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A Short Guide to Changing Habits – 5 Strategies for Successful Self-Improvement

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“Chains of habit are too light to be felt until they are too heavy to be broken.”

– Warren Buffett

Understanding Habits

In life, we are constantly bombarded with decisions we have to make. If we took the time to thoroughly analyze all of the pros and cons of each decision, we would be paralyzed by the sheer volume of analysis required. Luckily, as humans, we have the ability to make snap judgments about the importance of decisions, allowing us to focus our thoughts and energy on those that are most important. For the rest, we rely on our instincts and intuition, honed over years of experience, to guide us, subconsciously, through the litany of tasks and choices we simply don’t have the time to consider in detail.

These subconscious decisions are our habits. Habits are very necessary—they allow us to effectively navigate a complex world by simplifying our daily mental to-do list. They are also—it turns out—very difficult to change. The following three concepts will help you understand why: inertia, ‘path dependence,’ and ‘mindless choosing.’ For now, however, just think about the following question:

Have you ever gotten in the car, started driving, and then minutes later realized you were driving yourself to the wrong place? (the place you drive to most often)

Don’t underestimate the power of habits. Sometimes your habits are not serving your best interest and need to be changed. They absolutely can be changed. But this process takes thought, energy, and planning. If you are serious about changing a habit, the following explains how you can go about doing it. Read more

The Best Time Management Tool We Have Ever Seen (since the calendar): You Know It When You See It

Why Time Management Tools are so Important

A major part of making good decisions is understanding your limitations and seeking help in areas where you are inherently weak. As it turns out, we are ALL inherently weak when it comes to time management.

Why? Try asking yourself this question:

What is the optimal amount of time I should spend on every activity in my life, so that when it is all over I will have lived the best life I possibly could? (assuming that is your goal).

Based on your answer, now try going out and spending the right amount of time on each of the activities you think are important. This is absurdly difficult, and most people come up WAY short. Our brains are excellent at focusing in, completing tasks and solving individual problems. However, our brains are terrible, once in the middle of a task, at knowing when to switch gears and move on, so that our overall life is in balance. We just aren’t conditioned to view little daily tasks in terms of our big, life-long goals (in fact it would be pretty annoying if we always did).

Yet those who can do this—map out their time effectively and then follow through—are often hugely rewarded in the game of life. The fact of the matter is that people who lack this skill have a tendency to wonder aimlessly from task to task, while those who possess it seem to constantly be moving forward, building towards something great.

The Problem with Most Tools

The Post is always on the lookout for tools that can help. The main problem with most of the time-management tools we have tried is that they view your life as just a long to-do list. Don’t get me wrong, you should have a to-do list for daily tasks. But your life is not a to-do list. There are an unlimited number of tasks you could perform, so simply writing some down accomplishes next to nothing. Rather, life is about choosing the right tasks—among the endless possibilities—to put on your list. Read more

Snowball Theory: The Powerful Inertia of Positive Decision-Making

Life is like a snowball. The important thing is finding wet snow and a really long hill.

–Warren Buffett

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Say you wanted to make a snowball. Not a snowball with which to hit a friend in the face, but one that is really, really big.

How would you go about making it?

One option is to just start packing—gathering the snow around you, forming the spherical shape piece by piece. You could even convince others in the neighborhood to help you with your effort. You can make a nice snowball this way.

But the snowball is only going to keep growing for as long as you and your friends have the patience and energy to continue the endeavor. What’s more, your task gets harder as you use up the snow in your immediate vicinity, and your snowball grows to the point where each additional handful of snow barely makes a difference in growing the snowball’s overall size. Mom will inevitably call you in for dinner. The game will be up.

You may be thinking, maybe thanks to the not-so-subliminal prologue, that there could be another way to build the snowball. But this other way is tough. The idea isn’t complicated, but it’s hard to execute because it takes time, foresight, and persistence. The method I’m referring to is, of course, finding the really long hill and letting the snowball roll. At first the person who was building the snowball by hand will have a big lead, because while he was building, you were thinking, planning, and trudging up a hill. But when all is said and done, your snowball is much larger—almost inexplicably larger—with the process having been oh so satisfying. Read more

Do Your Decision-Making Skills Pass The Marshmallow Test?

Early in the 1970s, Walter Mischel conducted one of the most important psychological experiments of our time, helping us understand how human beings deal with situations in which our logical-selves and our emotional-selves disagree about what to do. As it turns out, 4 year olds can tell us a lot about how we can overcome temptation to achieve the outcome that is in our best long-term interest.

The experiment had three parts. First, children age 4 were brought individually into a room and were asked if they liked marshmallows. The answer was a resounding yes.

Second, each child was presented with a choice: You can have one marshmallow now, or wait a few minutes and have two marshmallows. Almost every child said that he or she would wait to receive the extra sweets.

The third part of the experiment was a bit cruel. The children had marshmallows placed on the table in front of them and were told this by the proctor: I am leaving the room to go to a store; you can eat the marshmallow. However, if it is still there when I get back, you can eat it and have a second one.

