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Atomic Habits by James Clear

How Habits are the Compound Interest of Self-Improvement

· Goals and Habits

James Clear has been one of my favorite writers and thinkers for a while. I've followed his blog for years. This blog post, Systems vs Goals, is one of my most shared articles of all-time. I attended one of his habit workshop webinars and learned a ton. So it's no surprised that his first book, Atomic Habits, is easily my most favorite book of the year.

Building habits has been a passion of mine for a long time. There are many small habits that have changed my life over the years - cold showers, no snooze alarm, a vegetarian diet, and a consistent running practice to name a few. Now, as a health coach in training, being able to teach my clients how to build good habits and break bad ones is one of the most important parts of my role. And James' book Atomic Habits is by far the best one-stop-shop for how to do that.

This post will serve as a book report of sorts. I want to document the passages in the book that stood out most to me, and why, and keep all these gems organized in one place. Black is James, gray is me. If this post resonates with you, I highly recommend reading the whole book and subscribing to the James Clear blog.

Why Small Habits Make a Huge Difference

Habits are the compound interest of self-improvement. The same way that money multiplies through compound interest, the effects of your habits multiply as you repeat them.

We often dismiss small changes because they don't seem to matter very much in the moment. If you save a little money now, you're still not a millionaire. If you go to the gym 3 days in a row, you're still out of shape.

This slow pace of transformation also applies to bad habits. If you eat an unhealthy meal today, the scale doesn't move much. But when we repeat 1% errors, day after day, rationalizing little excuses, our small choices compound into toxic results.

Making a choice that is 1% better or 1% worse seems insignificant in the moment, but over the span of moments that make up a lifetime these choices determine the difference between who you are and who you could be.

You should be far more concerned with your current trajectory than with your current results.

Your outcomes are a lagging measure of your habits. Your net worth is a lagging measure of your financial habits. Your weight is a lagging measure of your eating habits. If you want to predict where you'll end up in life, all you have to do is follow the curve of tiny gains or tiny losses, and see how your daily choices will compound 10 or 20 years down the line.

I read another amazing book called the 4 Disciplines of Execution, and they talked a lot about lag measures and lead measures. This is why I think it's crucial to focus on the correct lead measures, the actions that predict and lead to the desired result. With my weight loss clients, we cannot be too tied to what the scale says (lag measure) and instead judge success based on sticking to the diet and exercise plan (lead measures). Even if the scale says there was no weight lost that week, it's still a win if they stuck to the plan, or as James calls it, the system, and here is why...

What Progress Is Really Like

Breakthrough moments are often the result of many previous actions, which build up the potential required to unleash a major change.

The ice cube metaphor - Imagine an ice cube as a room heats up in 1 degree increments. 26... 27...28... to 31 and still nothing has happened. Then at 32, the ice begins to melt. A 1 degree shift, seemingly no different than the previous ones, but this one unlocked a huge change.

Complaining about not achieving success despite working hard is like complaining about an ice cube not melting when you heated it from 25 to 31 degrees. Your work was not wasted; it is just being stored. All the action happens at 32 degrees.

I can't tell you how many rookie sales people at my old company used to get discouraged and quit because they didn't close any deals in their first 10 or 15 sales appointments. I wish I had this analogy back then to help them see that their efforts were not wasted, and they were probably only a few more sales appointments away from a breakthrough! Every sales person that would go 0/15 and not quit would ALWAYS eventually reach a breakthrough moment and start closing deals.

Winners and Losers Have the Same Goals

Goals are about the results you want to achieve. Systems are about the processes that lead to those results.

The goal in any sport is to finish with the best score, but it would be ridiculous to spend the whole game staring at the scoreboard. Bill Walsh said, "The score will take care of itself."

Bill Walsh's book by that same name is also an amazing book. He talks about his Standards of Performance, or the expectations to which all people in the organization must live up to. The whole idea is that the key to building a championship team is to focus on the little things, the daily things, the seemingly mundane things.

How Your Habits Shape Your Identity

Habits are not about having something. They are about becoming someone. The key to building habits that last is to focus on creating a new identity first.

