Best of Habit Formation: James Clear

This week's Summer Series concludes with a two-fer on habits. There may be no better way to improve the investment process than to understand what it takes to improve ourselves. We've got two of the best – James Clear and Katy Milkman, experts and authors of wildly bestselling books Atomic Habits and How to Change. Please enjoy my conversations with James Clear and Katy Milkman, both from 2021. We hope you've enjoyed this summer exploration in improving the investment process with some of the best conversations over the last nine years. Learn more about Capital Allocators University https://www.capitalallocators.com/capital-allocators-university/. Try ALEX https://tryalex.admiredleadership.com by Admired Leadership. Learn More Follow Ted on Twitter at @tseides https://twitter.com/tseides?lang=en or LinkedIn https://www.linkedin.com/in/tedseides/ Subscribe to the mailing list https://capitalallocators.com/ Access Transcript with Premium Membership https://capitalallocators.com/signup Editing and post-production work for this episode was provided by The Podcast Consultant (⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://thepodcastconsultant.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://thepodcastconsultant.com/)

• 0:06Speaker 00

  I'm Ted Seides and this is Capital Allocators. For the second year, our summer series will share some of the best episodes of the past, curated from our favorites and yours. You can pull down many of the great ones on our Spotify playlists. This series pushes them to your regular listening feed. Our 2026 summer series focuses on improving the investment process. Over the next six weeks, we'll share 10 gems from interdisciplinary skillsets that will help you level up your investing across decision-making, interviewing, storytelling, negotiations, and habit formation. This week's

• 0:48Speaker 00

  summer series concludes with a twofer on habits. There may be no better way to improve the investment process than to understand what it takes to improve ourselves. And we've got two of the best, James Clear and Katie Milkman, experts and authors of the wildly bestselling books Atomic Habits and How to Change.

• 1:10Speaker 01

  Before we get to the interview, we're excited to introduce the next chapter of Capital Allocators University, an online on-demand curriculum with an annual in-person gathering for investment professionals committed to continuous learning. One of the great ironies of investing is that the skills that matter most over a long career are often the ones least formally taught. Things like decision-making, communication, leadership, time management, interviewing, and building relationships. That's why we've evolved Capital Allocators University into an online on-demand experience, making those lessons accessible to investment professionals everywhere. The best careers don't compound through knowledge alone. They compound through knowledge and relationships. If you'd like to explore the curriculum or

• 1:54Speaker 01

  someone on your team comes to mind, visit the link in our show notes or the university page on our website. Thanks so much for spreading the word about the next chapter of Capital Allocators University.

• 2:04Speaker 00

  Capital Allocators is brought to you by AlphaSense. Here's something for you. Most AI tools today are very good at sounding right, but can you actually trace it back to a filing, transcript, or specific passage that drove the answer? Or are you just trusting the confidence of the output? For allocators, that's not a minor concern. A missed filing, incorrect source, or context that gets lost somewhere in the retrieval chain aren't edge cases. They're how decisions go wrong. AlphaSense is the AI platform built specifically for

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  this. They own the content, over 500 million curated documents, from broker research and expert transcripts to filings and earnings calls. And they own the retrieval layer on top of it. That means every answer can link back to an exact verifiable source, because the answer is only as good as what's underneath it. And with AlphaSense, you know exactly what that is. See it for yourself. Try a free trial at alphasense.com/capital. That's alphasense.com with a hyphen in the middle slash capital. Capital Allocators is also brought to you by Morningstar. In a sea of data, you need

• 3:27Speaker 00

  to know what you can trust. Morningstar's data, analytics, and research helps bring clarity across public and private markets, connecting independent research and data into the tools and AI platforms you use every day, so insights are easier to spot and act on. Morningstar, nothing in your way. Visit morningstar.com/gameon to learn more. Capital Allocators is also brought to you by Juniper Square, the operations partner trusted by the leading private market GPs. One theme that keeps coming up on the show is GPs that build the strongest and most durable relationships with LPs are the ones

• 4:08Speaker 00

  that have both strong returns and strong operations. AI raises the stakes on operations, and having Juniper Square as your operations partner helps ensure your data is organized, accurate, and accessible, so you can unlock operational alpha. That's why thousands of GPs trust Juniper Square. Learn more at junipersquare.com/capitalallocators. Please enjoy my conversations with James Clear and Katie Milkman, both from 2021. We hope you've enjoyed this summer exploration and improving the investment process with some of the best conversations over the past nine years.

• 4:52Speaker 00

  James, good to see you. Thanks so much for doing this.

• 4:55Speaker 02

  Yeah, of course. Thanks for having me.

• 4:57Speaker 00

  Yeah, I'm always curious, when someone has really put something out there and spent so much time about something like habits, what were you like as a kid?

• 5:07Speaker 02

  So I guess I had a couple of different elements that were a big part of my childhood. So first one was athletics. My dad played professional baseball. He played in the minor leagues for St. Louis Cardinals. And then I wanted to be an athlete growing up too and wanted to be like him. So baseball was a big part of it. But I did a bunch of other stuff, too. Swimming, basketball. I did one season of football. In football, there are kids who are getting hit and kids who are giving hits. And I was always getting hit. So that didn't last that long in that one. But yeah, so a lot of sports. I also always liked school. You could probably just say I was a nerd to some degree. Like, I really enjoyed that. In both of those areas, though, in sports and in academics, I was always hanging out with people who were better than me. Like, I was never the smartest kid. All

• 5:50Speaker 02

  of my friends were smarter than I was. And I was never the most athletic. I was never the fastest on any team I was on or the best player or whatever. And I think that having a foot in both of those areas really helped me, because I had friends who were all the jocks, and I was friends with all the nerds as well. And I kind of felt like I could play in both worlds. It gave me a broad exposure to things. In fifth grade, some of my friends started a robotics club, which is like the most generous way to describe it, because it was actually just us building conveyor belts with Legos and then like making a program that would make it go forward or backward. And so now I essentially run a technology business or run an online business. And I think some of that early exposure led to

• 6:32Speaker 02

  a lot of those interests. And then on the athletics side, that was more learning how to be a good teammate, learning how to push myself physically, like weightlifting and strength training are still a big part of my life. All those things played an important role in who I became. It's just I didn't know exactly how they would be applied at the time.

• 6:49Speaker 00

  And at what point in time did habits become a conscious effort?

• 6:53Speaker 02

  Probably high school was the first time that I started actually thinking about it, but not in the way that I like write about it in Atomic Habits. I remember in high school, I was playing a couple of sports. I was involved in clubs and stuff. And I had a lot of things going on each day. And because I had so many things, I had to plan my day out the night before. And so I got into this little habit of doing that when I was a sophomore or junior or whatever. And that's such a basic little thing, but I look back on that as kind of the first time when I started taking it seriously and trying to think about, okay, what do I actually need to do tomorrow for it to be a successful day and stuff like that?

• 7:27Speaker 00

  And what'd you do when you first came out of college?

• 7:29Speaker 02

  So I went to undergrad at Denison University. Loved it. It was amazing. Had an awesome experience. There was like the perfect school for me. And I was a science major in undergrad. And my senior year, I basically, if I'm being truthful, all I really wanted to do was play baseball. But I had to start thinking about the next thing, and I couldn't decide, do I want to go to graduate school? Or should I get a job? Or should I try to go to medical school or whatever? So I had a bunch of stuff I was interested in, but nothing that I was super serious about. And the story I told myself at the time was, I'll go to business school, because no matter what I do, like, business knowledge will be useful. And so I went straight from undergrad and got my MBA. And honestly, those two years, looking back on them, the most useful thing for me was it gave me time to think. It gave me

• 8:12Speaker 02

  time to figure out what I wanted to do next. And I didn't know what I wanted to do, but I knew that I kind of wanted to be in control of it. I knew I wanted to like do my own thing and have flexibility. And so when I graduated, all my other classmates got jobs. And I just was like, well, I had saved up $10,000. And so I lived on that for the first six months. And I was like, I'll just see if I can figure out a way to make this work. I had to take freelance jobs and stuff to get by for the first like year and a half. It really wasn't until about 18 months to maybe two years in that I started actually making enough to pay bills and be like, okay, this is my full-time thing. So the first two years, I kind of stumbled around, but then eventually I found my footing and kind of have led me to doing what I do now.

