[GREATEST HITS] James Clear: How Small Daily Actions Compound Into Life-Changing Wealth [RERUN]

23:37Well, that doesn't really make sense, In one case, you're conflicting. So maybe the reward should be having an hour to spend however you want it. And so now you're reinforcing this idea of freedom and control over your time, which is probably what you're saving for as well. And so you want to have the external reinforcement match the desired identity. That makes a lot of sense. The reward for running then would be getting a nicer pair of running shoes. Sure. Well, or it could be something like that. It could be getting a massage, which would be casting a vote for taking care of your body. So it's the same thing as, you know, like going and exercising or eating healthy or whatever.

24:13It depends on the different goals that you have, but there are often ways to find those two that support each other. Now, how does temptation bundling tie in with creating a motivation ritual? So a motivation ritual is the phrase that I use for some small action that you repeat in the same way each time that sort of gets you moving in the right direction. So it's like, you can think of it a little bit like an on-ramp to a highway. So I played baseball for a long time and all the way through college. And one of the things about baseball is that you have a ton of games. There's so many games, especially compared to other sports.

24:46And so coaches are always saying something like, all right, you got to find a way to be motivated today. You got to find a way to be inspired to play. And there's going to be just naturally days where you feel off. And so you have to figure out some way to get into game mode. And so what I did was I had this same ritual that I would do every time. Same type of stretches, same sequence. I'd run across the field at the same point and then stretch over there and then run back and do the same number of throws and all that type of stuff. And the whole thing took about 10 minutes. And by the time I finished it, it was kind of like I was flipped a switch in my mind where it was like, Oh, Hey, remember this?

25:19Like it's time to be in game mode. It's time to play. You can do the same thing for pretty much any process. And if you get really good at it, you can actually scale the ritual down and maintain its potency, maintain that kind of light switch type of feeling that gets you in the mode right away. So one example, there's this writer, his name's Ed Latimore, and he would put his headphones on and listen to music without words, classical or jazz or something like that, and then write. And he did this for a few months. And then he, he realized one day that he put his headphones on, but he forgot to turn the music on.

25:51He just like immediately went into writing and he was like, Whoa, my, my brain is like getting into writing mode. I don't even need the music anymore. But what happened was he essentially associated that motivation ritual of put your headphones on and play music with writing and he was able to get into the zone just by putting his headphones on and so by building a small motivation ritual like that you can make it easier to initiate a habit and then of course make it easier to follow through each day the kids are back in school now and i finally have some extra time to plan a weekend getaway for just us.

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29:05How could a person apply this? Let's say that there's a habit. So something like writing is something that you do at a specific time for a specific duration. What if there's a habit that you're trying to form that is low intensity but long duration? So for example, spending less money, which is something that you don't do at any one particular time X. It's something that you do throughout the day in small doses when you don't buy that shirt online. You don't buy that coffee at Starbucks. Habits like this, don't spend money, don't drink alcohol, are what I would call habits of avoidance. and they're inherently hard to build because, so we talked about those four stages, the first three stages, the cue, the craving and the response, make it obvious, make it attractive, make it easy are about getting you to perform a habit the first time, right?

29:57So they're everything that precedes the habit and then the action itself, but make it satisfying. The reward, that fourth stage is about getting you to repeat it again the next time. And so for habits like the ones that you just described, well, you inherently need to repeat that again and again throughout the day whenever you're facing a purchase decision or whatever. And so the key to getting that to stick is to having some kind of little, it doesn't have to be huge, but some type of immediate satisfaction that is associated with the behavior. Because if you have that, then you have two things.

30:28One, you have this expectation that gets reinforced because if the behavior is satisfying each time, well, then it starts to impact the craving that you have before the action. You start to, oh, I expect this to be enjoyable. And then the second thing is that you have this kind of positive signal, this positive emotional signal in the brain that tightens the feedback loop for next time. Positive emotions cultivate habits and negative emotions destroy them. And it's really the key here is not necessarily the size of the satisfaction or the reinforcement or the reward, but the speed of it. So in the book, I refer to this as the cardinal rule of behavior change, which is that behaviors that are immediately rewarded get repeated.

31:10behaviors that are immediately punished get avoided. The key challenge here when dealing with these habits of avoidance, like not spending money is that behaviors like that are inherently unsatisfying. They're inherently not rewarding because it's like, well, all I'm doing is just resisting, you know, like I'm just not going to Starbucks or I'm just not eating out for dinner. And so you need to kind of flip this on its head and find a way to be satisfied in the moment. So I had one reader, he and his wife wanted to eat less meals out and cook more for themselves, both to save money and to just be healthier in general.

31:46This is one of those habits of avoidance. We're just trying to not eat out. So what they did was they created a savings account and they labeled it trip to Europe. And then each time that they skipped going out to eat, they would move$50 over to the account. And then at the end of the year, they were able to put the money toward the trip. and the nice thing about that is it kind of gives you an immediate way to feel satisfied it's like okay well we don't get the satisfaction of going out to eat the meal but we do get to see the savings account increase right away and so there's a little signal there that says yeah this was worth it now if you have a smaller behavior like you're just trying to resist purchases all day long then perhaps that isn't possible you know like eventually you're just moving all this money over and maybe you don't have enough to save or something like that so there are other ways that you can do this Again, we come back to the ultimate form of immediate satisfaction is a reinforcement of your desired identity.