Outcomes are about what you get. Processes are about what you do. Identity is about what you believe. The key is in the direction of change. Outcome-based habits start with what you want to achieve. Identity-based habits start with who we wish to become.

Behavior that is incongruent with the self will not last. You may want more money, but if your identity is someone who consumes rather than creates, then you'll continue to be pulled toward spending rather than earning.

The more pride you have in a particular aspect of you identity, the more motivated you will be to maintain the habits associated with it.

It's a simple 2 step process:

  1. Decide the type of person you want to be.
  2. Prove it to yourself with small wins.

I have a friend who lost 100 lbs just by asking herself, "What would a healthy person do?" All day long she would use this question as a guide. Would a healthy person walk or take a cab? Would a healthy person eat a burrito or a salad?

Ask yourself, "who is the type of person that could get the outcome I want?"

This makes me think of my identity as a runner. I tried to train for a marathon back in 2008, but failed. The difference when I actually ran my first marathon in 2017 is that I didn't set out with the goal to run a marathon. My goal that year was to run 365 miles. I wanted to see what would happen if I "became a runner" and I felt like a runner would at least average 1 mile/day. In January I ran 34 miles. In February I ran 45 miles. In April I ran over 50 miles, and in August I ran over 60 miles. That October I ran my first marathon. In November, even though I wasn't even "training" for a marathon anymore, I ran 66 miles that month. It wasn't about the marathon, it was about becoming a runner. I ran 600 miles that year, far beyond my original goal of 365. In 2018, as I write this, I'm on pace for a 1200 mile year. The key is identity-based habits - first I decided that I wanted to become a runner (identity), so I started running consistently (process), and then I decided to run a marathon (outcome).

One of my favorite all time quotes is, "What you get by achieving your goals is not as important as who you become by achieving your goals." (Thoreau)

How Habits Work

The Habit Feedback Loop: Cue > Craving > Response > Reward >

The cue is the trigger. The craving is the motivational force. The response is the actual habit or action. And the reward is the end goal. The cue is about noticing the reward, the craving is about wanting the reward, the response is about obtaining the reward.

If a behavior is insufficient in any of these 4 areas, it will not become a habit. Eliminate the cue and the habit won't start. Reduce the craving and there won't be motivation to act. Make the response difficult and you won't be able to do it. And if the reward fails to satisfy your desire, you won't have a reason to do it again.

James got a lot of this from Charles Duigg and his book The Power of Habit. My biggest gem from that book was the idea of the Keystone Habit. By focusing on changing just one habit at first, you teach yourself how to reprogram the other automatic routines in your life as well. Keystone habits are about small wins - exercising, making your bed - these small wins spark other small wins and big wins. Keystone habits create a structure for other habits to flourish, and create a value system or culture that makes difficult decisions easier. I think that Keystone Habits are about building the right habit, the one that sparks further habits and changes, while Atomic Habits is more about the power of small habits compounded over time.

The 4 Laws of Behavior Change

To build better habits, you don't need more willpower or motivation, you just need a better system.

Law 1: Make the cues of good habits obvious and those of bad habits invincible.

James talks about habit stacking, or the tactic of using a current habit as the cue for a new habit. I saw success with this for yoga and mediation. Very rarely would I sit down and meditate, but I would do yoga a few times per week, so now I just do a short meditation at the beginning or end of a yoga session.

He also talks about using implementation intentions: "I will [behavior] at [time] in [location]." which is awesome and similar to something I read in the Coaching Habit - When [trigger], I will replace [old habit] with [new habit]. I can see how it can be very powerful to write these down, and/or put them somewhere like your phone wallpaper or bathroom mirror.

Environment is the invisible hand that shapes human behavior. The top environment designers are responsible for retail stores designed to make you buy more, and casinos designed to make you spend more. You can be the designer of your own world. If you want to drink more water, fill up a water bottle and carry it with you. If you want to practice guitar more, place it in you living room. If you want to eat less junk food, don't have ay junk food in the house. If you want to watch less TV, then get rid of cable, or to be really extreme, unplug it and store it in the closet after each use.

