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Macro Minute: Week of December 2, 2024

Written by Wes Johnson on . Posted in Macro Minute.

I had plans to tell a few stories of quiet savers that were disciplined investors for their whole lives. I was going to do this as a follow-up to the compounding post I made recently. When I went to go grab some stories to tell, I found that there are many examples of people who have written it much better than I could. One such example can be found at the blog of the bestselling book “The Millionaire Next Door”.

These are great stories of how consistent behaviors over time can lead to big results. The other reason that I decided not to write my own version of one of these posts is because Morgan Housel wrote about it earlier this year. I would rather point to his post and give my thoughts around it.: https://collabfund.com/blog/quiet-compounding/. In this post, Morgan does an excellent job illustrating how we have examples of consistent, disciplined effort bringing forth great results all around us. At the end, he gives four takeaways that can help us stay on track to accomplish compounding. I would like to give a few of my own encouragements. 

  • Be gracious to yourself – It is ok if you don’t have the same income or as high of a return as someone else. You must find your own way that works for you. Don’t feel like you need to have this or that done by this age, give yourself grace. The important thing is to work towards where you want to be and judge by your standard not someone else’s.  
  • Be disciplined – I know that Ramit Sathi advocates for automating your savings and investing. As you get paid, your income can be set up to automatically draft toward different accounts, or to be set aside for different purposes. This could be as simple as the 401(k) contributions you establish with your employer, or as detailed as automatically earmarking your income into each of your designated budget categories. The biggest idea, though, is to make sure you are being disciplined with your savings. 
  • Stay committed – Don’t get frustrated if you see a lack of success in the beginning. Sometimes we lose heart when we don’t see big results in a small timeframe. We must remember that we want to be building to something years and hopefully decades later. Just like the huge Sequoias in northern California start from a small seed, our wealth starts from the first dollar we decide to save. 
  • Don’t overthink it – Once you have made your mind up and decided on a plan that works for you, don’t sit around worrying about it. Live your life with the confidence of knowing that you are working to create wealth for your future needs.  

Even though it may seem that nothing much changes day to day, small incremental changes can build to produce enormous outcomes. 

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