32:36So if you adopt that mindset of I'm the type of person who doesn't spend on frivolous purchases or I'm the type of person who takes the actions that are needed to retire early or something like that, then you can reinforce that identity each time you resist the change. but you also could use a method called habit tracking, which essentially is like putting an X on the calendar each day that you do a habit. Or in this case, perhaps you keep like a number of tally marks. So it's like, Oh, I have avoided purchases five times today or something like that. Putting down each tally mark is kind of like a small, but immediate bit of reinforcement.

33:11It's like visual proof of being that being the type of person that you want to be. And so having some small way to feel satisfied in the moment is a key to getting behaviors like that to stick in the long run. I suppose something as simple as sending out a tweet saying tempted to buy X, didn't do it, could reinforce that as well as help you foster that community in which that behavior is normalized, which is another thing that you talk about. Oh, yeah. So social reinforcement is huge there. That's a really good example, Paula, actually, because it not only does it reaffirm that you're that type of person, but then eventually you get like the respect and approval of this group that you're attracting who's also into that.

33:48Society leans heavily on us all. There are all sorts of habits that we perform just because society expects it of us or the tribes that we are a part of expected of us. You can take broad things like if you go into an elevator, you turn around to face the front. Or if you have a job interview, you wear a dress or a suit and tie or something nice. There's no reason that has to be that way. You could face the back of the elevator. you could wear a bathing suit to a job interview. But we don't do it because it violates the shared expectations of the group. And many of our habits are like this. You hear this very commonly with financial habits.

34:26You know, people will be like, well, I really want to save more, but all my friends are going out to eat and I feel like I'll be left out of the friend group if I don't go out to happy hour with them. And so what you need is to join a group where the desired behavior is the normal behavior because if your habits go against the grain of the social group, it's very hard to stick with them. Habits that go against the social norms of your tribe are unattractive. Habits that go with the social norms of your tribe are very attractive. And the key here, the caveat is you need a sense of belonging. The thing that makes you want to go with the tribe is that you belong there, that if you don't, you feel like you'll lose your friends.

35:04And it's often much more effective to have a new tribe to go to than to try to just like branch out and do it on your own. That requires a lot of courage and bravery. And it also requires you to be lonely. And if, if we have to choose between having the habits we want to have and being alone or having the wrong habits and being with the group, we often would rather be wrong with the crowd than right by ourselves. And so it really helps if you have a new tribe to join or a new group to hang out with other people who believe in the same type of behavior you're looking to build. So that can be socially reinforced as well as reinforcing your internal desired identity.

35:42Let's talk about the third law to create a good habit, make it easy and to break a bad habit and make it more difficult. Sure. So this is largely about the amount of friction that is associated with the task. So you can think about it sort of like if you had a garden hose that was bent and you wanted to get more water through the hose, you have two options. I mean, one, you could just crank up the valve and force more water through, in which case, um, you're effectively like overpowering the challenges that you're facing. And the other option is just to, you know, unwind the hose and remove the bend and let water flow through naturally.

36:15And both of those are ways of getting something done of getting more water through the hose of getting the habit performed. But one of them increases tension in your life and requires more effort and the other relieves tension. And so when it comes to habits, what you want is to relieve the tension associated with the task, to remove the friction that's holding you back. So it's more likely that you'll be able to stick with it over the long run. Fantastic analogy, by the way. It was one of my favorites. Oh, thank you. It's sort of like, you know, you're looking to remove that friction. And the key here is that this is something that is a little bit counterintuitive when you talk about the idea because we've all heard this idea like, oh, you should start with small steps.

36:54But there are two challenges. The first is it goes against things that we're often told, like you need to have more willpower or perseverance or to push harder. You need to have grit. And there's nothing wrong with those qualities. It's just that relying on that exclusively is a bad strategy for long-term change. You might be able to overpower the challenges in your environment for a day or a week, but I've never consistently seen someone stick to positive habits in a negative environment, stick to difficult habits in a high-friction environment. environment. One way to do this is to practice this method that I referred to earlier, which I call the two minute rule.

37:31And I had a reader who did something similar. So he, he ended up losing over a hundred pounds. And one of the ways that he did it was that he went to the gym, but he wasn't allowed to stay for longer than five minutes. And it sounds crazy, but he did this for like six weeks. He would show up at the gym, do like half an exercise, basically five minutes would be up and they walk out the door and go home. It's the exact opposite of what people usually do when they're looking to get in shape. You know, they get all motivated and try some really hard workout and then bust their butt and sweat like crazy and do that for a couple of weeks.

38:02And then they fade out and then the process repeats itself, you know, three months later or whatever. But if you think about it, what he was doing was actually makes a lot of sense, which is that he was mastering the art of showing up and a habit must be established before it can be improved. If you don't master the art of showing up, there's nothing left to optimize anyway. And so if you can scale the habit down to just the first two minutes and figure out a way to show up each day, then you have the chance to improve from there. This is doubly important because there are all these like logistical details associated with building a better habit that most people never think about in the beginning.

38:39I mean, we're very results oriented or outcome oriented. And so we think about things like, all right, I want to lose 20 pounds or I want to make six figures this year or whatever the outcome is that we're looking to achieve. But if you think about like, take this reader example of going to the gym. I mean, there are all sorts of details that you need to figure out. Okay. You want to go to the gym each day. Well, what gym is it? What route will you take to get there? Are you going to go by yourself? Are you going to join a friend? Are you going to go before work or after work? Do you need to pack gym clothes?

39:10Are you going to go home and change? Do you need to have a water bottle or is there a water fountain at the gym? This sounds like silly little stuff, but like if you keep forgetting your water bottle and there's no water fountain in the gym, that's enough to get people to quit in the beginning. And so if you're focused just on the first two minutes and not on the outcome, then you can figure all that stuff out. You'll know that you'll be there each day and then you can shift your focus to expanding and improving from there. So obviously the core idea here is to make it as easy as possible so that you so easy that you could show up 98 % of the time.

