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Afford Anything | Make Smart Money Choices
[GREATEST HITS] James Clear: How Small Daily Actions Compound Into Life-Changing Wealth [RERUN]
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- [00:00]
Paula Pant
Today we're bringing back one of our most popular episodes, my conversation with James Clear about atomic habits. In this conversation, he shares strategies that will transform the way that you approach any goal that you set, whether it's make more money, spend less, buy a rental property, be more attentive to your investments, whatever goals it is that you have. Habits are the foundational building block. No one is better at breaking down those building blocks to their most atomic level, their most, smallest, most foundational level. No one is better at that than James Clear. Welcome to the Afford Anything podcast, the show that knows you can afford anything, not everything. This show covers five pillars. Financial psychology, increasing your income, investing, real estate, and entrepreneurship. It's double I fire. I'm your host, Paula Pant. I'm sharing an episode today that Originally aired in 2018. This is from our greatest hits Vault. So if you discovered this podcast after 2018, you likely have never heard this conversation. And if you were listening back then, first of all, thank you for being such a longtime listener. And second of all, you heard this seven years ago when you were dealing with completely different life circumstances. You were a completely different person seven years ago. And the habits that served you in 2018 and the challenges that you were dealing with back then might be completely different today because today's goals require different systems. So whether you're a longtime listener or whether you've just discovered us, I think you're going to get a lot of value. From this conversation, James reveals a four stage cycle that drives every behavior that you do, from checking your phone to saving money, and talks through this four stage cycle to show you how to interrupt this cycle in order to build the habits that you want and and eliminate the habits that are sabotaging your progress. These are not just feel good platitudes. These are well tested, well honed, strategies that work no matter what your goal is. You want to exercise more consistently, you want to save more money, you want to floss, you want to start that side business. Whatever it is that you want to do consistently, this episode will help. So let's dive right in. Here he is, James Clear.
- [02:19]
Host/Interviewer
Hey, James.
- [02:20]
James Clear
Hey. Thanks so much for having me. It's good to talk to you again.
- [02:22]
Host/Interviewer
It's great to connect with you again. So let's dive right into all of the information in your book because it's action packed. I want to talk about you. Create a great framework around how to create good habits. Make it obvious, make it attractive, make it easy, make it satisfying.
- [02:38]
Paula Pant
Let's walk through these.
- [02:40]
Host/Interviewer
First of all, before we get into how to execute these, where did this framework come from?
- [02:45]
James Clear
Yeah, so this book, Atomic Habits, is about how to build good habits and break bad ones. And in order to do that, I needed to understand how habits work. If you think about it, a habit is just a behavior that has been repeated a lot of the time, enough times to become more or less automatic. And so if you want to understand how habits work, you need to understand from a high level how human behavior works. So I break it into these four stages. And some of these terms may be familiar to readers who have either a psychology background or have read books like the Power of Habit. But there are some slight changes, based on the last decade of research or so, especially from neuroscientists, that one of the leading theories right now of how the brain works is called predictive processing. And so that played a role. And there's also, interestingly, a great body of research that has been overlooked from the 1930s, 1940s, and psychologists were kind of toying with these ideas that I'm about to lay out, but they didn't really understand the inner workings of the mind and how they actually came to fruition. So I have the benefit of an additional 60 years of research, or 80 years of research here to look at and think about how this all fits together. But the basic idea here is that there are four stages that any behavior goes through. The first stage is what we can call a cue. And this is like a bit of information or some raw data in your environment, either internal or external, that gets your attention. Basically, it's like the raw input. So many of the cues that are in our life are visual. So the, you know, one example I give off, and let's say you walk into a kitchen and you see a plate of cookies. So in that case, it's a visual cue. This could be any of the senses, but vision is often the way that it manifests itself. So you see some type of cue. The second stage is the craving. And we could describe the craving as sort of your internal interpretation of the cue. So it's based on your past experiences. So what that cue has meant in the past and your current state. And then you kind of make this internal interpretation of what that cue means and what you should do next.