• 8:53Speaker 00

  What was that path?

• 8:55Speaker 02

  Somebody told me early on, try things until something comes easily. And I did, I tried a couple of different business ideas early on. Like, one of my first ideas was this iPhone app that I tried to create, which you'll need to be very good at math to know that this is a bad idea. I paid like $1,500 for a developer to make it. It was pretty terrible. In total, it made, I think, $17. So that was a pretty quick loss off the bat. I'm like eating through that 10K I'd saved up. And then I had a couple of other ideas for different businesses and domain names. Like, I bought puppypresent.com. Oh, my girlfriend loves playing with puppies. I should like make a marketplace essentially and get a bunch of breeders on there. And you could rent time out and play with their puppy by the hour or whatever. The breeders hated the idea because they were like, you just want people to play with our dogs,

• 9:40Speaker 02

  but they don't want to buy them. And so, anyway, that didn't go anywhere. So I tried a variety of things like that. And eventually, what I figured out is, hey, these ideas that I'm launching, they're not going well because I don't have anybody to market them to. Like, I don't have an audience. And so I started writing, I started blogging to build an email list, because I was like, I need to have somebody to launch this product to, whatever the next thing is that I do. And this funny thing happened along the way, which I was like, wow, I actually kind of liked writing and building this email list more than I thought I would. And that advice of like, try things until something comes easily, that was one of the first things I tried where I was like, actually, I think I'm kind of good at building an email list. It seems like I'm better at that than the other stuff that I've been trying.

• 10:23Speaker 02

  If you talk to any of my professors, English professors, high school teachers, whatever, none of them would have said, oh, he'll be a writer. They probably would have been like, B+, he was fine. Like I said, I was a science guy, so I just never really thought about it. But I had to learn it along the way as I built the business. And the more that I wrote, the more I liked it. And people seemed to resonate with the ideas. And I was like, you know what? This is actually kind of fun. And so I started out as an entrepreneur in September of 2010. And November of 2012 was when I wrote my first article on jamesclear.com. So it took me kind of two years to stumble my way there. And then for the next three years, I wrote a new article every Monday and Thursday. And that was really the habit that led to the growth of the site,

• 11:06Speaker 02

  that led to the growth of the business, that ultimately led to the book deal that became Atomic Habits. So it was really a gradual evolution to get to there. And then when I started writing about habits, I had this kind of imposter syndrome sort of thing where they're like, well, who am I to write about this? And I had a friend tell me early on, the way that you become an expert is by writing about it each week. And I sort of internalized that idea. And I think there is some truth to that. It's not to say that like, it's not useful to go and actually study it in some academic sense. But you can become an expert by writing about something every week, because once you get two or three years in, it's like, yeah, actually, it turns out there are very few people who have written 100 articles on habits. And so you learn a lot along the way.

• 11:49Speaker 02

  And that was kind of like how I picked it up and learned it and started to integrate my thoughts.

• 11:54Speaker 03

  How did you do research if there really weren't that many people out there writing about habits?

• 12:01Speaker 02

  I like to refer to myself as idea agnostic. For example, I don't only write about like psychology. You'll find ideas in Atomic Habits from biology, architecture, finance, history, philosophy. I think the upside of it outweighs the downside, which is that knowledge is not confined to one little academic silo. And the real world does not work that way. You have knowledge bleeding into different categories all the time. And so you need to have a broad set of skills and ideas in order to properly understand how reality works and what you should be doing. So that's a really high upside. But the downside, the trade off, is that it's impossible for any one person to be an expert on all those topics.

• 12:43Speaker 02

  And so the challenge that I ran into was like, well, if I want to write about this in a scientific way, if I want to write about this in a credible way, I better figure out a way to make sure that all these broad, diverse ideas are accurate. And for me, the best strategy that I have so far is to essentially curate the curators. So I try to find people who are trusted sources in each domain. And then I use them as my proxy to say, they're going to act as my experts. And if they say this is more or less the scientific consensus on a particular topic, I'll trust them and I'll use that as the baseline for integrating it with all these other ideas. And I try to do that for each industry. And then you put it all together and hopefully you get a fairly clear and accurate picture.