39:42Then if you do that, you have a lot of choices. Given that it takes time first to establish that habit, it takes both time and frequency to establish that habit and that it often is more effective for those habits to start small and that there aren't necessarily going to be immediate results. and given that those results are not linear but rather compounding. I mean, how do you square that with the fact that people are inherently motivated by seeing results and once a month or two months pass by without any visible results, people can feel discouraged? Well, so you've just described one of the great challenges of building good habits and breaking bad ones, which is that behaviors often produce multiple outcomes across time.

40:25So, you know, if you take the habit of eating a donut, the immediate outcome is favorable. It's sugary. It's tasty. You enjoy it. The ultimate outcome that you gain weight in a couple weeks or a month is unfavorable. But for good habits, it's often the reverse. The immediate outcome of going to the gym, for example, is that it takes effort and hard work and sacrifice. But the ultimate outcome that you're in shape a month from now or a year from now is favorable. And so a lot of the challenge is figuring out ways and we've talked a little bit about those immediate reinforcements and ways to kind of layer some satisfaction onto the behavior.

41:03But a lot of the challenge of building good habits and bringing bad ones is figuring out ways to pull those long term consequences of your bad habits into the immediate moment. So you feel it right then. It's unsatisfying to do it in the moment and pulling the long term benefits of your good habits into the immediate moment so that you feel it right then and you have a reason to continue to repeat it. And I think in the long run, identity and social groups, some of the tribes that we talked about before, are two of the strongest forms of reinforcing that and getting a habit to stick. They find there was a really interesting survey done with the YMCA and their chain of gyms where they found that for the entry survey, the things that got people to sign up and join in the first place, it was often about the resources, the facilities, the classes they had or the machines that were available.

41:52But when they surveyed people who had been there for a while, a few months or a couple of years, the thing that got people to stay were the relationships and the friendships that they had. And I think that that's probably true for habits as well, that it's often the external reinforcements or the immediate results or the immediate reward that you layer on top of the habit that gets you to show up in the beginning. But the thing that gets it to stick is the adoption of a new identity or the adoption or joining of a new tribe and the social and kind of like internal reinforcement that is associated with that in the long run.

42:25What would you say to somebody who lives in a small town or who is unable to find a geographically close by tribe of people who can reinforce a given behavior? It's a great question. Thankfully, we live in an era where the Internet exists. So we have a couple options. Previously, before the internet, you were confined to the person that was on your team or in your violin classes or went to your school and hoped that they would have the same interests as you and wanted to build the same habits as you. And you were kind of geographically constrained. Now we have a little bit more option with the digital environment.

43:03So social media in particular is a key one. Um, if you think about it, the people you follow on social media, it's sort of like you get to create your own little city. Um, you get to decide who the citizens are and what they're talking about each day and the ideas you get exposed to. And so you should be really careful about who you follow on those platforms because those are the ideas that you're going to be exposed to again and again. So if you choose carefully, uh, you can surround yourself with a fair amount of stimuli that maybe nudges you in the right direction. But the other thing that you can do is living in a small town or living in an area where you're geographically constrained, you do still have the option of trying to find or create a space where you're not fighting stimuli.

43:46So this is how it often feels if you're not surrounded by people who share your goals. It's like, well, not only do I have this goal and I have to put in work to achieve it, but now I'm also trying to like overcome the competing forces, the competing stimuli that I'm feeling from the people around me or the folks that I work with or whatever. In many cases, building a habit in an environment that already has competing stimuli is a very difficult thing to do. So we can think about this in a physical sense before we think about it in a social sense. So if you have your television in your living room and you're always watching something each night and you want to build the better habit of reading, well, trying to do it in that environment is hard because what you're used to in that context is turning on the television each night.

44:28And so if you walk into the living room to read, you're now fighting against this kind of non-conscious or competing stimuli of using the television. And it's similar in a social sense that if a certain group of people that you hang around have a typical style of behavior or set of habits, and you try to do something different in that context, you're again competing against those stimuli. And that can be a challenging thing. So in many cases, both in the sense of the physical environment and in the social environment, it's easier to build a new habit if you're in a context where there's no stimuli or relationship with that environment that's already established.

45:06So if you want to build a journaling habit, it might be easier to do that at a coffee shop that like you've never visited before, but as close to where you work and you just go there each day. And that's that becomes the new place where the journaling habit lives rather than trying to do it in your living room where you're used to watching television all the time. And the same thing is true for finding a group or a new tribe or a new social group that you're a part of. So rather than trying to butt heads with the people that you hang out with all the time and force this new habit in Maybe you carve out an hour for yourself each day where you go to a new place Whether it's a room in your apartment or your house or a new place in town That you don't have anything associated with and it becomes the hour that you get where you either spend it online with this particular community Or for certain habits Maybe that's the hour that you go to this new gym and you're looking to build new relationships there and meet people and so on the last thing i'll say about this about getting social habits to to stick is that the key part is not uh well it's two things the first is that the desired behavior is the normal behavior in that group but the second part is that you have something else that you share in common with those people so you have a reason to connect with them already and then once you belong once you have that friendship, now you have a reason to perform the normal behavior.

46:27For example, Steve Cam runs a site called nerd fitness and nerd fitness is about getting in shape, but it's specifically tailored to people who love superheroes or star Wars or Legos or all kinds of other nerdy stuff that people are into. And so if you go to join that group, you might feel just out of place as normal when you go to the gym or starting something new. But if you can bond over like your mutual love of Star Wars, then you have a reason to connect with the group to build friendships. And then you can slowly develop all the health related habits that you were looking to build in the long run.

