Tag Archives: Habits

Magic Formula

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“Believe it can be done. When you believe something can be done, really believe, your mind will find the ways to do it. Believing a solution paves the way to solution.” – David J. Schwartz

In “The Little Book That Beats the Market”, Joel Greenblatt, Founder and Managing Partner at Gotham Capital (average annualized returns of 40% for over 20 years), sets out the basic principles for successful stock market investing.

In his book, Greenblatt provides a “magic formula” that makes buying good companies at bargain prices process driven. It takes a bunch of stocks (Russell 3000) and ranks them on quality; takes the same bunch and ranks them on value. Add the two ranks and buy the stocks with the highest summed ranks. Hold them for a year or preferably longer.

The formula is based on two very solid pillars of value investing: Invest in companies with high returns, and make sure they’re selling at a large discount (margin of safety).

For his quality factor, Greenblatt chose return on capital, defined as EBIT (earnings before interest and taxes) divided by the sum of working capital and fixed assets. For his value factor, Greenblatt chose EBIT divided by enterprise value.

“If you just stick to buying good companies (ones that have a high return on capital) and to buying those companies only at bargain prices (at prices that give you a high earnings yield), you can end up systematically buying many of the good companies that crazy Mr. Market has decided to literally give away.”

“Choosing individual stocks without any idea of what you’re looking for is like running through a dynamite factory with a burning match. You may live, but you’re still an idiot.”

“In short, companies that achieve a high return on capital are likely to have a special advantage of some kind. That special advantage keeps competitors from destroying the ability to earn above-average profits.”

“Stock prices move around wildly over very short periods of time. This does not mean that the values of the underlying companies have changed very much during that same period. In effect, the stock market acts very much like a crazy guy named Mr. Market.”

“Although over the short term, Mr. Market may set stock prices based on emotion, over the long term, it is the value of the company that becomes most important to Mr. Market.”

“After more than 25 years of investing professionally and after 9 years of teaching at an Ivy League business school, I am convinced of at least two things: 1. If you really want to “beat the market,” most professionals and academics can’t help you, and 2. That leaves only one real alternative: You must do it yourself.”
― Joel Greenblatt, The Little Book That Beats the Market

“Over the short term, Mr. Market acts like a wildly emotional guy who can buy or sell stocks at depressed or inflated prices. Over the long run, it’s a completely different story: Mr. Market gets it right.”

“Although over the short term Mr. Market may price stocks based on emotion, over the long term Mr. Market prices stocks based on their value.”

Greenblatt’s three basic principles:

  1. Buy good companies;
  2. Buy them at bargain prices;
  3. Use ranking to pick stocks.

Financial commentator Gary Shilling likes to say, “The stock market can remain irrational a lot longer than you can remain solvent.”

T,hus, when looking for bargain prices, you need to look at a lot more things than earnings yield, and when looking for good businesses, you need to look at a lot more things than high return on capital.

You can’t judge a business as good or bad without looking at its stability, its growth prospects, and the quality of its earnings; and you can’t judge a business as a bargain without looking at a variety of valuation metrics.

References:

  1. https://www.goodreads.com/work/quotes/73414-the-little-book-that-beats-the-market
  2. https://www.fool.com/investing/general/2007/03/23/foolish-book-review-the-little-book-that-beats-the.aspx
  3. https://seekingalpha.com/article/4374333-how-market-beat-little-book-beats-market-stock-pickers-guide-to-joel-greenblatts-magic

The Great Benefits and Joy of Movement

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“Anytime you engage in regular activity, you’re becoming this version of yourself that is more hopeful, more motivated, more energized, and better able to connect with others.” ~Kelly McGonigal, Ph.D.

Knowing only great benefits and happiness will result from movement, why are Americans so resistant to making movement a priority in their day?

While our brains and bodies reward us for moving and exertion, we also are built with an instinct to avoid overexertion, conserve energy, to rest, to avoid discomfort, and avoid failure and embarrassment, says Kelly McGonigal, Ph.D., a research psychologist, a lecturer at Stanford University, and an award-winning science writer and author of The Joy of Movement.

To retrain our bodies to encourage movement, we must first start with self-compassion and the practice of gratitude. We must remove the negative connotations from movement and recognize how the practice of movement can be really rewarding on its own.