"Disciplined" people are better at structuring their lives in a way that does not require heroic willpower and self-control. In other words, they spend less time in tempting situations. Self-control is a short-term strategy, not a long-term one.

This has been huge for me. I have a 40 oz, 24 oz, and 16 oz water bottle, I put cool stickers all over them, and bring them everywhere with me, and I'm always hydrated. Plus it's a money saver and better for the environment to not buy plastic bottles. I went a couple years rarely playing guitar, and when I moved last year, I keep my guitar in my living room and I play it almost every day. I deleted Facebook from my iPhone, and periodically delete Instagram too, and I spend way less time on social media. I actually love that the new iOS update tracks Screen Time, brilliant.

Law #2: Make the craving of a good habit attractive and a bad habit unattractive.

Habits are a dopamine-driven loop. When dopamine rises in the anticipation of a reward, so does out motivation to act. The craving is all about the motivation and desire to perform a habit. 

You can make habits more attractive by reframing the way you think about them. Highlight the benefits of rather than the drawbacks. Instead of telling yourself "I need to go running in the morning," say "It's time to build endurance and get fast.

One of the most effective things you can do to build better habits is join a culture where your desired behavior is the normal behavior. Surround yourself with people who have the habits that you want to have yourself. Nothing sustains motivation better than belonging to a tribe. It transforms a personal quest into a shared one. It's friendship and community that embed a new identity and help behaviors last over the long run.

We care a lot about the habits of highly effective people. We try and copy the behavior of successful people because we desire success ourselves. Many of our daily habits are imitations of people we admire.

I've heard this so many times, and it is so true: "you are the average of the 5 people you spend the most time with." In my first company out of college, everyone wanted to be top sales and had really big career goals. I'll admit that I had a pretty low level of career ambition before being a part of that team, but based on my sports background, I was very competitive. I would compete with the other sales people and was right up there with the top dogs. Many of us would read the same books and talk about entrepreneurship all the time, and we climbed the ranks of the company together, and my experience there is the perfect example of belonging to a tribe and the culture changing my habits and identity.

Another example is me joining a run crew this year. Every Wednesday night I meet up with 30-40 other runners and we hit the trails together. Running ultramarathons is no longer crazy, it's now normal. Friendships quickly formed and we would train and run races together. I went from like 2 friends on Strava, to 50. I'm more motivated to up my weekly mileage because I see what everyone else is doing. I've gotten so much from being a part of that community.

Law #3: Make good habits easy to do, and bad habits difficult to do.

James tells the story of the photography students, half the class were told they'd be graded on quantity, the amount of photos they took, and the other half on quality, they would only be graded on one photo and were tasked with creating a nearly perfect photo. At the end of the semester, all the best photos were produced by the quantity group.

It's easy to get bogged down trying to find the optimal plan for change: the fastest way to lose weight, the perfect idea for a side hustle, etc. Voltaire wrote, "The best is the enemy of the good." There is a big difference between being in motion and taking action. Action gets results. Motion allows us to feel like we are making progress without running the risk of failure. You don't want to merely be planning. You want to be practicing. The 3rd Law is all about getting your reps in.

Repetition is a form of change. Each time you repeat an action, you're activating a particular neural circuit associated with that habit. This means that simply putting in your reps is one of the most critical steps you can take to encoding a new habit. Also, habits form based on frequency, not time. It's not "how long" but rather "how many."

I read somewhere that sleep helps ingrain the neural pathways behind a habit. Learning a new song on the guitar is a great example of this. When I'm learning a new song, the finger placements are hard, and the simultaneous movements of the left hand and right hand are clumsy, the fast parts can only be played very slowly. I go to sleep and pick up the guitar again the next day, and the fingers all of a sudden can play faster and more precisely. I repeat this, and a few days later I'm playing the song well.

Habits are like the entrance ramp to a highway. Checking your phone for a "second" can lead to 20 minutes of screen time. Putting on your running shoes or gym clothes can lead to an exercise session. It's easier to continue what you're already doing than to do something different. These little choices are called decisive moments. Mastering the decisive moments throughout the day is important.