47:02So it's often better to find kind of those like mutually beneficial back doors or common interests and then build a friendship over that and let the habit kind of evolve or nudge yourself in that direction naturally. That makes a lot of sense. And that's why you see there's a local cat cafe here in Las Vegas where I live that does cat yoga, yoga in the cat room. Yes, that's a perfect example. Goat yoga is super popular right now, too. You know, it's like, all right, all these people love these goats on Instagram and whatever. And then they go there and they also practice yoga and get to hang out with the animals they love, too.

47:38So imagine it's midnight, you're on the couch, you're scrolling through this new website, hitting the add to cart button, and you decide to check out, but you remember that your wallet or your credit card is in the other room and you don't want to get off the couch. That's okay. You don't need to because there's that big iconic purple shop button. You know the one. With that shop button, that's Shopify. And there's a reason that so many businesses sell with it because it makes everything easier from checkout to creating your own storefront. Shopify is the commerce platform behind 10 % of all e-commerce in the US, from household names like Mattel and Gymshark to brands that are just getting started.

48:16Shopify will give you a leg up from the beginning with beautiful ready-to-go templates to express your brand. And you don't handle everything in one place from inventory to payments to analytics. And they've got built-in marketing and email tools and that iconic purple ShopPay button used by millions of businesses around the world. If you want to see less parts being abandoned, it's time for you to head over to Shopify. Sign up for your one month,$1 per month trial period and start selling today at shopify.com slash Paula. Go to shopify.com slash Paula. Shopify.com slash Paula.

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49:37This Friday, the NBA on Prime tips off with their debut doubleheader. First up, Boston brings the action to the Garden as the Celtics face the New York Knicks. Then out west, it's a battle of the superpowers. as the Lakers try to poster the relentless pace of the Minnesota Timberwolves. The Celtics and Knicks, who has the most hustle in defense? This game will come down to who wants it more. And the Timberwolves and the Lakers, it's two Western Conference heavyweights going toe-to-toe. Buckle up, folks. This one's going to be electric. Celtics-Knicks, T-Wolves and Lakers. Coverage starts Friday, 7 o 'clock Eastern, only on Prime.

50:29so let's talk about the fourth law so the fourth law is make it satisfying and as i mentioned earlier we could summarize this with the the cardinal rule of behavior change which is behaviors that are immediately rewarded get repeated and behaviors that are immediately punished get avoided but it doesn't have to be a punishment or even an external reinforcer per se you could just find ways to make the habit itself a little more enjoyable in the moment. So businesses are fantastic at doing this. A common example is toothpaste. There's no reason that toothpaste needs to taste minty. It just increases the satisfaction and the clean mouth feel of using it.

51:05And so you have a reason to repeat it and brush your teeth again more in the future. It doesn't actually increase the effectiveness of the paste itself. Chewing gum was a similar story. For many years, chewing gum had been around, but it was chewy, but not really tasty. It was kind of like this bland resin. And then Wrigley came into the field in the late 1800s and they came out with juicy fruit and spearmint and double mint. And for the first time, gums had these flavors. And so now you chew gum and it's like, oh, this is tasty. I have an immediate bit of satisfaction associated with it. That's when chewing gum really took off as this worldwide habit.

51:39An interesting new example or recent example, car manufacturers have now started. So BMW did this a few years ago and Ford has done it recently as well. And they've come up with ways of adding like an engine roar or growl to the process of stepping on the accelerator. So BMW will actually pump it through the stereo speakers so that when you press on the gas, you get this louder growl. Ford has come up with this method where you essentially like the engine sound is muffled. So it's a quiet drive most of the time. But if you really step on the gas, it opens up this valve and kind of lets the engine sound into the car.

52:13but that's simply a method of making it more satisfying in the moment to press on the gas and drive the car. So there are a variety of ways that businesses try to do things like that to increase the positive emotional signal associated with doing the habit. And again, the immediate that is, the more likely you are to repeat the behavior in the future. Right. That was the famous example with Febreze from Charles Duhigg's book where artificially adding an ascent to Febreze, even though it wasn't necessary, created a positive emotional signal that reinforced the behavior of spraying it. Right. The cleaning solution was the same the whole time, but just cleaning the house wasn't enough to get people to build the habit out of it.

52:51It wasn't until they added the scent that it was a satisfying experience and they had a reason to repeat it. So how can you invert that to make something that you find satisfying, like eating candy? How can you invert that to make it unsatisfying? Yeah, that's a good question. So there are a bunch of people trying to wrestle with this problem. So the Pavlok, Manish Sethi put this out, it's kind of like this little wristband that you wear. And if you do something you don't want to do, like if you visit Facebook or whatever, it can be linked to your actions online and it'll like zap you or shock you.

53:21So there's this immediate little bit of pain associated with the habit. So there have been like some solutions like that that people have come up with. But I think that probably the more widely applicable usage is, again, it comes back to some social norms. So accountability partners are a common one with this. If you want to go for a run each morning and you wake up and you realize, oh, I'm in my warm bed and it's cold outside. I don't really want to get up at 6 a.m. and go for this run now. There isn't a whole lot of pain associated with that. It's more just about the pleasure of being there.

53:54But if you had made an agreement with a friend early on yesterday or earlier in the week and said, hey, I'm going to meet you at the park at 6 a.m. Well, now suddenly there's an immediate punishment associated with that. You're a bad friend. You leave them stranded at the park at six in the morning. And so accountability partners can be very useful in that sense because they increase the pain associated with the task. You can also utilize what in the book I cover and call a commitment device. Commitment devices are sort of like one-time actions that make either the desired behavior easier or the undesired behavior more challenging.