“Exercise is health-enhancing and life-extending, yet many of us feel it’s a chore.” Kelly McGonigal

Research shows, according to Dr. McGonigal, there are three motivations that keep people moving:

  • Enjoyment – doing something you actually enjoy
  • The activity provides social community or sense of identity (i.e. “I’m a runner”), … positive social connection, and
  • It’s a personal challenge and meaningful to you as you’re making progress toward a goal.

If you can find an activity that gives you all three – you’re hooked for life! Exercise is health-enhancing and life-extending, yet many of us feel it’s a chore and burden.

Movement can be a source of joy and is intertwined with some of the most basic human joys, including self-expression, social connection, and mastery–and why it is a powerful antidote to the modern epidemics of depression, anxiety, and loneliness.

Basically, bliss can be found in any sustained physical activity, whether that’s hiking, swimming, cycling, dancing, or yoga. However, the runner’s high emerges only after a significant effort. It seems to be the brain’s way of rewarding you for working hard.

McGonigal tells the stories of people who have found fulfillment and belonging through running, walking, dancing, swimming, weightlifting, and more, with examples that span the globe.

Along the way, Dr. McGonigal paints a portrait of human nature that highlights our capacity for hope, cooperation, and self-transcendence.

Movement is integral to both our happiness and our humanity. By harnessing the power of movement, you can create happiness, meaning, and connection in your life.

The latest theory about the runner’s high claims that: Our ability to experience exercise-induced euphoria is linked to our earliest ancestors’ lives as hunters, scavengers, and foragers.

As biologist Dennis Bramble and paleoanthropologist Daniel Lieberman write, “Today, endurance running is primarily a form of exercise and recreation, but its roots may be as ancient as the origin of the human genus.”

The neurochemical state that makes running gratifying may have originally served as a reward to keep early humans hunting and gathering. What we call the runner’s high may even have encouraged our ancestors to cooperate and share the spoils of a hunt.

In our evolutionary past, humans may have survived in part because physical activity was pleasurable. It takes about six weeks of consistent moderate movement to see structural and neurochemical changes in your brain. And, increase intensity amplifies the benefits. The harder stuff seems to payoff. Exercise gets easier and more pleasurable sooner.

The key to unlocking the runner’s high is not the physical action of running itself, but can be achieved on continuous moderate intensity exercise. And in fact scientists have documented a similar increase in endocannabinoids from cycling, walking on a treadmill at an incline, and outdoor hiking.

If you want the high, you just have to put in the time and effort. 

References:

  1. https://getmadefor.com/blogs/perspective/the-joy-of-movement-how-looking-backwards-moves-us-forward
  2. https://www.amazon.com/Joy-Movement-exercise-happiness-connection/dp/0525534105/ref=nodl

Kelly McGonigal, Ph.D., is a research psychologist, a lecturer at Stanford University, and an award-winning science writer and author of The Joy of Movement.

Purpose

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“The only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it.” Steve Jobs

Purpose is an abiding intention to achieve a long-term goal that is both personally meaningful and makes a positive mark on the world, according to The Greater Good Science Center at the University of California, Berkeley. The goals that foster a sense of purpose are ones that can potentially change and improve the lives of other people. “If you can tune into your purpose and really align with it, setting goals so that your vision is an expression of that purpose, then life flows much more easily”, says author Jack Canfield

Purpose is not a destination, but a life’s journey, a mindset and a practice. It’s accessible at any age and at any income level, if we’re “willing to explore what matters to us and what kind of person we want to be—and act to become that person”. Filmmaker and author Drew Scott Pearlman writes: “Your purpose must be particular to you. This is the road less traveled. Your purpose cannot be someone else’s path, not your family’s path nor your friends’ path.”

Individuals with a sense of purpose report higher levels of happiness and life satisfaction—which seems associated with better health, wealth and emotional well-being outcomes. For many people, it was good and beneficial to have a purpose or a goal, no matter what it was.

Additionally, the physical health benefits of a sense of purpose are well-documented. For example, a Harvard’s School of Public Health study found that people who report higher levels of purpose at one point in time have objectively better physical agility four years later than those who report less purpose.

Moreover, researchers suggest that people take better care of themselves when they feel like they have something to live for. Having a purpose also seems to be associated with lower stress levels, which contributes to better health and emotional well-being. And, according to Helen Keller, “True happiness… is not attained through self-gratification, but through fidelity to a worthy purpose.”

Additionally, people with a more “prosocial” purpose—one aimed at helping others—experienced greater personal growth, integrity, and health later in adulthood. This result was echoed by a 2019 study by Anne Colby and colleagues at Stanford University. They surveyed almost 1,200 Americans in their midlife about their well-being and what goals were important to them. The researchers found significantly better physical health and higher emotional well-being among people who were involved in pursuing beyond-the-self goals, compared to those who were pursuing other types of goals. In other words, engaging in prosocial goals had more positive impact on physical health and emotional well-being than engaging in non-prosocial goals.

A sense of purpose appears to suggest that humans “can cooperate and accomplish big things together”. Research suggests that team leaders can effectively boost the productivity, work experience and well-being of their team members by helping them connect to a task-related higher purpose. The 2013 Core Beliefs and Culture Survey revealed that 91 percent of respondents who believe that their company has a strong sense of purpose also say it has a history of strong financial performance.

“Everything in your life informs you what your purpose is. How do you know it’s your purpose? It feels like it’s the right space for you. It feels like ‘This is what I should be doing; this is where I feel most myself.” Oprah Winfrey

Purpose also helps both individuals and the species to survive and thrive. Purpose often grows from our connection to others, which is why a crisis of purpose is often a symptom of isolation. Once you find your path, you’ll almost certainly find others traveling along with you, hoping to reach the same destination—a community.

youtu.be/_7wnkUP-Q4E

According to research by Kendall Cotton Bronk, a professor of psychology in the Division of Behavioral & Social Sciences at Claremont Graduate University, finding one’s purpose requires four key components:

  1. Dedicated commitment,
  2. Personal meaningfulness,
  3. Goal directedness, and
  4. A vision larger than one’s self.

Often, finding our purpose involves a combination of finding meaning in the experiences we’ve had, while assessing our values, skills, and hopes for a better world. It means taking time for personal reflection while imagining our ideal future. “Everything in your life informs you what your purpose is. How do you know it’s your purpose? It feels like it’s the right space for you. It feels like ‘This is what I should be doing; this is where I feel most myself’,” says Oprah Winfrey

A sense of purpose as we navigate milestones and transitions means that we can look forward to more satisfying, meaningful and abundant lives.

“He who has a why to live can bear almost any how.” Nietzsche

References:

  1. https://greatergood.berkeley.edu/topic/purpose/definition
  2. https://greatergood.berkeley.edu/topic/purpose/definition#why-find-purpose
  3. https://greatergood.berkeley.edu/topic/purpose/definition#how-to-cultivate-purpose
  4. https://www.thegrowthreactor.com/quotes-about-purpose-in-life/

Staying Invested Matters

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Investors are more likely to reach their long-term goals if they remain invested and avoid short-term decisions that may take them off course.

Staying the course during market volatility is often difficult for many investors. Some choose to move to cash investments, while others try to time the market. Regrettably, these investors are often buying high and selling low—and miss the rallies that follow the challenging periods.

Yet, staying invested through market ups and downs can help you stay on track to reach your investment goals.

Once you’ve determined how much you want to invest, setting up automatic transfers to your investment account or periodic investments can help you stay on track.

For example, investors often make suboptimal investing decisions when emotions take over, tending to buy out of excitement when the market is going up and sell out of fear when the market is falling. Markets do ultimately normalize, and when they do, those who stay invested may benefit more than those who don’t.  Consider this:

  • By missing some of the market’s best days, investors can lose out on critical opportunities to grow their portfolio. Market timing can have devastating results.
  • Seven of the best 10 days occurred within two weeks of the 10 worst days.
  • The second worst day for the markets during the early days of the COVID-19 pandemic, March 12, 2020, was immediately followed by the second best day of the year.

Trying to time the bottom is never considered a sound strategy for long-term investing.

Staying invested during periods of heighten market volatility is an important strategy as, historically, six of the ten best days in the market occur within two weeks of the ten worst days; those who miss the best days miss out on performance.

Thus, the decision to stay invested during market turmoil is often better than timing
when to sell and buy.

References:

  1. https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/principles-for-investing/
  2. https://www.pimco.com/en-us/resources/education/the-benefits-of-staying-invested/

Seven Steps to Success: John C. Maxwell

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“Attitude is the first quality that marks the successful man. If he has a positive attitude and is a positive thinker, who likes challenges and difficult situations, then he has half his success achieved.” John C. Maxwell

Although there is not a perfect formula to be successful, everyone has the capability to become successful. Success is a journey that you create for yourself if you strongly desire it and act on it. And, success can be learned and attained by you and everyone else. One ‘tried and true’ way to learn about becoming successful is to study the success of other people.

And that is what John C. Maxwell* has done. After over nearly fifty years of knowing successful people and studying the subject, John C. Maxwell has taught millions the principles of success and has embraced the following definition of success:

Success is…

  • Knowing your purpose in life,
  • Growing to reach your maximum potential, and
  • Sowing seeds that benefit others.

By this definition, success is a journey rather than a destination. No matter how long you live or what you decide to do in life, you will never exhaust your capacity to grow toward your potential, nor will you run out of opportunities to help others.

Additionally, Maxwell has developed a process of seven steps for success that are available to you and anyone else who desires to study and pursues the journey of success:

1. Make a commitment to grow daily.

“Success is… knowing your purpose in life, growing to reach your maximum potential, and sowing seeds that benefit others.” John C. Maxwell

Success comes from growing, not from achieving, acquiring or advancing. If you commit to growing each day, you will soon start noticing positive results in your life. Every action that you take towards growing will bring you closer to success, it doesn’t matter how small your action is or how slow you go as long as you keep going. As the poet Robert Browning said, “Why stay on earth except to grow?”

2. Value the process more than events.

“You’ll never change your life until you change something you do daily. The secret of your success is found in your daily routine.” John C. Maxwell

If your goal is to go to the next level in life, then strive for continuous improvement. Events in life are temporary, they teach you how to make better decisions. However, it is the process of change and growth that have lasting value. Choose to embrace the process and learn from both, the process and the event.

3. Don’t wait for inspiration.

“If you start today to do the right thing, you are already a success even if it doesn’t show yet.” John C. Maxwell

People who advance far in life find ways to motivate themselves and live the best they can regardless of how they feel. At times, they even have to push themselves to do something. Successful people persevere. Basketball great Jerry West said, “You can’t get much done in life if you only work on the days when you feel good.”

4. Be willing to sacrifice pleasure for opportunity.

“Success is peace of mind, which is a direct result of self-satisfaction in knowing you did your best to become the best that you are capable of becoming.” John C. Maxwell

There are two paths to follow: “You can play now and pay later, or pay now and play later. You choose whether you will first want to pay or play. Regardless of the path you choose to take, life will always demand a payment. If you choose “to pay first,” you will be more pleased with your results and enjoy greater and sweeter rewards

5. Dream big.

“Where success is concerned, people are not measured in inches, or pounds, or college degrees, or family background; they are measured by the size of their thinking.” John C. Maxwell

If you’re going to dream, dare to dream big. Dreaming small may keep you from discovering what you’re truly made of. Robert J. Kriegel and Louis Patler, authors of If Ain’t Broke, Brake It, assert, “We don’t have a clue as to what people’s limits are. All the tests, stopwatches, and finish lines in the world can’t measure human potential. When someone is pursuing their dream, they’ll go far beyond what seems to be their limitations. The potential that exists within us is limitless and largely untapped. When you think of limits, you create them.”

6. Plan your priorities.

“To Stay Focused in Life: You can’t know everyone. You can’t do everything. You can’t go everywhere. We have to pick and choose between good and a little bit better.” John C. Maxwell

Successful people have many things common and one of of them is that they have mastered the art of how to effectively manage their time. More than anything, they have organized themselves. Henry Kaiser, founder of Kaiser Aluminum and Kaiser Permanente Health Care, says, “Every minute spent in planning will save you two in execution. Time cannot be retrieved, so live every moment the best you can.

7. Give up to go up.

“One of the major keys to success is to keep moving forward on the journey, making the best of the detours and interruptions, turning adversity into advantage.” John C. Maxwell

Everything that has value comes as a result of making sacrifices. Life will present you with countless opportunities to trade something you value for something else. Keep your eyes open to identify those opportunities and once you do, make sure that what you decide to trade will be a trade up, not down.

In conclusion, “success is a journey” isn’t just a matter of words and ideas, it’s a matter of actions. It’s in you to act on what makes you achieve your success every day. Know that what may mean success to you may not mean success to others, and vice versa–and this is completely fine. Success implies diversity of thoughts, habits, behaviors, values, and attitudes.

“If you make it your discipline to do a little bit of growing every day, in just a few years you will be amazed by your transformation.” John C. Maxwell

References:

  1. https://www.johnmaxwell.com/blog/what-i-believe-about-success/
  2. https://www.linkedin.com/pulse/seven-steps-success-john-c-maxwell-ivette-k-caballero

* John C. Maxwell is an International Leadership Expert, Speaker, #1 New York Times bestselling author, coach, and speaker who has sold more than 26 million books in fifty languages. As the founder of The John Maxwell Company, The John Maxwell Team, EQUIP, and the John Maxwell Leadership Foundation, he has trained more than 6 million leaders. Dr. Maxwell speaks each year to Fortune 500 companies, presidents of nations, and many of the world’s top business leaders. For more information about him visit JohnMaxwell.com.

Patience is a Virtue

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“The most useful form of patience is persistence. Patience implies waiting for things to improve on their own. Persistence implies keeping your head down and continuing to work when things take longer than you expect.” ~James Clear, author of Atomic Habits

Patience, along with effective habits, are a necessity and essential virtue in order to make changes and improvements in your life.

As James Clear points out: “Your outcomes are a lagging measure of your habits. Your physical fitness is a lagging measure of your eating and training habits. Your knowledge is a lagging measure of your learning habits. Your net worth is a lagging measure of your financial habits.”

Effectively, you get in your life what you repeat over the long term.

And, patience is imperative in investing.

Billionaire investor Warren Buffett reminds investor regarding the importance of patience when he quipped that: “Successful investing takes time, discipline, and patience. No matter how great the talent or effort, some things just take time. you can’t produce a baby in one month by getting nine women pregnant.”

“The key to everything is patience. You get the chicken by hatching the egg, not by smashing it.” ~ Arnold H. Glasow

References:

  1. https://www.purposefairy.com/75545/quotes-on-patience/
  2. https://bizadda360.com/quotes/warren-buffett-quotes

Positive Wealth Building Thoughts

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“Wealth is the product of a man’s capacity to think.” – Ayn Rand

“We become what we think about.” — Earl Nightingale

Wealth building begins and ends with your mindset, thoughts and behaviors. Thus, it’s imperative to keep your thoughts focused on the positive, on success, on making an impact, on changing the world and on changing people’s lives for the better.

There is an old adage that goes:

  • Watch your thoughts, they become words.
  • Watch your words, they become actions.
  • Watch your actions, they become habits.
  • Watch your habits, they become your character.
  • Watch your character, it becomes your destiny.

You must not fix your eyes on current world conditions or even your own personal situation. Instead, you must focus on what you can control, on how you respond, and on how well you maintain a positive and winning mindset and attitude. Focus on the solution not the problem.

So, your keys to success tips include:

  1. Use only positive words while thinking and while talking. Use words such as, ‘I can’, ‘I am able’, ‘it is possible’, ‘it can be done’, etc.
  2. Allow only feelings of happiness, strength and success into your awareness.
  3. Every time a negative thought finds its way into your mind, immediately replace it with a positive thought or an affirmation.
  4. In your conversation, use words that bring forth feelings and mental images of strength, happiness and success.
  5. Before starting with any plan or action, visualize clearly in your mind its successful outcome.
  6. Read at least one page of an inspiring book or an inspiring article every day.
  7. Associate yourself with people who think positively.
  8. Act courageous. Always sit and walk with your back straight. This will strengthen your confidence and inner strength.

In order to build wealth and to achieve financial freedom, you must develop a wealth building mindset and follow a deliberate plan. As you will discover, your wealth grows to the extent that you do.

“We become what we think about most of the time, and that’s the strangest secret.” – Earl Nightingale

Bottomline…for success, keep your focus and thoughts on wealth building!!! Because, what you focus on expands and establishing habits is the key to expansion.

Don’t focus on the problems your dealing with today or the conditions of the world; fix your eyes on your systems, habits and the destination.

Napoleon Hill describes success as the product of having a definite objective. In achieving that objective, you need a clear definite aim and a definite plan to get there.

A definite chief aim means in simple terms that you must have a clear objective that you are aiming to achieve. Success — building wealth and achieving financial freedom — will not come to you and you will not be able to manifest what you want, unless you know what you want.

Success is ultimately achieved by focusing on a clear objective, and pursuing that objective deliberately and with all the means at your disposal. In simple terms, success is simple, but not easy.

“Whatever the mind of man can conceive and believe it can achieve.” Napoleon Hill

Actually, you just have to be exceptionally clear about what you are trying to achieve, passionate about achieving it, comfortable and happy that what you’re doing matches your values: and finally, and perhaps more important than anything else, you must believe that you can achieve it, you must expect to do so, and you must have a plan to achieve it.

So it’s imperative that you use the power of your thoughts and mind to focus on the positive aspects of your life. This works similarly to building strength in the muscles of your body. As you focus on what’s going right in your life, it will grow and expand like a muscle.

What you focus on grows and expands!

References:

  1. https://www.therealsecretofsuccess.com/napoleon-hill/
  2. https://activerain.com/blogsview/5155111/what-you-focus-on-expands

Systems are Best for Long Term Success

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“Goals are good for setting a direction, but systems are best for making progress.” James Clear

James Clear, author of Atomic Habits, spoke at a conference I attended about ‘goals and system’. During his insightful talk, he explained that “Goals are good for setting a direction, but systems are best for making progress. ”

Furthermore, he said that, “I began to realize that my results had very little to do with the goals I set and nearly everything to do with the systems I followed.” To explain, he writes that “If you’re an entrepreneur, your goal might be to build a million-dollar business. Your system is how you test product ideas, hire employees, and run marketing campaigns.”

Moreover, goals are good for setting a direction, but systems are best for making progress and reaching your destination.

Goals can become too limiting, says Scott Adams, the nationally syndicated cartoonist of Dilbert. Systems, in contrast, habits are things that people regularly do and that increase the odds that an event ends up creating an experience that leads to an eventual success, even though that success might not be immediately apparent.

A system, says Adams, contributes to a positive attitude that widens a person’s field of perception, which he contends is what makes some people luckier than others in that they can see more opportunities.

Build a system for getting 1% better every day.

In Clear’s opinion, “a handful of problems arise when you spend too much time thinking about your goals and not enough time designing your systems.”

https://twitter.com/atomichabitss/status/1498825041835823105

According to Clear, several problems arise when you focus on goals and ignore the system, such as:

Problem #1: Winners and losers have the same goals.

Successful and unsuccessful people often share the same goals, thus the goal cannot be what differentiates the winners from the losers. It wasn’t the goal of winning the Tour de France that propelled the British Cyclists to the top of the sport, states Clear. Presumably, they had wanted to win the race every year before—just like every other professional team. The goal had always been there. It was only when they implemented a system of continuous small improvements that they achieved a different outcome.

Problem #2: Achieving a goal is only a momentary change.

To truly have meaningful and long-lasting change, you must change your habits that led to the problem or challenge in the first place. Achieving a goal only changes your life for the moment. That’s the counterintuitive thing about improvement. You think you need to change your results, but the results are not the problem. What you really need to change are the systems that cause those results. When you solve problems at the results level, you only solve them temporarily. In order to improve for good, you need to solve problems at the systems level. Fix the inputs and the outputs will fix themselves.

Problem #3: Goals restrict your happiness.

The problem with a goals-first mentality is that you’re continually putting happiness off until the next milestone. Happiness should not be just something for your future self to enjoy.

Furthermore, goals create an “either-or” conflict: either you achieve your goal and are successful or you fail and you are a disappointment. You mentally box yourself into a narrow version of happiness. It makes no sense to restrict your satisfaction to one scenario when there are many paths to success.

A systems-first mentality provides the antidote. When you fall in love with the process rather than the product, you don’t have to wait to give yourself permission to be happy. You can be satisfied anytime your system is running. And a system can be successful in many different forms, not just the one you first envision.

Problem #4: Goals are at odds with long-term progress.

Finally, a goal-oriented mind-set can create a “yo-yo” effect. When all of your hard work is focused on a particular goal, what is left to push you forward after you achieve it? This is why many people find themselves reverting to their old habits after accomplishing a goal.

The purpose of setting goals is to win the game. The purpose of building systems is to continue playing the game. True long-term thinking is goal-less thinking. It’s not about any single accomplishment. It is about the cycle of endless refinement and continuous improvement. Ultimately, it is your commitment to the process that will determine your progress.

