and let me know. 

​Coach Baez