54:29So the one of the stories that I gave in the book is about Victor Hugo, who is, you know, the famous author. And he had signed this book contract to write the Hunchback of Notre Dame. And he just he signed the deal, which probably resonates with writers everywhere. And he just didn't do anything for like a year. He hosted parties and went traveling and went out to eat and just generally procrastinated. And eventually his publisher got upset with him. It was like, listen, we have an ultimatum now. Like it has to be done in six months or we're canceling the book. and so he brought his assistant in and they packed up all his clothes and put him in a chest and then locked his clothes away and the only thing he was left with was this large like shawl or robe and so he basically didn't have any clothes that were fit for entertaining guests or traveling or going out on the town and so he kind of put himself on house arrest and effectively forced his hand and it ended up working he wrote all through the fall and winter and then actually ended up finishing the book about two weeks early.

55:27But if you use commitment devices like that, you make the behavior that you're more likely to fall into procrastination or something like that, less appealing. You make it more unsatisfying. You can imagine doing this with a bunch of technology solutions. Now there are companies like stick, uh, I think it's S T I C K K. I think there's two K's where B minder is another one. And these services, these companies allow you to place a bet and effectively just put that money like in a holding ground. And if you don't follow through, then the money will get donated to a charity that you hate or you'll lose the money or something like that.

56:00Those services are like a commitment device that makes it unsatisfying to follow through. I will say though, that in general for breaking a bad habit, I think it's more effective to intervene at the first stage, make it obvious, or in this case, make it invisible or at the third stage, make it difficult because you're trying to prevent the behavior before it occurs. If you wait until the fourth stage, you've already performed the bad habit. So it may help you to be less likely to fall into the next time if you have a negative consequence associated with it. But it doesn't actually prevent you from doing it this time because by the time you get to the fourth stage, the behavior is already done.

56:39So generally speaking, I think the first and the third stages are the best place to focus on eliminating a bad habit. In the example that you gave about commitment devices with Victor Hugo and how he essentially, as you said, put himself on house arrest so that he could write the book. Does the motivation for that have to come from inside of you? I'm thinking about the application of parents who would ground their kids to say, you know, you're not going out, you have to study. It would on the outside be the same thing as what Victor Hugo experienced. He can't throw parties, so he had to write.

57:08So does that internal motivation, is that what makes the difference? Yeah. So if you think about the stages that we talked about, that there needs to be some kind of prediction, or we could call that motivation or craving or desire in that second stage that precedes the behavior. If you're the teenage student that is grounded or whatever, prevented from going out, the parent has effectively increased the action or the friction, the difficulty associated with going out with your friends or not doing what you're supposed to do. And so it's impossible for you to do that behavior, but it doesn't necessarily make the action of studying or doing your homework or whatever it is more attractive.

57:48So we're kind of talking about like two separate behaviors. The one is preventing the bad habit of going out with your friends from the parent's eyes. And the other is instilling the good habit of studying. So you really need to kind of pull on both levers there. So you, yeah, it's fine. Like grounding them might make the bad habit less effective, but you also need a method for making it obvious and attractive and easy and satisfying to fall into the habit of studying. And so in a case like, again, the Victor Hugo example, how does the thing that you know that you need to do, whether that be writing or exercising or X, how can you make that more attractive if you find a lot of internal resistance to it?

58:29So sometimes it can be more attractive just in comparison to the other behavior. So for example, phones are a good one here that I've felt and experienced a lot myself. we're all, you know, hooked to our phones so much. I think the average adult checks their phone number 150 times a day now, and it goes up every year. We all just get more and more tied to them. But I've done a couple of things that have been interesting little experiments. So the first one was, and I still do this now, whenever possible, I leave my phone in another room until lunch each day. So I sort of get like this block of time for, you know, three or four hours in the morning where it's not there.

59:04It's just a few rooms away and up the stairs and, you know, out of my office. but it's interesting that I never go up to get it. It's like I, if it was on me, I would pull it out and check it, you know, a couple of times every few minutes or whatever. But when it's just a little bit more friction associated with task, I don't actually want to do it. And so many of the choices that we make are like that, where we just choose the most convenient or the most frictionless behavior in the moment. And so sometimes if you just increase the friction of the bad habit enough, the good one will kind of win out a little bit.

59:36Cause it's like, well, I really did want to write that article or to work on this project that I say is important to me. It just wasn't quite as convenient as the thing that was taking up my time and attention in its place. So sometimes it's just a comparison thing. And by shifting the scales a little bit, you can kind of slide more toward the good habit. The other thing you can do is you can increase the attractiveness and the satisfaction associated with the behavior. So, you know, we talked about temptation bundling and social norms. Those are two really effective ways to increase the attractiveness of a habit.

1:00:06We talked about reinforcements and habit tracking. Those are really effective ways to increase the satisfaction, the immediate satisfaction of a habit. The other thing that you can consider is timing. Many habits are attractive at a particular time of day, but not at another time. And this makes sense. You know, like if you're trying to build the habit of meditating and it's early in the morning and you have a couple of kids running around and getting dressed before school, like it's just not an attractive thing to do right then the house is crazy. You've got all kinds of other stuff to focus on.