- [04:45]
Host/Interviewer
Right. You gave the example of cigarette smoke. And that interpretation of that cue to one person might mean I want it, and to another might mean ew.
- [04:53]
James Clear
Exactly. So cue the craving. And this is the predictive processing part. And what distinguishes my four stage model from a lot of Other models of human behavior is that this prediction is really a key thing that determines how you respond. You, as you just said, you can imagine, you know, one person sees a pack of cigarettes on the table, and that means, oh, you know, I have this craving. I should smoke. And another person sees a pack of cigarettes and is like, oh, I don't want to smoke at all. Gross. So you can just as easily imagine the same person having a different response to the cue based on their current state. So you walk into the kitchen and you see that. And if you're hungry, your current state is saying, yeah, you should go ahead and pick that up. It'll be tasty, it'll be sugary, it'll be good. But if you just finished eating a huge meal in the other room, or you had like, you know, three cookies after dinner, and then you walk into the kitchen and see another plate of cookies there, well, then you might think, oh, I'm stuffed. I don't want to eat anything. So your interpretation can change based on your current state. It can change based on your beliefs. You know, so you can imagine the same news story runs on the television, and a conservative watches it and a liberal watches it, and they come to two very different conclusions about how they should respond based on how they. The filter that they run that cue through. So you have the cue, then you have the craving. And that prediction. You know, we kind of, a lot of the time, we feel like life is reactive, but it's sort of endlessly predictive. We're endlessly predicting what we're looking at, what we're experiencing in the moment, and how we should respond to it. So the craving, the prediction leads to a response which is the actual behavior or habit that you perform, and then that habit or that behavior delivers some kind of result which we could call the reward. Because if it is rewarding, if it serves you in some way, then two things happen. The first is that the reward resolves the craving that you had. So if you see that cookie and you think, this is going to be tasty, I should eat it, then eating it resolves a little bit of that hunger and satisfies the prediction that you made. And the second thing is that if an experience is rewarding, then you have a reason to repeat it again in the future. So it's followed by sort of this, like, positive emotional signal that says, hey, that felt good. You should do this again when the circumstances are similar. And so in that way, the reward sort of closes the feedback loop, and you end up with these four Stages of cue, craving, response, reward. Cue, craving, response, reward. And as you repeat them enough times, your response becomes more or less automatic. And what we're really describing here is the process of learning, the process of learning how to respond to different situations and problems that we face. 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, you know, 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. You 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? And that's kind of where the four laws come into play. And they give us sort of a. A set of behavioral guides for adjusting our habits and building better ones.
- [08:35]
Host/Interviewer
And that was one of the many insightful things that you said in your book, is that oftentimes when we perform a habit, it's not the habit itself that we want. It's the feeling we derive from that habit. So we don't want to journal. We want to think more clearly.
- [08:49]
James Clear
Yeah, I think that's right. So the way to consider this would be breaking into the stages. What we want is to resolve the craving, to resolve the prediction or the desire that you have before the habit. You know, like, you don't want. 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. What you want is not the workout, but the result that the workout delivers. In this way, habits are often driven not by the behavior themselves, but by our prediction of what that behavior will give us. And so if you can either learn to change the prediction or if you can figure out how to deliver A more immediate reward, Then you have a reason to repeat the habit in the future.
- [09:30]
Host/Interviewer
And that's what you mean by predictive processing.
- [09:32]
James Clear
Right. So those four stages are how a habit works. And from those four stages, we can come up with four laws of behavior change for each stage. So for cue, you want to make it obvious. For the craving, you want to make it attractive. For the response, you want to make it easy. And for the reward, you want to make it satisfying. And if you would like to break a bad habit instead of foster or build a good habit, you simply invert each of those laws. So the inversion of the first law is to make it invisible instead of make it obvious. The inversion of the second law is to make it unattractive, make it difficult, and then make it unsatisfying. And you can sort of think of those four laws kind of like levers or tools in a toolbox that you can pull out based on the current situation or circumstance that you face. Which levers to pull depend on what the bottleneck is for that particular habit or situation.
- [10:19]
Host/Interviewer
So let's walk through how to do that, and let's start with that first law in terms of how to deal with cues. Make it obvious if you want to create a good habit, make it invisible.
- [10:28]
Paula Pant
To break a bad habit.
- [10:30]
James Clear
Sure. So let me give you an example of each. So for a long time, I would brush my teeth twice a day, But I wouldn't floss consistently. And so in this case, I'm looking to build a good habit. And I basically did two things. The first was to kind of map out the chain of behaviors that I needed to perform for that habit. And so you can do this for any habit. At first I realized, okay, I need to take the floss out of the drawer, and then I need to wrap it around my fingers, Then floss my teeth and then throw it out. And so if you kind of break it down to that granular level, I realized, well, one problem is the floss is inside the drawer in the bathroom. Sometimes I just don't see it. It's not obvious. And so I bought a little bowl. And then the second thing that I realized was that it sounds silly, but I didn't like the feeling of wrapping the floss around my fingers. It was just kind of like uncomfortable. So I bought some of the pre made flossers and I put it in a bowl and put the bowl right next to my toothbrush. So finish brushing my teeth, put the toothbrush down, pick a flosser up, floss my teeth, and Then you're done. Essentially, I was just making that habit more obvious and then also employing the third law, make it easy so that I could build that habit. And that was pretty much all that I had to do to create that. So in many cases, make it obvious is an environment design change. And you can apply the same thing for breaking a bad habit, but then, of course, just invert it. So take a bad habit like, I don't know, watching too much TV or playing too many video games or just too much screen time. If you walk into pretty much any living room, where do all the couches and chairs face? They all face the television. So it's like, what is that room designed to get you to do? So you can take a variety of steps here. You could make television watching less obvious by taking the remote and putting it inside a drawer in the coffee table or something like that. You could take the television and put it behind a set of cabinet doors or inside a wall unit so you're less likely to see it. Take the video game controllers and move them from the middle of the floor and put those in a drawer. You could also increase the friction associated with the task. So, you know, if you wanted, you could unplug the TV after each use and then only plug it back in if you can say the name of the show that you want to watch. So, like, no, mindlessly just pulling up Netflix and like, finding something. Similarly, you could take the batteries out of the remote control. That maybe adds, like an extra five or 10 seconds to the process of powering the TV on. And maybe that's enough time for you to realize, I don't really want to watch something right now. I'm just doing this out of habit. And then, you know, if you really wanted to be extreme, you could take the television off the wall, put it in the closet, and only take it out if you really wanted to watch something. But the general point here for make it obvious, is that you want to reduce the steps between you and the good habits and increase the steps between you and your bad habits. You're essentially looking to make your good habits as obvious as possible. You know, if you want to practice violin, put the violin right in the middle of the living room so you see it all the time and not tucked away in the corner or something like that. And if you want to break a bad habit, then you want to make it invisible. You want to remove it from your environment and reduce your exposure to that cue.
- [13:16]
Paula Pant
Absolutely.
- [13:17]
Host/Interviewer
Another thing you could do is rearrange your living room furniture. Such that two couches face each other so that looking at a television is physically less comfortable than looking at the companions who are in your living room with you.
- [13:28]
James Clear
Right. Foster those social relationships. And there are a bunch of ways to apply this to purchasing and budgeting and money. You know, I mean, you could imagine, like, if you find that you're spending too much money on technology or whatever the latest electronics gadget is, well, then don't follow, like, all the latest tech review blogs. Or if you want to reduce the amount of money that you're spending eating out, like, don't follow your favorite restaurants on Instagram or your favorite food blogs if you're spending too much money on desserts or things like that. 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. So in many cases, the most effective way to remove a bad habit is just to reduce exposure to the source and then sort of, you know, effectively, those four stages never get rolling in the first place.
- [14:14]
Host/Interviewer
One of the things jumping back to your flossing example, one of the things that I hear within that example is that you also used habit stacking in order to form the flossing example, since you tied it to when you brush your teeth.
- [14:26]
James Clear
Yeah. Good job picking up on that.
- [14:27]
Paula Pant
Oh, of course.
- [14:29]
Host/Interviewer
Thank you.
- [14:29]
James Clear
So habit stacking is this idea that you can make a habit more obvious by tying it to a behavior that you already perform. So, as you very rightly noted, I said, okay, after I brush my teeth, then I will floss my teeth. Or you could say, in the morning, after I make my cup of coffee, I will meditate for 60 seconds. Or you can also use this to insert a new routine into your behavior. So say you want to read more books. You could say, all right, in the morning, my typical routine is, I wake up, I make my bed, and take a shower. But you could sort of insert that new behavior into that stack of habits by saying, I wake up, I make my bed, I place a book on my pillow, then I take a shower. Then when you get in bed at night, there's kind of a book waiting there for you to read. And the idea here is that it's easier to remember when to do a habit. It's more obvious to you when to act if you have a very clear place to tie it to in your daily life. And in many cases, that is a very helpful way to do it is by linking your new habit to an old one.
- [15:31]
Host/Interviewer
James, you've traveled a lot. How do you modify habit stacking to a lifestyle that involves a lot of frequent travel in which your morning routine might be, I wake up, I grab my passport, I catch a flight, but then the next four days I'm here, and then all of a sudden I'm in Istanbul.
- [15:47]
James Clear
Right. In many cases, habits, what they thrive on is stability and context. And so people often find it hard to build habits when they're on the road or when they're traveling, because, as you just mentioned, the context is always changing. And you actually see this in a lot of ways with habits that people build naturally without thinking about it. You sort of, rather than thinking about your environment as filled with things, you can think of it as being filled with relationships. And you gradually, you kind of develop this relationship with the overall context of the environment. So for one person, the couch in their living room might be where they read every night, and for another person, it might be where they eat a bowl of ice cream and watch television. And it's more about the relationship you have with that context than with the particular item itself. Well, you can do something kind of similar when you're traveling a lot or when you're always changing context. But the key is to tie the habit or to create the habit stack such that it's linked to a particular part of the experience that you repeat, because the experience might be repeated, but the context will be different. So for example, maybe you'd say something like, all right, I'm traveling a lot, so it means I'm checking into a lot of hotels. So the habit stack might be after I walk into the hotel room, I will put my luggage on the bed or on the luggage rack. After I put my luggage on the luggage rack, I will do 10 push ups. Or after I check into the hotel, I will go to the bathroom. After I go to the bathroom, I will look up the location of the local grocery store so that I know, like where to go to buy healthier food rather than just eating out or something like that. And so you essentially look for a part of the experience that you repeat, even if the context changes. And then you try to link the habit to that.
- [17:27]
Host/Interviewer
That makes a lot of sense. I mean, no matter where you are, you're always going to be going to the bathroom multiple times a day. Why not tie some good habit to that?
- [17:35]
James Clear
Right? You're essentially just looking for what is the stable part of the process. What is the thing that you can actually Rely on being repeated again and again. And if you can do that, and if you make the habit small enough, you know, that's another key here. I talk about in the book this idea of the two minute rule where you take whatever habit you're trying to build and you scale it down to just two minutes. The idea there is you want it to be two minutes or less so that it's something you can actually insert. And that's particularly useful if the context is changing because you can't always predict what kind of circumstances you're going to come across or how much time or resources you'll have available. But if the behavior is small enough that you can do it 98% of the time without fail, then it's much more likely you'll be able to make it stick.
- [18:14]
Host/Interviewer
Moving to the second law, can you talk about temptation bundling?
- [18:18]
James Clear
Sure. So the second law of behavior change is to make it attractive. There are a variety of ways to do this. The idea here, remember we've already talked a little bit about this prediction that precedes every response or every behavior. And so this, this craving that you feel to either take an action or to not take an action to stay in your current state or to change your state. Temptation bundling is a way of making a habit that is not really that attractive, a little more attractive, or giving you an additional incentive to perform the behavior. So most recently, this has come out of research from Katie Milkman at the Wharton School, University of Pennsylvania. But it's also sort of an application of a psychology theory known as Premax Principle. The basic idea is you take something that you need to do, the habit that you need to build. So like exercising or meditating or budgeting or whatever it is the thing that you kind of struggle to stick with, and then you pair it with something that you want to do. Let's say, like going to your favorite restaurant, and you say, all right, I will only go to my favorite restaurant if I map out my monthly budget while I'm there. And so you effectively increase the desire or the attractiveness of the habit of budgeting, because it means that you get to eat your favorite meal as well. The same idea can be applied with many different contexts. Milkman, the researcher that I mentioned who kind of coined this term, she really liked the series, the Hunger Games books, but she realized that she needed to work out more. And so she set this rule for herself where she was only allowed to read the Hunger Games if she was at the gym and, like running on the treadmill or Whatever. And so the idea there, of course, is just to increase the attractiveness of the behavior by layering something you want to do with something you need to do.
- [19:54]
Host/Interviewer
Are you familiar with the slightly opposing body of research that states that if you tie an unrelated external reward to something, such as, if I go running, I can eat this cupcake. That takes away from your motivation to actually go on the run. This is something that I've heard from Gretchen Rubin that enjoying the intrinsic act of running is more effective than tying the run to the cupcake.
- [20:19]
James Clear
So I think the issue here is looking at a particular time scale in the long run. That is true. 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. And once you adopt that particular identity, well, then each time you do that action, you're reinforcing that. You have a reason to repeat it in the moment, because that's just the type of person that you are. And I think that's ultimately what Gretchen is referencing there. But the challenge is, early on, there's sort of this valley of death that people often experience in the beginning because you can sort of think about your habits as. It's kind of like every action you take is a vote for the type of person that you believe that you are. And so when you cast these votes, you're building up evidence of being a particular type of person. But early on, let's say the first time that you sit down to write a sentence, you might not think of yourself as an author, but if you sit down every day and write a little bit, then at some point you cross this imaginary threshold. Maybe it's six months in or a year in or whenever, where you're like, yeah, I'm the type of person who writes every day. That's part of my identity. But it takes a little while for those rewards to come through. And this is additionally difficult because for many habits, it's sort of this in the book I refer to as the plateau of latent potential. But it's like we think that we should put in a little bit of effort and get a little bit of result, that there should be like this linear relationship with effort and results. But your habits don't really add up like that, they kind of compound more. And the hallmark of any compounding process, as anybody interested in finance can tell you, is that the most powerful outcome outcomes are delayed. And so there's sort of this period in the beginning where you're. You're putting in this effort, but you're not really seeing much results for it. Well, I mean, what is the reward for going to the gym for a week or even a month? You know, in many cases, the scale hasn't really changed. Your body doesn't really look that much different in the mirror. It's not until you make these small choices, these 1% improvements or 1% declines, and let them compound over two or five or 10 years that you really start to see the full effects of your habits become apparent. And so you need a reason to repeat that in the moment. Now, coming back to your example of, oh, I work out, but then I reward myself with a pint of ice cream or a brownie or something like that. I think the key is external reinforcers can be very effective. And this shown in a variety of research. There's a book called the Power of Reinforcement. It's written by a professor, I think, at Sunny College in New York. Anyway, he gives tons of examples. I mean, we actually use so many reinforcements that we're blind to them on many given days. Like, your paycheck is a reinforcement that gets you to show up at your job. There are many examples of reinforcements being effective, but I think the key is that you want the external reinforcer to align with the internal identity that you're trying to build. So if you're. If you're going to the gym and then you eat a pint of ice cream, well, it's kind of like the two votes wash each other out, you know, like, are you a healthy person or not? And so if you can find other ways to reinforce that identity. And this is, I think, important finance as well. You know, in many cases, people will say, well, the reward for me saving or something like that is buying a leather jacket. Well, that doesn't really make sense. Right. Like, 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.
- [23:57]
Host/Interviewer
Mm, that makes a lot of sense. The reward for running then would be getting a nicer pair of running shoes.
- [24:03]
James Clear
Sure. Well, or it could Be something like that could be getting, like, 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. It depends on the different goals that you have. But there are often ways to find those two that support each other.
- [24:19]
Host/Interviewer
Now, how does temptation bundling tie in with creating a motivation ritual?
- [24:24]
James Clear
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. And so coaches are always saying something like, all right, you got to find a way to be motivated today. Got to find a way to be, you know, 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. 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? Like, 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 Lattimore, 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 realized one day that he put his headphones on, but he forgot to turn the music on. He just, like, immediately went into writing, and he was like, whoa, 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.
- [26:22]
Paula Pant
So if you've been looking at my Instagram stories lately, you have noticed that I've been reconnecting with the kinds of books that I used to read when I was like 8 to 10 years old. Specifically, I'm thinking about the Goosebumps series by R.L. stine. And the reason I reconnected with this is because I watched R.L. stine teach a class about writing on Masterclass and it made me want to go back and reread the books. With a new appreciation for the craft, Masterclass really opens your eyes. And with plans starting at $10 a month billed annually, you get unlimited access to over 200 classes taught by the world's best business leaders, writers, chefs, and more. You can learn from current and former CEOs like Bob Iger and Howard Schultz. You'll access thousands of bite sized lessons across 13 categories that can fit into even the busiest of schedules. And 83% of surveyed members have applied something they've learned from Masterclass to their lives. Plus, every new membership has a 30 day money back guarantee. Right now, our listeners get an additional 15% off any annual membership@masterclass.com afford. That's 15% off@masterclass.com afford masterclass.com afford hey folks, let me ask you a serious question. Did you know that driving high is considered driving under the influence? That's right. Driving under the influence of marijuana is against the law in every state. That means even in states where marijuana is legal, that means driving high could get you a dui. And if you think law enforcement officers can't tell when you're driving high, well my friend, you're wrong. If you're high, they can tell. Your friends can tell. Your co workers can tell. Even your parents can tell. Everyone can tell. What makes you think that law enforcement officers don't know when you're driving high, you'd be wrong. They can tell too. Driving under the influence of marijuana can slow your response time and change how you perceive time and speed. So even if you think you're fine to drive when you're high, you're not. The bottom line is if you feel different, you drive different. And driving high is driving under the influence. So remember, drive high. Get a DUI Paid for by NHTSA.
- [28:55]
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- [29:42]
Host/Interviewer
How 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, you don't do it 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.
- [30:13]
James Clear
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? So 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. One, 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 Behaviors 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. This 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 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. So 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. It'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.
- [33:59]
Host/Interviewer
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.
- [34:10]
James Clear
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. Society leans heavily on us all. You know, like, 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 expect it 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. People will be like, well, I really want to save more, but all my friends are going out to eat. 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 you. If you don't, you feel like you'll lose your friends. And 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.
- [36:18]
Paula Pant
Let's talk about the third law.
- [36:20]
Host/Interviewer
To create a good habit, make it easy, and to break a bad habit, make it more difficult.
- [36:24]
James Clear
Sure. So this is largely about the amount of friction that is associated with a 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 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. And 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.
- [37:13]
Host/Interviewer
Fantastic analogy, by the way, was one of my favorites.
- [37:16]
James Clear
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, we've all heard this idea like, oh, you should start with small steps. But 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. One way to do this is to practice this method that I referred to earlier, which I call the two minute rule. And I had a reader who did something similar. So he, he ended up losing over £100. 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. 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 weeks and then they fade out and then the process repeats itself 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 logistical details associated with building a better habit that most people never think about in the beginning. I mean, we're very results oriented or outcome oriented. And so we think about things like, all right, I want to lose £20, 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? Are 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 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. Then if you do that, you have.
- [40:20]
Host/Interviewer
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.
- [40:39]
Paula Pant
Do you square that with the fact.
- [40:42]
Host/Interviewer
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.
- [40:53]
James Clear
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. So, 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, 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. But 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 they're like 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. But when they surveyed people who had been there for a while, a few months or a couple 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 result 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 the habit. In the long run.
- [43:02]
Host/Interviewer
What 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?
- [43:12]
James Clear
It's a great question. Thankfully, we live in an era where the Internet exists, so we have a couple options. You know, 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. School and hoped that they would have the, you know, 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. So social media in particular is a key one. 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. 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, 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. So 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 of 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 in a social sense. So if you, if you have your television, 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. And so you're 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. So 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 is 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 stick is that the key part is not. 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. For example, Steve Kam 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. So 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.
- [47:49]
Host/Interviewer
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.
- [47:57]
James Clear
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, they also practice yoga and get to hang out with the animals they love.
- [48:14]
Paula Pant
You know, as kids we have all of these big dreams and ambitions, right? To be an astronaut or to be an actor. As we mature a little, we ask the question, what skills and talents do I have that I can share with the world? Right? It's less about what do I want to do? I mean, that's important too. But it's also what can I contribute? What can I give? How can I make a positive impact? One major way to do that is by owning your own business or running some type of an organization. It could be a nonprofit or it could be a social enterprise. Whatever it looks like for you, you're gonna need a website and a payment system and a logo and branding and a way to advertise to customers. You're gonna need all of the infrastructure that comes with taking on this project. That's going to be the way that you contribute to the world. That's where today's sponsor Shopify comes in. Shopify is the commerce platform behind millions of businesses around the world and 10% of all e commerce in the US from household names like Mattel and Gymshark to brands that are just getting started. So if you need to design a website, they've got beautiful ready to go templates. If you need help enhancing product images or writing product descriptions or generating discount codes, Shopify's AI tools can help you do that. They can help you find customers with easy to run email and social media campaigns. And they have award winning 24. 7 customer support. So turn those dreams into and give them the best shot at success with Shopify. Sign up for your one month $1 per month trial period and start selling today at shopify.com Paula go to shopify.com Paula shopify.com Paula hey, it's Ryan Reynolds.
- [49:49]
James Clear
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- [50:10]
Paula Pant
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- [51:11]
Paula Pant
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- [51:26]
Host/Interviewer
So let's talk about the fourth law.
- [51:28]
James Clear
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. And 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. An 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. But 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.
- [53:29]
Host/Interviewer
Right?
- [53:29]
Paula Pant
That was the famous example with Febreze.
- [53:31]
Host/Interviewer
From Charles Duhigg's book, where adding artificially adding in a scent to Febreze, even though it wasn't necessary, created a positive emotional signal that reinforced the behavior of spraying it.
- [53:42]
James Clear
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. It wasn't until they added the scent that it was a satisfying experience and they had a reason to repeat it.
- [53:52]
Host/Interviewer
So how can you invert that to make something, something that you find satisfying, like eating candy? How can you invert that to make it unsatisfying?
- [54:00]
James Clear
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. So 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 I'm in my warm bed and it's cold outside, I don't really want to get up at 6am 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. But 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 6am, well now suddenly there's an immediate punishment associated with that. You're a bad friend, you leave them stranded at the park at 6 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. So one of the stories that I gave in the book is about Victor Hugo, who is the famous author and he had signed this book contract to write the Hunchback of Notre Dame. And 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, 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 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. But 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 Stickk, I think it's S T I C K K, I think there's two Ks, or Beeminder 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. Those 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. So generally speaking, I think the first and the third stages are the best place to focus on eliminating a bad habit.
- [57:41]
Host/Interviewer
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. So does that internal motivation, is that what makes the difference?
- [58:09]
James Clear
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. So we're kind of talking about two separate behaviors. The one is preventing the bad habits of going out with your friends from the parents 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.
- [59:10]
Host/Interviewer
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?
