It’s been another great summer of sport and with the Olympics in Paris starting, it will be interesting to see who wins gold and writes their name in the record books.

Whilst watching and reading all about the successful teams or individuals this year, there is a common theme, which has been the importance of marginal gains and the impact these can have on performance.

The idea of marginal gains originated with Sir David Brailsford, the former performance director of British Cycling. Instead of focusing solely on major improvements, Brailsford emphasized the cumulative impact of small adjustments across various aspects of training.

Here's how it works

1. Break It Down: Imagine every factor that contributes to performance. Now, improve each of these factors by just 1%.
2. Aggregated Impact: When you combine these marginal improvements, the overall effect becomes significant.

Now, let's draw parallels to savings and investments and think about the small changes you could make to improve your financial position:

Better Returns:

Cash Savings

There are so many different savings accounts available but many bank and building society accounts are paying very low rates of interest, despite interest rates being at the highest level for over a decade. Check your accounts and then compare these against the most competitive rates available. You might be able to generate an extra 1%, 2% or possibly more!

Pensions and Investments

When did you last review your pensions and investments? Incremental improvements in investment strategies and levels of contributions you make can yield substantial gains over the long term thanks to the magic of compound growth.  

Lower Costs:

Small cost-saving measures accumulate over time. Whether it's cutting unnecessary expenses, negotiating better deals or reducing the cost of investing, these marginal adjustments add up. Too many people are paying for things they don’t need or use and many investors I meet aren’t aware of how much they pay in fees to manage their pensions and investments.

Tax Savings:

By understanding tax-efficient investment vehicles such as ISAs and Pensions, most people can improve their personal tax position and ensure their savings and investments are held as tax efficiently as possible. A pound of tax saved is an extra pound in your pocket!

In summary, whether you're chasing sporting excellence or financial security, remember that consistent, small gains lead to remarkable results. So, focus on those 1% improvements—they're the real game-changers!

August 2024