1:00:35But if you ask yourself to do it in a different time, like maybe at, I don't know, 9 PM, everybody's asleep and it's just you. Well, maybe that's an easier time of day to build that habit. And so one thing you can do is sort of map out what are the different times throughout the day. You could just, if you do this, sometimes you only have to do it for maybe like a week and you just block out every day by hour. So eight to nine, nine to 10, 10 to 11 and so on. And then just keep like a little journal for a week of what your energy is like during that particular hour. So you're, you're effectively coming up with this energy journal.

1:01:05And then once you have that data after doing it for a week, you can look at the habits that you want to build and like kind of review what your week looks like and where is my energy appropriate or what time of day tends to be more reliable for building that habit. So when it comes to writing, I noticed that for a while I tried to write in the afternoon, but that was a really bad time for me. My energy was sagging a little bit and I usually get my best writing done earlier in the morning or later at night. So now I just, I don't think about that much. I schedule interviews for the afternoon. I do email in the afternoon and, uh, and I focus on writing either first thing in the morning or later in the evening.

1:01:43That's more about matching up the habit with the right time and energy for that behavior than necessarily making the behavior itself more attractive. But the end result is the same. James, one of the other concepts that you discuss in your book is in terms of layers of behavior change. You talk about outcomes, processes, and identity. We've touched a bit on identity, but can you articulate the difference between all of these and why that framework matters? Sure. So the key here, and the way I refer to it in the book is the difference between identity-based habits and outcome-based habits. And we live in a very outcome-oriented society.

1:02:16I mean, part of it's just the result of how society is designed. I mean, the news and social media are very results-focused or outcome - focused programs or services, you're never going to see a story that a news story that's like, man eats chicken and salad for lunch today. Like it's, it's not going to be a story until six months later when it's like, man loses a hundred pounds. And I think the consequence of that is that we, because we are inundated with results and never see the process behind things, we tend to overvalue results. The natural mode is for many people to build what I would call an outcome-based habit.

1:02:51So you, you think about the outcome you want, you know, I want to save X amount of dollars or I want to lose 20 pounds or whatever it is. And then you come up with a set of habits or a system or a process for achieving that. So it would be like outcomes of the outer layer of the onion and then the habits or the next layer in. But then I think there's a deeper layer of behavior change, which I'll call your identity. And these are kind of the beliefs or the sense of self-image that you have about yourself. That's sort of the inner layer of behavior change. And And most people start with the outcome, build the habits, and then let the identity kind of follow naturally.

1:03:24Instead, it's often more productive to focus on the opposite. It's not that any of those three levels are better or worse or not useful, but it's just the direction of change. It's often more useful to ask yourself, who is the type of person that I want to become? What is the type of identity I want to build? What habits can lead me to that identity? And then let the outcomes and results come naturally. Most people would say something like, all right, I want to lose 20 pounds. So that's the outcome. If I follow this diet, then i'll be skinny and lose 20 pounds and then whatever identity comes is just the one that comes They don't really think about it, but instead you could say Well, who is the type of person that could lose 20 pounds?

1:03:59Well, maybe it's the type of person who doesn't miss workouts. And so that's the identity you start there And then you say well, how do I become the type of person who doesn't miss workouts? Well, maybe then I focus on the habit of showing up at the gym and you know doing something even like that example I gave earlier of you know, just go to the gym for five minutes each day And then once you've built the habits and foster that identity, once you become that type of person, you can sort of let the outcomes come naturally. The power of this approach is that in many ways, true behavior change is really identity change.

1:04:29It's like it's one thing to say, I'm the type of person who wants this. It's something very different to say, I'm the type of person who is this. And once you have adopted a particular identity, you're not really even pursuing behavior change anymore. You're just acting in alignment with the type of person that you already think that you are. And so you have every reason in the world to show up again and to be that type of person day in and day out. This is also one of the perhaps the ultimate reason why habits really matter. You know, like in a in a sense, we often think about habits as the driver of external results.

1:05:03And it is true. Habits can help you lose weight or gain muscle or make more money or reduce stress. And all of those external outcomes are great, but they also are the path through which you reinforce your internal identity. You know, your habits are how you embody a particular identity. I mean, every time you make your bed, you embody the identity of someone who is neat and organized. every time you save for retirement you embody the identity of someone who is a saver every time you go to the gym you embody the identity of a fit person and so in that way it's sort of like every action you take is a vote for the type of person that you want to become and if you cast enough votes then eventually you kind of tip the scales and you build up like this evidence of your desired identity you start to actually believe it about yourself your your beliefs have something to root themselves in they have something a proof of it this i think is one of the reasons why small habits matter so much.

1:06:00It's, you know, like on any given day, you know, if you come home from work and you don't have much time, you're exhausted and you're like, well, I could do 10 pushups, but like, what does 10 pushups do? I'm not going to get in shape from that, which if you're focused on it from a results standpoint, if you're building outcome-based habits, it's easy to dismiss that. But if you're building identity-based habits, then doing 10 pushups, even on a day where you don't feel like it or the circumstances aren't ideal, that's still proof of your desired identity, of being a fit person. And so in this way, small habits can reinforce your identity and they're meaningful in that way.

1:06:33And if it's, if it's meaningful, then it actually is big, which is kind of the paradox of, of these small choices and these little 1 % improvements that we make each day is they, they feel like nothing, but they end up reinforcing the type of person that you are and ultimately shaping your beliefs about yourself. And, and I think that's one of the key things that habits provide to our, to us in our lives. So if you'd like to start a side hustle, identify as an entrepreneur. Start with the identity of I want to be an entrepreneur and then ask yourself, you know, who is the type of person that could have a successful side hustle or who is the type of person that could be an entrepreneur?

1:07:06And then it's like, well, maybe it's the type of person who makes three sales calls a day or something like that or one sales call a day. And then by doing that behavior, by sticking to that habit, you embody that identity and you cast those votes for being that type of person. Eventually, you have evidence of it. I mean, there's, there's a little different than, and I think a little more powerful than fake it till you make it, which people will throw that phase out phrase out there, but fake it till you make it is effectively asking yourself to believe something without having evidence for it.

1:07:37And there's a word for beliefs that don't have evidence. It's delusion. At some point it doesn't stick in your brain because you don't have anything to hold onto, but identity based habits are sort of the antithesis of that. By practicing the habit each day, you have this evidence to hold on to. And that helps you stick to the behavior in the long run, but also to believe that about yourself because you have actual proof of, you know, Hey, I did make sales calls every day for the last two weeks. So I'm being that type of person. And at some point as the evidence accumulates, so does the belief and you, uh, you end up seeing yourself in that way.

1:08:11James, thank you so much. Where can people find you if they would like to learn more? Sure. Yeah. Thank you again for the opportunity. So the book is called atomic habits and you can find it at atomichabits.com. In addition to the book being there, there are also a few additional resources and downloads. So there's a secret chapter that's not included in the book. There are some bonus chapters on how to apply the ideas to business and how to apply the ideas to parenting. There are some chapter by chapter audio commentary files for me on like why I wrote each chapter and some of the research behind it.

1:08:42And then a variety of worksheets and templates and guides. Anyway, all of that is available at atomichabits.com. Thank you so much. And And we will link to that in the show notes. And I'll say it's a fantastic book. So I highly recommend that everybody read this. Oh, thank you so much. I'm glad you enjoyed it.

1:09:01Thank you so much, James. What are some of the key takeaways that we got from this conversation? Well, number one, don't believe your own excuses that you tell yourself. Don't believe the stories that you tell yourself about your own behavior. because as we have learned, we are masters of rationalizing ourselves to ourself. And if we have formed a bad habit, it can be very easy to tell ourselves the story, I have to do X because of Y to justify that bad habit in our minds. Because oftentimes that bad habit does solve the problem that we're trying to solve, at least temporarily. And so it can be easy to cling to it, to stick with it and to justify it because it is solving the problem.

1:09:48But it's not the only thing that would. If you think about habits in this way, what you realize is that your habits are in many ways your learned solutions to the problems that you face repeatedly throughout life. So if you come home from work each day and you feel stress and exhausted, then that's a problem in a sense that you need to resolve. So maybe the cue is walking in from work and the craving is feeling stressed and anxious or tired and you want to change your state essentially. And so you can imagine a variety of different habits that could resolve that problem, that could resolve that craving.

1:10:23You could play video games for an hour and maybe that's a way or watch Netflix for an hour. You could smoke a cigarette. You could meditate for 10 minutes or go for a run. All of these are viable solutions to the same kind of fundamental problem. And so what you learn is that the habits that you have right now are not necessarily the optimal habits. Your original habit is not the optimal habit, not necessarily the optimal habit for solving that problem. So once you realize that, you start to wonder, well, how can I change my habits? Can I design this process rather than being the victim of it?

1:10:54Once we disconnect from the rationalizations and the stories that we tell ourselves about our own behavior, we then have the opportunity to become a much more active designer in the process of our behaviors in our lives. So that's key takeaway number one. Key takeaway number two, if you're trying to change a behavior, ask yourself not what that behavior is, but what outcome you are ultimately trying to achieve and then find some other way of achieving that same outcome. You don't really want to smoke a cigarette. What you want is to not feel stressed or to reduce anxiety. You don't really want to go to the gym.

1:11:34What you want is not the workout, but the result that the workout delivers. delivers. In this way, habits are often driven not by the behavior themselves, but by our prediction of what that behavior will give us. If you're trying to break a bad habit, it might be useful to ask yourself, hey, what do I really want? Do I really want a tub of ice cream or do I want some emotional soothing right now, some comfort? And if comfort is the thing that I want, is there a healthier alternative to getting there. That's key takeaway number two. Ask yourself what you're really after. Key takeaway number three.

1:12:12If you want to change an action, change the physical environment in which it takes place. For example, if you want to watch less TV, don't lay out all of your living room furniture in a way in which each piece looks at the TV. If you want to drink less alcohol, don't suggest to your friends that you guys meet up at a bar. Suggest somewhere different. Our environment is a huge driver of our behavior. So to change behavior, change environment. If you're constantly being exposed to those triggers, to those cues, then you have to resist and overcome that all the time. And you might be able to do it for a week, but to do it month after month is very hard.

1:12:54So in many cases, the most effective way to remove a bad habit is just to reduce exposure to the source. So that is that third key takeaway to change behavior, change environment. Key takeaway number four, what you do is a reflection or a vote on who you are. And so if you want to change some of the things that you do, change your fundamental understanding of who you yourself are. For example, if you identify as somebody who's part of the FIRE movement, then that sense of self-identity, that statement, that story that you tell yourself, we're kind of hearkening back to takeaway number one, which is don't believe every story that you tell yourself about yourself, but here's an instance in which it might be productive.

1:13:39If you tell yourself the story that I am somebody who's in the fire movement, then that is going to influence all of the downstream decisions that you make because now you have an identity, you have a story that you've told yourself that your actions will need to support. So I talk about this in chapter two of the book, this idea that I call identity-based habits, that you're essentially looking to foster this feeling that I am a certain type of person. And then your habit becomes the way that you embody that identity. So the goal is not to run a marathon, it's to become a runner. Or the goal is not to write a book, it's to become a writer.

