The Warren Buffett Approach to Wealth: Mastering Consistency

Success is a few simple disciplines, practiced every day; while failure is simply a few errors in judgment, repeated every day.
—Jim Rohn, American Entrepreneur

Have you ever wondered how change happens? 

Consider this example: In 6th grade Chemistry, we learned that the boiling point of water is 100 degrees centigrade. We start heating the water, and nothing happens even at 99.99 degrees centigrade, but as soon as the temperature touches 100, the water boils!

Just like observing the boiling journey of the water, if you study all the revolutions in history, stock market crashes, or scientific breakthroughs, you will find one thing in common: a consistent push to the outcome over a long period.

Consistency is your path to the promised land.  

We have all heard the phrase: overnight success! Well, it is utter BS. 

There is no such thing as overnight success - overnight success is the outcome of long and consistent effort. We, as humans, focus on the result and discount the process because we are attracted to shiny stuff, the diamond, and not the coal and polishing that goes into achieving the diamond. 

So, if consistency is an obvious answer to achieving our desired state, why is everyone not doing it already?

The answer is simple:

Consistency is an easy concept to grasp but difficult to practice. 

Humans are inconsistent biologically. A study done at UCL found that minute-to-minute fluctuations in brain activity influenced by dopamine levels make it challenging for humans to make consistent decisions. These fluctuations were observed during rest and significantly affected risky decision-making. This inconsistency in decision-making may be our brains evolving to adapt to a changing world by being unpredictable.

Consistency is also hard to master because people can't see immediate progress, often quitting before reaping the rewards. Nassim Nicholas Taleb emphasizes that learning and growth don't always follow a linear path. 

Here’s Peter Kaufman, long time friend and colleague of Charlie Munger, talking about this:

“Nobody wants to be constant. We’re the functional equivalent of Sisyphus pushing his boulder up the mountain. You push it up halfway, and you go, ‘Aw, I’ll come back and do this another time.’ This is the human condition. Whenever you interrupt the constant increase above a certain level of threshold you lose compounding… You have to be constant. 

How many people do you know that are constant at what they do? I know a couple. Warren Buffett and Charlie Munger. Everybody wants to be rich like Warren Buffett, Charlie Munger. I’m telling you how they got rich. They were constant. They were not intermittent.”

Now, time for a million-dollar question: How do we achieve consistency in life?

To acheive consistency in life, master the art of continuous improvement.

"The most important investment you can make is in yourself”
- Warren Buffet

Here’s a system that I learned from James Clear that has improved my personal productivity and long term focus:

Continuous improvement is all about making small, consistent changes every day, with the belief that these gradual improvements will eventually lead to significant progress. Unlike the traditional approach of setting ambitious goals and trying to achieve them quickly, which often leads to burnout and disappointment, continuous improvement focuses on making subtle adjustments to your daily habits and behaviors.

The power of continuous improvement lies in the fact that small gains may not seem significant at first, but they add up over time. Initially, a 1% improvement might not have a noticeable impact, but as days turn into months and months into years, the difference becomes substantial. For instance, if you improve by just 1% each day for a year, you'll be 37 times better by the end of it.

To embrace continuous improvement in your life, consider these steps:

Step 1: Do More of What Works
Identify the habits and actions that have already proven effective in your life and do more of them consistently. Sometimes, we overlook simple, unexciting solutions that can drive significant progress. Whether it's regular exercise, maintaining daily routines, or expressing gratitude, consistency in what already works is key.

Step 2: Avoid Tiny Losses
Improvement isn't just about doing more right things; it's also about doing fewer wrong things. Embrace the concept of "improvement by subtraction" by eliminating mistakes, reducing complexity, and getting rid of unnecessary activities that hinder your progress. In many cases, it's easier to improve by cutting losses than trying to gain more.

Step 3: Measure Backward
Rather than solely focusing on future goals, measure your progress by looking at what you've already achieved. Evaluate your past performance and identify areas where you can make small, incremental improvements. For instance, if you've been consistently eating 3,500 calories per day, aim for 3,400 calories this week. This backward-looking approach allows you to make steady, manageable progress.

By embracing continuous improvement and following these steps, you can build a system for staying consistent in your pursuit of personal growth and success. Remember, it's the small, daily improvements that lead to significant long-term change.

Let’s get consistent - one day at a time.

In conclusion, remember that success is not about overnight miracles but the result of consistent effort and continuous improvement. The path to achieving your goals may not always be glamorous, but it's the small, daily disciplines that ultimately lead to significant transformation. Embrace the concept of making gradual, consistent changes in your habits and behaviors, and don't be discouraged by the lack of immediate results. As you persist in this journey of improvement, you'll find yourself inching closer to your dreams, just like the water reaching its boiling point at 100 degrees. So, take those small steps, avoid tiny losses, and measure your progress backward – and watch how your life transforms one day at a time. Your journey to consistency and success starts now.

Good Luck.
Raheel

References:

Continuous Improvement: How It Works and How to Master It (James Clear)

The “Secret” To Success Is Consistency (Thomas Waschenfelder)