The 2 Minute Rule is scaling down any habit to the first 2 minutes, the idea being to make it as easy as possible to start. Read one page, put on my running shoes, meditate for 2 minutes. The point isn't what you get from the 2 minutes, the point is to master the habit of showing up. A habit must be established before it can be improved. Getting to the start line is more important than getting to the finish line. Once you've established the habit and you're showing up everyday, you can scale the habit up towards the ultimate goal.

A commitment device is a choice you make in the present that controls your actions in the future. It's a way to lock in future behavior, bind you to your good habits, and restrict you from bad ones. It enables you to take advantage of good intentions before you can fall victim to temptation.

I have 2 great examples of commitment devices. Back in the day, I used to purposefully wear sandals out to the bars, that way there was no way I could get convinced to go to the nightclubs where sandals weren't allowed. Another example is signing up for a race, like a marathon. I like to call this the point of no return. Once I fork up the $150 for a race, it's very easy to lock into the training.

Law #4: Make the rewards of good habits satisfying, and bad habits unsatisfying.

Every habit produces multiple outcomes across time, and they are often misaligned. With bad habits, the immediate outcome usually feels good, but the ultimate outcome feels bad. With good habits, it's the reverse: the immediate outcome is unenjoyable, but the ultimate outcome feels good. Put another way, the cost of your good habits are in the present. The cost of your bad habits are in the future.

As a general rule, the more immediate pleasure you get from an action, the more strongly you should question whether it aligns with your long term goals.

Everyone knows that delayed gratification is a wise approach, but it's hard to make the right call at the decisive moment. The best way is to go with the grain of human nature and turn immediate gratification on it's head - add some immediate pleasure to the habits that pay off in the long run and a little bit of immediate pain to the ones that don't.

Immediate rewards are especially important when it comes to habits of avoidance, like "no alcohol" or "limit spending," mainly because when you succeed, nothing happens, there is no satisfaction because there was no action in the first place. So maybe create a savings account titled "Trip to Europe" (a reward) and every time you skip going out or decide to not buy something, put that money into an account as a reward.

Here's a great example of creating immediate rewards to a habit of avoidance: When I gave up eating meat, the reward was to explore many new vegetarian restaurants. Buying vegan cookbooks and trying new vegetarian recipes turned the grocery store and kitchen into a fun and rewarding adventure.

Habit Tracking

Making progress is satisfying, and visual measures - habit trackers (app/sheet/calendar), progress bar, workout log, food journal, etc - provide clear evidence of your progress. As a result, they reinforce your behavior and add a little bit of immediate satisfaction to any activity. Tracking becomes its own form of reward.

Jerry Seinfeld uses a habit tracker to stick with his streak of writing jokes everyday. His mantra is "never break the chain."

Benefits of habit tracking:

  • creates a visual cue that reminds you to act (the last action triggers the next one)
  • it's inherently motivating because you see the progress you are making and don't want to lose it ("break the chain")
  • feels satisfying whenever you record another successful habit
  • provides visual proof that you are casting votes for the type of person you wish to become, which is a delightful form of immediate and intrinsic gratification 

How to Recover Quickly When your Habits Break Down

The first mistake is never the one that ruins you. It's the spiral of repeated mistakes that follows. Missing once is an accident. Missing twice is the start of a new habit.
This is a distinguishing feature between winners and losers. Anyone can have a bad performance, a bad workout, or a bad day at work. But when successful people fail, they rebound quickly.
Too often, we fall into an all-or-nothing cycle with our habits. The problem isn't slipping up, the problem is thinking that if you can't do something perfectly, you shouldn't do it at all.
As Charlie Munger says, "The first rule of compounding: Never interrupt it unnecessarily." This is why "bad" workouts are often the most important ones - you at least maintain the compound gains you accrued from previous good days. Don't put up a zero, and don't let losses eat into your compounding.
The Pitfalls of Tracking (When and When-not to Track)
The human mind wants to win at whatever game is being played, and we can become driven by the number rather than the purpose behind it. We see people taking crazy fat-loss pills or doing crash diets to decrease the number on the scale (what is measured). We work long hours instead of getting meaningful work done. We care more about getting 10k steps than actually being healthy. We teach for standardized tests instead of emphasizing learning, curiosity, and critical thinking. We optimize for what we measure. When we chose the wrong measurement, we get the wrong behavior.

