The lifetime compounding of small decisions

·3 min read

They seem like such small things.

For better or for worse, small habits reap big consequences over time. Especially a lifetime.

Walter and Barbara had it all…a house on the lake, a busy and successful professional career, social status, friends and accolade after accolade rolling in. They were the picture of success in their day.

As a young man Walter developed two habits that would have long term consequences. Like many young men of his era, he took up smoking. And he especially like to smoke while enjoying his second habit, gambling.

The smoking cut his life short, and the gambling acted like a cancer on their financial health. He left Barbara a widow barely past retirement age, and she would outlive him by 30 years.

By the time of her death, she was penniless. Her two children had to apply for Medicaid just to pay her nursing home bills.

Walter and Barbara’s daughter Leigh would marry a man who had also experienced poverty…and was determined to never go back. Initially, Walter looked down on Fred, his daughter’s suitor, asking impolitely and out loud if he would ever amount to anything.

It took a while, but he did. Fred had worked his way through school and kept his eyes open for opportunities. Everything he touched didn’t exactly turn to gold. Everything in his life was not a “home run.”

But he kept doing the little things, working hard, working smart, building relationships, saving money and spending within his budget.

They seemed like such small things, each one of Fred’s decisions. But in retrospect, they were the seeds of his success. Over time, his small decisions compounded into big results.

I’ve known many men (and even more women) that fit that description. They just seem to have a habit of having good habits. And good stuff follows.

People like this make the most of their lives and are content with the results.

Financially speaking, they know how much is coming in the front door and that if the same (or more!) is going out the back door, there’s going to be a problem. Knowing this, they’re usually pretty good savers. I’m not surprised to see them save 15% to 20% of their income.

Of course, in order to do this, they live in modest homes, eat most meals at home, drive the same car for many years and probably wouldn’t be selected to be in the best dressed section of a style magazine.

As a result of such habits, these folks weather storms better and take advantage of opportunities that come their way. In fact, to the onlooker, these people can tend to look “lucky.” I say that’s the wrong word. They aren’t lucky, they’re thrifty. And thrift tends to attract opportunities.

Decisions (good or bad) tend to compound over our lifetimes; choices that we make become larger and more significant than we’d ever imagined. Time tends to expand the results of the choices we make, so that the oak trees of our consequences are unrecognizable as the seeds of our initial choices.

This can work out for your benefit. Or it can haunt you.

Fred and Leigh had a good run – 75 years of marriage. Fred died last year. Like Abraham, he “died in a good old age, an old man and full of years.” Leigh needs help from caregivers now but paying for all that is not something she has to worry about. Fred saw to it she would have plenty of income to pay for any needs she had.

One couple started out on top, indulged in bad financial and lifestyle habits and ended up penniless. The other started out penniless, engaged in good financial and lifestyle habits and ended up with plenty.

The difference was habits.

What will be the consequences tomorrow of the habits you practice today?

Argent Advisors, Inc. is an SEC registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information at https://ruston.argentadvisors.com/important-disclosure-information/

This article originally appeared on Shreveport Times: The lifetime compounding of small decisions

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting