Summary

Be systems-oriented, not goal-oriented by picturing who you want to become and forming identity-based habits around that which form the compound interest of self-improvement. Follow the 4 rules of behavior change: cue (obvious), craving (attractive), response (easy), reward (satisfying).

Key Takeaways

• Be systems-oriented and focus on habits / systems, not achievement of goals and current results
• Build identity-based habits
• Optimize environment to reduce need for willpower, manage cues
• Get reps in (action) rather than finding perfect way (motion). Use the 2-minute rule
• Exploit explore trade off: exploit while winning, explore while losing (80-90% exploit, 10-20% explore)

“Your personal experiences make up maybe 0.00000001% of what’s happened in the world but maybe 80% of how you think the world works. We’re all biased to our own personal history.”
- Morgan Housel

Notes

The fundamentals

• “You should be far more concerned with your current trajectory than your current results” (focus on habits, not results)
• “Time magnifies the margin between success and failure”
• Plateau of latent potential: Habit formation is occurring but results aren’t showing yet
• “Change can take forever until it happens all at once” (in reference to ↑)
• Systems vs goals: Systems are the processes that lead to meeting the goals
• ↑ Be systems oriented, not goal oriented
• 3 levels of change: Outcomes / goals, systems / process / habit, identity / beliefs
• Identity-based habits: Determine who you want to be, then build habits around that desired identity
  • eg. What would a fit person do?
• Cue, craving, response / routine, reward
• 4 laws of habit building:
  • Cue: make it obvious
  • Craving: make it attractive
  • Response: make it easy
  • Reward: make it satisfying
• To break bad ones, invert any / all of ↑

Law 1: Cue - Make it obvious

• Time and location are most effective cue
• Stacking: Stack a desired habit on top of something you already do
• Make good cues physically obvious
• Have separate environments for diff habit groups (eg. bed, work desk, kitchen eat)
• Key to high willpower / good habit forming: optimize your environment

Law 2: Craving - Make it attractive

• Dopamine response in anticipation of pleasure, gets us to take action
• Temptation bundling: desired new habit + something you enjoy (Netflix + workout)
• We imitate actions from those around us
• 3 groups: the close, the many, the powerful
• The close: surround yourself with people who have the habits you want to have
• The group: tremendous internal pressure to comply with the group, “think different”
• The powerful: imitate people we envy
• Craving: sense that something is missing, desire to change internal state
• Reframe habits to highlight their benefits rather than their drawbacks

Law 3: Response - Make is easy

• Motion vs action: Making plans / preparing vs actually doing desired action
• Get reps in rather than finding perfect way
• Law of least effort: Perform action that maximizes reward for effort
• Make desired habits the path of least effort
• The 2-minute rule
• Commitment device: decisions you make now that bind you to a future behavior

Law 4: Reward - Make it satisfying

• Delayed-return environment: our brains are evolved for an immediate-return env
• Habits need immediate returns / rewards to be satisfying
• Many habits don’t have an immediate reward so institute one
  • eg. Not eating out → money in jar
• Track your habits (visual: paperclip method)
• Never miss 2 in a row (new habit)
• Goodheart’s law: when measure becomes a target, ceases to become a good measure
• Create a habit contract - institute consequence / cost for not meeting habit

Advanced tactics

• Choose habits that match your physical and mental traits, interests
• Exploit explore trade off: exploit while winning, explore while losing
  • 80-90% exploit, 10-20% explore
• Find combos of skills / rewrite the rules
• Goldilocks rule: peak motivation when task difficulty is on edge of abilities (flow state)
• Best people stick with habits even during boring periods, fall in love with boredom
• Review your habits periodically
• To avoid losing part of identity, make sure it’s not tied to current role / time