Habit tracking has been huge in my life for the past 3-4 years. I've used apps like Way of Life and I even built an app, called Smart Goals to track habits. I record all of my running/workouts on Strava, and then transfer them to an excel file. I also keep all my financials/expenses in an excel file. For me, tracking has not only added accountability to my habits, but also tons of fun. It's like a game I play with myself.

The "never break the chain" mantra is spot on! The bouncing back when you miss is something I've definitely fallen victim to. It's almost harder because I am tracking everything and I ruined a streak.

James talks about how habit tracking also keeps us honest, and how we have a distorted view of our behavior, often times overestimating how well were are doing. This is 100% the case for me and my financials. I am always spending more than I think I am, so being able to track it monthly in my excel file has kept me aware, honest, and accountable.

He also talks about celebrating "non-scale victories" when trying to lose weight, and not being too tied to the scale. I think this applies to all "non-measured victories." Sometimes I have a prospect who will respond to me and say they are not interested, but that they loved my approach and that it was original. I love to celebrate that in my mind, and remind myself that I'm on the right track and to keep at it.

Advanced Tactics

  • The secret to maximizing your odds of success is to chose the right field of competition. Direct your effort toward areas that both excite you and match your natural skills, to align your ambition with your ability. You don't have to build the habits that everyone tells you to build. Chose the habit that best suits you, not the one that is most popular. Habits need to be enjoyable if they are going to stick. Moral of the story - work hard on the things that come easy.
  • In the beginning of a new activity, there should be a period of exploration (like dating, liberal arts, A/B testing). After this period, shift focus to the best solution you've found. If you are currently winning, you exploit exploit exploit. If you are currently losing, you explore explore explore. And when you can't win by being better, win by being different. By combing skills you reduce the level of competition and can stand out - Scott Adams of Dilbert was an okay artist, and an okay comedian, but combining the two made him rare.
  • The greatest threat to success is not failure, but boredom. As David Cain (author and meditation teacher) says, "don't be a fair-weather meditator." Don't be a fair-weather athlete or a fair-weather writer or a fair-weather anything. The only way to become excellent is to be endlessly fascinated by doing the same thing over and over. You have to fall in love with the boredom.
  • Habits + Deliberate Practice = Mastery. The upside of habits is that you can do them without thinking, but the downside of habits is that you get used to doing things a certain way and stop noticing small errors. More experience does not automatically mean getting better, you could be reinforcing current habits not improving them. Don't slip into the habit trap of complacency. 
  • Reflection and Review is key for making improvements and course corrections. Conduct an Annual Review at the beginning of the year - tally up the habits and ask: what went well, what didn't, and what did I learn? 6 months later, conduct an Integrity Report, which helps you realize where you went wrong and how to get back on course. James says, I use it as a time to revisit core values and consider if I've been living in accordance with them. Reflect on my identity, and how I can work toward being the type of person I wish to become. Ask 3 questions: What are the core values that drive my life and work? How am I living and working with integrity right now? How can I set a higher standard in the future?
  • Paul Graham says, "Keep your identity small." The more you let a single belief define you, the less capable you are of adapting when life challenges you. The key to mitigating identity crisis is to redefine yourself such that you keep the important aspects of your identity even if your role changes. "I'm an athlete" becomes "I'm the type of person who is mentally tough and loves a physical challenge." Like water flowing around an obstacle, your identity works with the changing circumstances rather than against them.

Can one tiny change transform your life? It's unlikely you would say so. But what if you made another? And another? And another? At some point, you would have to admit that your life was transformed by one small change. The holy grail of habit change is not a single 1% improvement, but 1000 of them.

So many gems, right?

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