Tiny Habits

BJ Fogg has spent more than 25 years studying an apparently simple question: why do people do what they do?

Fogg founded Stanford University’s Behavior Design Lab and wrote the bestselling book ‘Tiny Habits: The Small Changes That Change Everything’. His central idea is that lasting change rarely begins with a heroic burst of motivation. It begins by making the desired behaviour so small and easy that it becomes difficult not to do.

His entertaining TEDx talk, “Forget Big Change, Start With a Tiny Habit”, explains the method through examples such as flossing one tooth or doing two push-ups to start the new habit. It sounds almost comically insignificant. That is precisely the point.

BJ Fogg’s life work has discovered that significant long-term effects in someone’s life can emerge from the cumulative effect of small habits over time.

This is extremely relevant to investing because successful investing is largely a collection of positive habits repeated for a long time.

People often approach investing through large decisions. Which fund should I buy? Is now the right time to enter the market? Will interest rates fall? Is artificial intelligence a bubble? Should I sell everything because somebody on television looks worried?

These questions matter, but they are usually less important than a handful of small habits:

● Saving something every month.
● Investing automatically rather than waiting for the perfect moment.
● Increasing contributions when income rises.
● Reinvesting income.
● Remaining invested when markets become uncomfortable.

None of these actions feels dramatic. These each are tiny habits.

Repeated over five, 10 or 20 years, these behaviours can produce dramatic results.

Consider someone investing $1,000 every month. After one year, the account will not look life-changing.

However, assuming a hypothetical annual market return of 7%, that same $1,000 monthly habit could grow to approximately $520,000 after 20 years. And only $240,000 would have been contributed directly, the remainder would come from investment growth and compounding.

Returns are never guaranteed, but the example demonstrates the power of combining time with consistency in those tiny habits BJ Fogg discovered.

The initial action was tiny. The eventual result was not.

Fogg’s framework suggests investors should rely less on willpower and use better systems to regularly save.

The amount can begin small. The objective is initially to establish the behaviour, not to achieve financial perfection.

The habit can then expand over time. A $1,000 contribution becomes $5,000. The portfolio grows, and gradually the investor begins to think of saving not as an occasional act of self-denial, but as something they simply do always.

Great long-term outcomes rarely result from one moment of genius. They come from sensible actions repeated through good markets, bad markets and markets that appear to have lost their minds.

Think small. Automate it. Keep going.

Your future self may eventually look like an investing genius.