As soon as the Proctor left the room, the agony began. The kids were torn about what to do. Very few could make it the full 15 minutes without reaching across the table and eating the marshmallow. Many couldn’t make it one minute. But a few passed the test, and they enjoyed the pleasure of eating a second marshmallow.

When Mischel followed up on his experiment a decade and a half later, he discovered something striking. The children who could avoid the sugary temptation, as a group, had fewer behavioral problems as teenagers, received better grades, were less likely to do drugs, and scored higher on their SATs, than those children who could not. Read more

Physiologically Flawed Decision-Making: Staying Skinny & Cool with 6 Simple Tips

We’ve all done it, though it’s highly ill-advised. We hope we don’t get caught by someone we know. Yet it’s still awesome. Really, what could be better than taking a trip to the grocery store when you are hungry…I mean really hungry.

Not Girl Scout cookie season? No problem! Just grab some thin mints on Aisle 4.

Smell that waft coming from baked goods? You’ll need some marshmallow cupcakes to celebrate your cat’s half-birthday.

If you are at the supermarket having not eaten in a while, and you are not tempted to go on a junk-food shopping-spree, check your pulse—you may be dead.

Now, over the course of a week, you could lay out a food plan that meets your goals for healthy living. You could manage calorie and saturated fat intake, as well as allot yourself some “sweets” as a reward for staying on track. From this plan you could derive your shopping list, adjust for price-based tradeoffs to meet your budget, and “walla!” You’ve got an optimal grocery list based on reasoning and sound judgment.

Yet when we get to the store, starving, all of this careful reasoning goes out the window, as we become overwhelmed by the sights and smells of the store, enhancing our pervasive hunger.

In this circumstance, why do we feel so compelled to be manic shoppers, acting as though we are preparing for our own last supper, making purchases we will soon regret? Read more

Being Clutch (or not): What Sports Can Teach Us About Thriving Under Pressure

The following article was written last month, but we feel now is a particularly opportune time to publish it, given the completion of the NBA finals on Sunday and the controversy surrounding one particular Miami Heat player.

I’ve always admired Sports’ ability to serve as a microcosm for life’s experiences.  One of the most fascinating acts that repeatedly plays itself out on the sporting stage is known as “the choke” (a.k.a. the collapse, the total meltdown, or the “brain-fart”). We will watch transfixed as the scene in front of us stirs up a brew of emotions including sympathy and guilty satisfaction (“even I could do better than that!”). A train-wreck of this sort may be hard to watch, but that won’t stop anyone from watching.

A propensity to choke may not be at the very top of the list of unsavory attributes a person can possess, but it’s pretty close. Nobody wants to be ‘that guy.’ And, of course, this undeniable fact raises the stakes
even more.

Further, choking and its foil—being “clutch”—make up the scale by which we evaluate athletic performances at the highest level. Many people possess elite level skills, but few can continue to perform at that same, high level when the pressure starts the pile on. Even fewer seem to possess the characteristic that arguably defines greatness: the ability to raise one’s performance level to yet unseen
heights in order to match the enormity of the moment. For Michael Jordan in game seven this was called “being in the zone,” for Tiger Woods standing over a put at Augusta this was called “Tiger vision,” and for Rodger Federer at Wimbledon it is simply “saving his best for last” (sorry Tiger, I’m going to
use past tense for now).

At the other end of the scale are the great “chokes.” Athletes find themselves in the defining moment of their career on their respective sports’ biggest stage, and, suddenly, without warning, they are unable do what they have done their whole careers and what has got them to that point. Read more

No More Excuses: Why You Should Become an Investor and How to Start

Potentially the most important message we advocate for is this: Think. And plan some too, because things don’t always happen on their own.

When it comes to investing, waiting to start can be a big mistake. We try to lay out here our rational for the importance of starting early.  It really comes down to the power of compounding returns, where putting away even small amounts now can have a large impact on your financial future.

Hopefully, from our advocacy and the attention this issue has recently gained in society and the media, you have grown comfortable with the idea of becoming an investor. If not, take a look at Fidelity’s Investment Growth Calculator for a little extra motivation (you can use 8% for ‘rate of return’ & 3% for ‘inflation’). This tool illustrates how returns compound over time and should provide a better sense of the opportunity you have as a young adult investing with a long-term perspective.

Unfortunately, despite its benefits, getting started investing is often an intimidating prospect. This is your hard-earned money, and you don’t want to “mess up.” You might wonder “what stocks should I buy and where do I go to buy them?” and “how much money should I put in each?”

The good news is that the answers to these questions are actually pretty straightforward with a passive investing strategy. This is a technique that often makes sense for individuals who 1.) don’t feel confident picking stocks and 2.) can’t/won’t pay someone thousands of dollars to pick for them. We go into more detail on how and why a passive investment strategy works here.