Fall in love with systems

James Clear surmises that “goals are good for planning your progress and systems are good for actually making progress. Goals can provide direction and even push you forward in the short-term, but eventually a well-designed system will always win. Having a system is what matters. Committing to the process is what makes the difference.”

The next time you think about a goal, something you deeply desire to achieve, think of the system that you will follow — and how often — in order to reach it.

References:

  1. https://jamesclear.com/goals-systems
  2. https://www.cioinsight.com/careers/dilbert-creator-focus-on-systems-not-goals/
  3. https://jamesclear.com/good-habits
  4. https://medium.com/swlh/thinking-in-systems-not-goals-2b9a4105d0d3

James Clear is the author of the #1 New York Times bestseller, Atomic Habits.

“The most useful form of patience is persistence. Patience implies waiting for things to improve on their own. Persistence implies keeping your head down and continuing to work when things take longer than you expect.” ~James Clear

Habits and System Building

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“Your system is the collection of daily habits.” James Clear

Behaviors and Beliefs are a two way Street, says James Clear, author of “Atomic Habit”. Effectively, the way you act influences what you believe about yourself; what you believe about yourself influences the actions you take and the manner in which you behave. But, you should let the behavior lead the way, explains Clear.

Every action you take on a daily basis is a vote regarding the person you are currently and want to become in the future. Everyday you’re casting votes to become the person you see yourself. Habits matter because they reenforce the person you want to become.

Build a system.

You want to focus on developing a process / building a system or achieving a goal or outcome. You don’t rise to the level of your goals, you fail to the level of your system. Building the system — the way you prepare — that executes on achieving your goals is what is important. The system is what gets you closer to your destination. Ask yourself what you’re optimizing for?

Your goal is your desired outcome. Your system is the collection of daily habits you follow. Your system is your collection of daily habits you follow. Your current daily habits are perfectly designed to deliver your current results. Over a long period of time, your life bends towards your system, or collection of habits.

The purpose of habits:

Habits are the autopilot mode that your brain goes into when completing repetitive tasks, according to James Clear, author of “Atomic Habits”. For example, driving to work, the first time you do it, it may be confusing and stressful but after a few weeks your mind is just going through the motions, explains Clear.

Not having a grasp on your habits means not having control of your life and outcomes…consider:

  1. No financial habits = living pay check to paycheck.
  2. No healthy food and exercise habits = lacking energy and good health.

Without good habits, you will always be behind the curve. Success in your life and finances depends on the effectiveness of your habits and systems.

  • Your system for reading might be to read at least 1 page before bed every night.
  • Your system for exercising might be to do at least 5 minutes of bodyweight exercise every morning.
  • Your system for healthy eating might be to eat at least 1 apple every day for lunch.
  • Habits are the “compound interest”of self-improvement.

The bigger your systems, the bigger your results. Systems are the vehicles that are going to take you to your goals—your goals are simply the destination. Effectively, you don’t rise to the level of your goals; you fall to the level of your systems.

If you want to change the world and do big things, the actions you’re doing every day, your habits, are what are going to get you there. That’s where the things happens.

“You do not rise to the level of your goals.  You fall to the level of your systems.”James Clear

Showing up each day and making one small choice or trying to do something in a slightly better way, and then watching that compound and multiply over time. In life, changes may seem relatively small and insignificant on a daily basis, but over 10 or 20 or 30 years, small choices and changes can make meaningful difference.

What starts out small and seems relatively insignificant, grows and accumulates into something bigger.

Your mindsets and your systems can set us up for success. It is important to understand the importance of consistency when it comes to forming habits that last.

“Changes that seem small and unimportant at first will compound into remarkable results if you’re willing to stick with them for years”, says Clear. “We all deal with setbacks, but in the long run, the quality of our lives depends on the quality of our habits. With the same habits, you’ll end up with the same results. With better habits, anything is possible.”

Small incremental changes can end in massive results. Small improvements day by day will result in a huge compounding effect, says Clear.

References:

  1. https://movemequotes.com/beyond-the-quote-8/
  2. https://brenebrown.com/podcast/atomic-habits-part-1-of-2/
  3. https://theherstonproject.com/2020/11/atomic-habits-summary/