The two oreo principle: A tool to bring you closer to what you want

Dan Nicholson

Many business owners face the challenge of starting a journey without a clear destination in mind. They may not know their current location, but they still embark on the journey, hoping to end up somewhere worthwhile. This is a common scenario that can lead to confusion and uncertainty.

A client of mine, frustrated by the lack of time for himself and his family, told me he wanted to hire. His aim? To reclaim 10 hours a week back for himself and family time. After in-depth conversations and analysis, we realized he was willing to spend an additional $10,000 a month for this relief.

However, a closer examination of his situation revealed an opportunity for a better solution. His daily commute to the office was nearly an hour each way, six days a week. By moving his office closer to home, for a cost of $2,500 a month, he instantly gained back 10 hours a week previously spent commuting alone. Suddenly, the "more" problem turned into a "closer" problem.

But we didn't stop there. I urged him to review his personal and business bank statements to identify and cancel any non-essential recurring payments. This is where the concept of the Two Oreo Principle comes into play.

A few years ago, I noticed a ten-pound weight gain. On reflection, I realized the weight gain coincided with a change in my snack habits—I'd begun eating two Oreos from my wife's snack cabinet each day. While two Oreos might seem insignificant, over the course of a year, those extra 140 calories a day totaled over 51,000 calories, or nearly 15 pounds.

Much like those additional calories, small financial transactions can seem insignificant in isolation, but over time, they accumulate to a substantial sum. This principle, which I've termed the Two Oreo Principle, is a playful way to think about the compound interest of small financial decisions. Just as cutting out two Oreos a day can lead to weight loss over time, eliminating unnecessary expenses can result in significant financial savings.

When my client performed his "Two Oreo" review, he discovered more than $3,200 in monthly recurring expenses he could eliminate. Thus, he managed to regain his desired 10 hours a week, cut down his monthly expenses, and achieved his goal without taking on extra work or investing more time.

This story underscores the power of focusing on getting "closer" to what truly matters rather than relentlessly pursuing "more." Unless you're running a massive corporation with seemingly limitless resources, each decision you make has a cost in time, energy, and money. Without a clear set of priorities, it's easy to waste resources chasing vague goals.

The Two Oreo Principle is a powerful tool to help identify areas where small changes can lead to significant results. By conducting regular reviews, we can spot the “'extra Oreos”' in our financial habits. In doing so, we ensure our decisions and actions continuously bring us closer to our desired outcomes rather than merely adding more to our plates.

Remember, in your journey towards success, it's not always about more. Often, it's about better—making smarter, more efficient choices that align with your true priorities. As you continue to navigate your business growth, I encourage you to look for your 'extra Oreos.' You might just discover that you're closer to your goals than you thought.

Pause and Reflect

  • How does the concept of the Two Oreo Principle resonate with you? Can you identify any "extra Oreos" in your personal or business life?
  • In your experience, how often do small, seemingly insignificant decisions have a compound effect over time?
  • Can you share an example of when you solved a "more" problem by turning it into a "closer" problem, much like the office move in the article?
  • What methods or techniques do you use to identify and eliminate unnecessary expenses in your business?

Dan Nicholson is the author of “Rigging the Game: How to Achieve Financial Certainty, Navigate Risk and Make Money on Your Own Terms,” deemed a best-seller by USA Today and The Wall Street Journal. In addition to founding the award-winning accounting and financial consulting firm Nth Degree CPAs, Dan has created and run multiple small businesses, including Certainty U and the Certified Certainty Advisor program.

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