But even though a strategy makes sense intuitively, it can still be hard to actually implement. People often lose sight of the forest when they’re among the trees. So here is a big-picture outline of what you are doing when you start investing: Read more

Saving vs. Investing

We’ve noticed that a lot of people in their 20’s don’t think about the difference between “saving” and “investing.” So what is the distinction here? Both involve forgoing current consumption in hopes of future benefit; however, they differ with respect to risk (possibility of losing money) and return (the amount of interest earned over time). When “saving”, you store wealth with lower risk but also a lower return. An example of this would be placing money in a savings/checking account or in the safe under the bed.  In contrast, “investing” requires that you assume higher risk with the expectation of a higher return and normally involves financial instruments like stocks and bonds. Our partner website, TheRestInvest.com, discusses this process in more detail.

Here are some “Saving” Basics

Where?

While the line between “saving” and “investing” is more gray than black, saving focuses on “preserving” money, while investing seeks to “grow” money. The following are common places where people save:

  • Checking/Savings account at a bank
  • Treasury Bills (loans to the government which mature in less than 1 year).
  • Cash (the money you keep safe in your house)
  • Certificates of Deposit (commonly called “CDs”)

Why Save?

Having adequate savings is an important early step in establishing your financial future. You want to make sure you have at least some money easily accessible in case unexpected expenses arise. Here are three priorities for which it is important to save:

  1. Basic living—Out of practicality you need to keep a certain amount in a checking/savings account to pay bills, write checks, etc.
  2. An emergency fund—Life often provides surprises and, occasionally, unpleasant ones. Many experts argue you should save at least enough money to live comfortably for 4-6 months in case of job loss, sickness, car repair, etc.
  3. Short-term savings goals—If you are saving for a near-term goal (holiday gifts, house down-payments, vacation, etc.), it is often more appropriate to save in a low-risk setting like a bank account. Read more

Using ‘Opportunity Costs’ to Help Frame Decisions

For anyone who has ever taken Economics 101, one of the first utterances you inevitably hear come out of your professor’s mouth is the phrase “opportunity costs.” This is because the concept of opportunity costs is a cornerstone of the framework economists use to analyze decisions that people make. An opportunity cost is what you have to give up when you make a decision; it’s the best option you do not choose. For example, the opportunity cost of going to college is the money you could earn by working instead of having to go to school.

Framing important decisions in terms of opportunity costs can provide an important tool for making careful choices and can make the tradeoffs involved in a large purchase more salient. As Tom McMackin pointed out in his recent post, without a disciplined decision-making framework, people have a tendency to evaluate alternatives relative to one another rather than in absolute terms. For instance, you might be reluctant to spend $2,000 to buy a used car when the same vehicle is available with a crumpled bumper for $1,000. However, you wouldn’t hesitate to choose the unblemished vehicle for $16,000 if the damaged car was priced at $14,000. In this situation, the relative pricing masks your seemingly conflicting preferences. You weren’t willing to spend $1,000 to avoid the damage in the first situation but gave up $2,000 for the same improvement when the stakes were higher.

One specific technique that you can apply to make better decisions about money is to visualize the alternative ways in which it could be spent. So next time you have to make a large purchase, weigh the benefits you will receive from the purchase against your next best alternative for spending the money. For example, how many fancy dinners could you afford with an extra $2,000? Maybe you could buy that sharp tailored suit that you’ve been eyeing or the new tennis racket you’ve wanted. What are you giving up by choosing one alternative over another? It all depends on your own situation and tastes, but this thought process can help make your decisions more consistent and better aligned with your true preferences. Read more

Trumped: How the Truth Eventually Catches Up with Even the Best Attention-Seekers

There are some really successful people out there who will tell you that life is about constructing narratives. We often think in narratives, and if you can get someone to buy into your narrative, it is much easier to get them to do what you want. This is often referred to as a person’s “gravitational pull,” meaning his or her ability to bend reality in a certain direction, attracting others to seek participation in the story he or she created.

Donald Trump used his gravitation pull to help him achieve success. Throughout his career, people would tell him projects were too expensive, planned buildings too big, and permits too hard to come by. They might have even told him this was “the reality of the situation.” But then Trump would present his own version of reality, one of revitalization, achievement, possibility, and certainty. People would look at both narratives and then choose his. Buildings would be built, and Trump became one of the most successful businessmen in America.

But Trump didn’t stop there. For him, business wasn’t mainly about modestly achieving success, by, let’s say, building a great organization or addressing a societal need. Rather, he used his business empire primarily to further his own public image and ostentatiously broadcast his business success to the world.

There is an inescapable risk associated with achieving success in this way. As we learned in physics class, gravity is a two way force. The farther one tries to stretch reality in their direction to achieve self-serving ends, the more violent the snap when reality inevitably gets its own say in the matter.

You see, the reality is that people who seek to be liked and admired above all else, people who constantly feel the need to demonstrate their worth to others in order to satisfy themselves, are, by definition, narcissists. And no new building with one’s name on it, no matter how tall, can prevent that from being the case. Read more

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