1310: [Part 1] The Incredible Power of the 1% Margin for Improvement by Paula Pant of Afford Anything on Self Growth

This is Optimal Living Daily Episode 1310, the incredible power of the 1% margin for improvement Part 1 by Paula Pant on beforeanything.com and I'm Justin Molick. Happy Saturday and welcome to one of the only podcasts in the world where blogs are narrated to you for free with permission from the authors is an award-winning podcast thanks to you. I'll keep this intro nice and short for the weekend, so let's get right to it and start optimizing your life. The incredible power of the 1% margin for improvement Part 1 by Paula Pant of beforeanything.com Another month is over, your bills have arrived, you settle down on the couch scanning through your statements.

If you wish, it happened, you spent more money than you intended, again. You made a resolution, maybe for New Year's, maybe on your birthday, maybe on any random day of the year, you promised yourself that this time, things will be different. This year would be the year that you pay off your debt, hit your savings target, buy that first rental property, open that retirement account, start a side business, boost your income. The only thing that's happened is that you're a little older, nothing else changed.

Despite all your determination, despite all your good intentions, you're in the same spot now as you were six months ago. What gives? 1% margin for improvement. The British cycling team used to feel the same way.

Every year the team tried to win the Tour de France. Every year they failed. This pattern repeated over and over and over again, spanning generations, lifetimes. The team competed for 76 years.

They lost every time. In 2012, their fate transformed. A British cyclist won the Tour de France, another British teammate placed second, and for dessert, the team took home eight gold medals at the London Olympics that same year. Alas, again, what gives?

Their path to victory started a decade earlier when Dave Brailsford took over as a team's manager and performance director. Brailsford believes in the theory of the 1% margin for improvement, also known as the aggregation of marginal gains. He applied this to every aspect of the team member's lives. He started with the obvious, seat ergonomics, wheel weight, monthly nutrition.

He placed a cyclist in a wind tunnel and found minor improvements in aerodynamic technique. He saw that dust, was affecting tires and gears, so he painted the floor white to aid the cleaning staff. He found the most restful mattresses and pillows and transported these hotels during team travels. He hired a surgeon to teach athletes about proper hand-washing techniques.

He found the most effective massage gel. He became precise about food preparation, one of his athletes carried his own espresso maker hotels so he can brew the perfect cup before competition. We searched for small improvements everywhere Brailsford told the Harvard Business Review, quote, forget about perfection, focus on progression, end quote, micro progress in your life. You might not need to focus on the ergonomics of your bicycle like Brailsford did, but you can use this approach to make micro progress towards your goals.

Want to invest in your first rental property? Take tiny steps to prepare yourself. Read one article per day, increase your savings or income by small amounts as you build a down payment fund. Spend an hour per week looking at price-to-rent values of various neighborhoods.

Likewise, get better sleep, eat clean, exercise. These affect your focus, concentration, and productivity. Brailsford isn't the only person who tested this idea. The incredible story of micro progress traces back to the 1830s.

One percent, chess. Wilhelm Steynitz was a fierce competitor. The youngest of 13 children born into a poor family in 1830s Prague. Steynitz learned chess at age 12 and began competing in his 20s after moving to Vienna.

He distinguished himself as the best chess player in Austria and then went on to become the first undisputed world champion of chess. He attributed his success to an accumulation of small advantages. I was champion for 28 years because I played on certain principles which neither my biggest rival nor anyone else of his time understood. He wrote, his chess championship streak was the most famous use of marginal gain theory in his day.

1%. Business. Massachusetts-based UX UI design company Fresh Tilled Soil harnessed marginal gain theory to improve every aspect of employee performance and satisfaction on the 30-person team. They moved into a modern office space with large windows and skylights reasoning that natural sunlight boosts productivity.

They replaced office junk food with healthier snacks. They filtered out junk leads so they could focus sales efforts on qualified leads. They optimized their website for search and referral traffic. During staff meetings, they connected the company's mission to its day-to-day actions.

The result? We doubled our revenues with a net gain of one new team member CEO Richard Banfield wrote, twice as much income, nearly the same expenses. 1%. Savings.

I invoked the idea of marginal gains last year when I issued the 1% challenge. This challenge dares you to boost your savings rate by 1% per month. To calculate this, just move the decimal point to places left. If you earn $2,000 per month, 1% is $20.

If you earn $4,000 a month, 1% is $40. If you earn $8,000 per month, 1% is $80. I say save as a shorthand for anything that improves your net worth, including tackling debt, beyond the minimum, real estate down payments, and retirement contributions. The idea?

If you boost your savings 1% every month, by next year, you'll save 12% of your income more than you do today. You can customize this in whatever way fits you best. Some people take huge leaps, saving 5% or 10% in one gigantic move. Others take smaller steps, saving an additional 1% every 2-3 months, which adds up to an extra 4-6% of your income per year.

Apply the idea behind the 1% challenge to earning more. One challenger increased her rates and her side business, and now earns 4 times more. I initially thought this would be a 1-year challenge, but it's thriving as a rolling, evergreen concept. Anyone can join any time and stay for as long as the challenge serves them.

The typical challenger saves more than 20% of his or her income, which is awesome. 1% across life. Hear that in tomorrow's episode. You just listened to part 1 of the post titled, The Incredible Power of the 1% Margin for Improvement by Paula Panz of AffordAnything.com.

So thank you for being here and listening every day, including the weekends, and I'll be back tomorrow to finish up the post. We're your optimal life. Oh, wait. Hey, this is Dan from the Optimal Finance Daily Podcast, which is a lot like this show, except more focused on personal finance.

Justin handpicks the best posts he can find from blogs and authors like Remeek Safety, Mr. Money Moustache, and more, and I read them to you five days a week. So if you enjoyed this podcast, come on over and subscribe to Optimal Finance Daily, too. And together, we'll optimize your financial life.

Thanks for joining us, and remember, your optimal life awaits.