- [59:26]
James Clear
So 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 hooked to our phones so much. I think the average adult checks their phone number 150 times a day now. And it goes, goes up every year. We all just get more and more tied to them. But I've done a couple 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 three or four hours in the morning where it's not there, it'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 if it was on me, I would pull it out and check it a couple 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 because 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 that 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. We 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 kids running around 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. But if you ask yourself to do it at a different time, like maybe at, I don't know, 9pm 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 8 to 9, 9 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 effectively coming up with this energy journal. And 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 it that much. I schedule interviews for the afternoon. I do email in the afternoon, and I focus on writing either first thing in the morning or later in the evening. That'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.
- [62:49]
Host/Interviewer
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?
- [63:02]
James Clear
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, we live in a very outcome oriented society. I mean, this is part of, it's just the result of how society is designed. I mean, you know, 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 not going to be a story until six months later when it's like man loses £100. 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. So 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 are the outer layer of the onion and then the habits are 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 most people start with the outcome, build the habits, and then let the identity kind of follow naturally instead. 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? Well, 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. It'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. In a sense. We often think about habits as the driver of external results. And 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. 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 proof of it. This, I think, is one of the reasons why small habits matter so much. It's, you know, like on any given day, you know, if you come home from work and you don't have much time or 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 result 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 push ups, 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. And if it's, if it's meaningful, then it actually is big. Which is kind of the paradox of these small choices and these little 1% improvements that we make each day is they feel like nothing, but they end up reinforcing the type of person that you are and ultimately shaping your beliefs about yourself. And I think that's one of the key things that habits provide to us in our lives. Lives.
- [67:50]
Paula Pant
So if you'd like to start a.
- [67:51]
Host/Interviewer
Side hustle, identify as an entrepreneur.
- [67:54]
James Clear
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? And 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, this is a little different than, and I think a little more powerful than fake it till you make it, which people will throw that phrase out there, but fake it till you make it is effectively asking yourself to believe something without having evidence for it. And 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, you end up seeing yourself in that way.
- [69:07]
Paula Pant
James thank you so much. Where can people find you if they would like to learn more?
- [69:11]
James Clear
Sure. Yeah. Thank you again for the opportunity. So the book is called Atomic Habits and you can find it@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 and then a variety of worksheets and templates and guides. Anyway, all of that is available@atomichabits.com thank you so much.
- [69:46]
Paula Pant
And we will link to that in.
- [69:47]
Host/Interviewer
The show notes and I'll say it's a fantastic book. So I highly recommend that everybody read this.
- [69:52]
James Clear
Oh thank you so much. I'm glad you enjoyed it.
- [69:57]
Paula Pant
Thank 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 your 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. But it's not the only thing that would.
- [70:47]
James Clear
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 stressed 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. You 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?
- [71:51]
Paula Pant
Once 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.
- [72:23]
James Clear
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. What you want is not the workout, but the result that the workout delivers. In this way, habits are often driven not by the behavior themselves, but by our prediction of what that behavior will give us.
- [72:43]
Paula Pant
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. If 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.
- [73:40]
James Clear
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. So in many cases, the most effective way to remove a bad habit is just to reduce exposure to the source.
- [73:57]
Paula Pant
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, or kind of harkening 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. If 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.
- [74:53]
James Clear
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, you know, 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.
- [75:12]
Paula Pant
So 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. Right? Moving to key takeaway number five. Don't ever delay gratification. Instead, find a way to restore, receive instant gratification from the thing that you want to do. If 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.
- [76:44]
James Clear
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.
- [77:08]
Paula Pant
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, i'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.
- [78:02]
James Clear
You're never going to see a story that is a news story that's like, man eats chicken and salad for lunch today. Like, it's not going to be a story until six months later when it's like man loses 100 pounds.
- [78:13]
Paula Pant
So 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 the show. Don't you love James, Cleo? 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? And 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. By 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 Salsihai 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. So please just know that I will never, ever, ever, ever initiate a DM with any of you. It's not, 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. And 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. And 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 and 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. Thank 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 F I R E. 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. And don't forget to subscribe to our newsletter@affordanything.com newsletter. That's affordanything.com 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, afford anything.com 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 Pant, and I'll meet you in the next episode.