1:14:16So the goal is not to invest, it's to become an investor. The goal is not to save. It's to become a saver or to become a frugal person or a minimalist. The goal is not simply to do a couple of projects that pick up some extra cash. It's to become an entrepreneur or a hustler. And the goal is not simply to build passive income. It's to become fire. It's to be part of the financial independence community. Identity is stronger than action. So lead with the identity and the actions will follow. Moving to key takeaway number five. Don't ever delay gratification. Instead, find a way to receive instant gratification from the thing that you want to do.

1:15:05If you have the attitude that dominant society teaches us that saving money is the equivalent of delaying gratification, then you're probably not going to stick with it because who wants to delay gratification indefinitely? But if you find inherent gratification in having an uncluttered home because you're a minimalist, so you don't really like buying stuff and bringing it into your house because that's just junk and clutter. Like if you find inherent gratification in that, then guess what? You're a lot more likely to stick with it because now you're no longer delaying gratification, you're reframing where that gratification comes from.

1:15:47The key challenge here when dealing with these habits of avoidance, like not spending money, is that behaviors like that are inherently unsatisfying. They're inherently not rewarding because it's like, well, all I'm doing is just resisting, you know, like I'm just not going to Starbucks or I'm just not eating out for dinner. And so you need to kind of flip this on its head and find a way to be satisfied in the moment. So that is key takeaway number five. Don't delay gratification, reframe gratification. Key takeaway number six, focus on the daily actions rather than the results. This is something that I've written about several times on my blog, affordanything.com.

1:16:29I've often written that instead of focusing on a goal, on an outcome-oriented goal, focus on the action that you'll take. So instead of focusing on the goal of I want to lose 20 pounds, focus on the goal of I want to go to the gym every single day this week or I want to not eat dessert for the next 30 days. Your actions are inside of your circle of influence. the results are not. So focus on the actions rather than the outcomes. You're never going to see a story, a news story, that's like, man eats chicken and salad for lunch today. It's not going to be a story until six months later when it's like, man loses 100 pounds.

1:17:16So those are six takeaways that we got from this conversation with James Clear. Welcome back. So everything that you just heard, originally aired in 2018, but this voice that you're hearing right now is me in the year 2025, wanting to welcome you back. Thank you for listening to this show. Don't you love James Clee? I love him. His ideas, and there's a reason, very, very well-deserved reason that Atomic Habits was such a mega number one runaway bestseller. His ideas around habit formation are time-tested, applicable to anyone and anything, any goal that you're trying to pursue. And isn't that why we listen to podcasts to become better people, to improve our lives, to be the best versions of ourselves?

1:18:04And all of that begins with habits. As he says, you don't rise to the level of your dreams, you fall to the level of your habits. And so there is nothing more foundational to all five pillars, to having a healthy relationship with money, to increasing your income, to being a better investor, to investing in real estate, or to starting a small business, right? There's nothing more foundational to all five pillars than learning the skill of dialing in great habits and breaking the habits that are holding you back. I hope you got as much value out of this as I did. Thank you so much for being part of the Afford Anything community.

1:18:44By the way, I did want to make one other announcement, which is there is somebody on Facebook who is impersonating me and who is DMing all of my followers. So please, please, if you receive a DM from quote unquote me, from somebody who is posing on social media as me, it is not me. Please be wary. There are a lot of scammers out there. There are a lot of impersonators out there. This doesn't just happen to me. Joe Salcihai from Stacking Benjamins was saying he was dealing with the same thing. I think most content creators in the personal finance space, particularly in the personal finance space, get impersonated a lot online.

1:19:21So please just know that I will never, ever, ever, ever initiate a DM with any of you. It's not that I don't want to talk to you. It's just that's a very clear way of being able to discern who's me and who's not. I will never initiate a DM. And I will definitely never ask you to take the conversation off of Facebook or Instagram and move it onto WhatsApp, which is what the scammer is doing. The reason that scammers often do that is because that way they are free of some of the oversight that Meta can provide if they can move the conversation to an encrypted service like WhatsApp or Telegram. So please know I will never initiate a DM and I will never ask to move the conversation to WhatsApp or Telegram or Signal.

1:20:10And if somebody, if a spammer does reach out to you, please, please report it to Facebook or Instagram. Please report it to Meta immediately. The more people that report it, the faster it gets taken down. Okay, sorry to end on that note, but we were talking just recently in a recent Q &A First Friday episode about this very topic, about impersonators. Then a few days later, theory became life. The very thing that we were talking about actually came into fruition. So remember that money management is not just asset growth, it's also asset protection. And that starts with developing situational awareness about online scams.

1:20:51Thank you for listening to my PSA. Please be safe out there. Please protect yourselves, and when in doubt, stay off of social media. And now you have the habit-building muscle to be able to do that. So thank you again for tuning in. Thank you for being part of this community. If you enjoyed today's episode, please share this with friends, family, neighbors, colleagues, with the people in your life, because that's the single most important way that you spread the message of FIIRE. Open your favorite podcast playing app and leave us a review. Make sure that you've hit the follow button so you don't miss any of our amazing upcoming episodes.

1:21:27And don't forget to subscribe to our newsletter at affordanything.com slash newsletter. That's affordanything.com slash newsletter. Actually, if you ever want to get a hold of me, just hit reply to any one of those newsletters. That's a surefire way to know that you're getting a hold of the real me and not some social media impersonator. So again, affordanything.com slash newsletter. And if you ever want to get a hold of me, just hit reply to any one of those. Thank you again for tuning in. This is the Afford Anything Podcast. My name is Paula Pan. And I'll meet you in the next episode.