“Habits are the compound interest of self improvement. You are what you repeat”. James Clear
Not too many months ago, I accepted an invitation to attend a Financial Education Conference hosted by TD Ameritrade in Las Vegas, Nevada. The conference focused on teaching the assembled retail stock, bond, options and future traders how to make better investment and trading decisions to meet their short, intermediate and long term financial goals.
The weekend events at the MGM Grand in Las Vegas brought together retail and professional traders of varying levels of experience and skills with financial industry employees from TD Ameritrade and several other financial companies.
How can you get one percent better today.
One of the conference’s highlights was the keynote address delivered by James Clear, author of Atomic Habits. His keynote focused on the major points of his book about how to build good habits and break bad habits.
He discussed how winners and losers often have same goals. The difference is that winners have a better system of habits. Unsuccessful individuals have the wrong system that prevents positive change. Essentially, people do not rise to goals but fall to the level of your system.
The power of tiny gains | Why habits are so important.
“Small habits and tiny gains multiply into meaningful results very quickly.” James Clear
The core philosophy of Atomic Habits is that small habits and changes compound over time will make a big difference over ten, twenty or thirty years. For example, the same way that money can accumulate through ‘magic of compound interest’, you’ll have the effects of your habits multiply over time. And it ends up generating sort of a non-linear effect.
He conveyed that this is true for both good and bad habits. This effect of 1% improvements or 1% declines can either work for you or against you. And you see this in, for example, knowledge and productivity compound. So on any given day, getting one additional task done at work doesn’t really count for a whole lot. But over the course of a career, that can end up being a really big difference between what you get done over your career and how
Small habits and little choices, slightly better, can transform us everyday. Make time work for you instead of against you Good habits make time your ally. Bad habits make time your enemy.
Change can habit plank by plank, habit by habit. The actions you take give evidence to whom you are. Every action is a vote for the type of person you wish to become.
Lasting change comes from the compound effect of hundreds of tiny decisions – doing two push-ups a day, waking up five minutes early, or holding a single short phone call. He calls them atomic habits.
In Atomic Habits, Clear showed us how we too turn minuscule shifts in behavour into life-transforming outcomes. The core philosophy here is that small changes compound over time. So the same way that money can accumulate through compound interest, you’ll have the effects of your habits multiply over time. And it ends up generating sort of a non-linear exponential effect.
Focus on systems rather than goals
“The purpose of setting goals is to win the game. The purpose of building systems is to continue playing the game. True long-term thinking is goal-less thinking. It’s not about any single accomplishment. It is about the cycle of endless refinement and continuous improvement.” James Clear
According to James, the systems is what makes the difference. The system, or habit, is the process that takes you to your goal or destination. On average, it takes sixty-six days to instill a new habit or system.
Will power is like a muscle, the more you use it…the more your power will fade and get fatigue.
Focus on building the system of behaviors first before focusing on the goals and objectives. Goals are important. Important to know were you’re going and where your headed.
- Start with a habit or routine that is incredibly easy
- Gradually increase the intensity or scope of the habit in a very small way
- Keep it easy and simple. Break the habit down into small bites, if needed. It in important to reduce the amounts of friction points.