• 13:27Speaker 03

  What was your writing process like in those couple of years leading up to writing the book?

• 13:31Speaker 02

  Well, I think you need to focus on volume before intensity. And what I mean by that is, early on, it's kind of like in the gym. If you just roll into the gym the first day and you try to squat 500 pounds, it's not going to go very well. But if instead, you just work your way up slowly and you start with the bar and then you show up the next day and you put a little weight on it and you do that for 10 years, well, then maybe you have a chance of squatting 500 pounds. But you have to do volume before you do intensity. And the same thing is true for creative work, especially early on in your career. Because for me at least, I didn't know my voice. I didn't know what I wanted to say. I didn't know how I wanted to say it or what my style was. And so by writing a new article every Monday and Thursday, I got a lot of reps in. And you start to gradually refine your approach.

• 14:17Speaker 02

  And eventually, the style that I settled on, it goes by different, it's kind of a standard nonfiction style, which is story, study, lesson. So you start with some kind of story to bring people in. You back it up with some piece of research and then you have a practical lesson or takeaway. There's another one that I'll use occasionally, which is principle, story, action step. So you just state right up front, this is the main thing that I believe. This is my hypothesis or principle. Then you give a story to illustrate it and then you show them how to practically apply it. But that general theme, you need to use stories to hook people in. And for me, at least, my style of writing, I want the ideas to be true and useful and clear. That often means they need some kind of scientific backing.

• 14:58Speaker 02

  And at the end of the day, the number one thing I care about is it has to be practical and actionable. And so I try to blend those things together, but it took me a while to figure out that that was my approach.

• 15:09Speaker 03

  So as you first started writing and it wasn't all clear necessarily what you were writing about at that time, as you look back, are there an article or two that you just chuckle that you actually wrote something about that and put it out?

• 15:21Speaker 02

  Oh, yeah. I mean, there are some really terrible ones. But it's also like, you simultaneously, this is good that I can look back on it and say it's bad because you're like, okay, that means I'm better now. But also, you still hate that they're out there, that you did that. So you're like, clearly, I wish I had like learned faster. But I didn't know that I wanted to write about habits specifically early on. So I had a couple of articles that were more health or fitness related. I wrote about medicine. I wrote about how to squat but more weights, like things like that, that were in a little bit of a different vertical. And they did fine, but whenever I would write about a more broad principle or my ideas around habits or decision making and making better choices

• 16:04Speaker 02

  or strategy, these kind of more meta level things, those articles did better and people resonated with them more. And so all the articles were about things that I was excited about. Like, I did a huge 6,000, 8,000 word breakdown of my travel strategy and everything that I had in my travel bag. So it's like fairly niche group of people that are going to be excited about that. But I thought it was cool. But I also thought writing about habits and strategy and decision making was cool. And so when I wrote about those and they did really well, I was like, all right, I'll just spend a little bit more time here. So I kind of gradually let the readers lead me down the path and figured out which direction to go in.

• 16:42Speaker 03

  I'm kind of curious, you started jamesclear.com writing 2012. You're probably at that point close to burning through your $10,000 and you're writing on a blog, which isn't necessarily a rapid revenue generator. So what happened in those ensuing couple of years after that?

• 16:57Speaker 02

  One of the other business ideas I was working on, never made a lot of money, but it made enough that I could pay my bills. And so that was running on the side as I started jamesclear.com. And so I didn't need to make any money for the first year from it. And I think that did help me because I just focused on audience growth. And so then, after I got into a year, so, you know, end of 2013, beginning of 2014, then I was like, okay, now I have an audience. And I started hosting workshops and I just did virtual ones. Now we would do it on Zoom, but basically the same thing. And I would just pay, charge a ticket for that. I think the very first one I did was like 29 bucks to attend. And I did a two hour workshop and then I sent out the recording afterward. And I would just pick different themes, habits, productivity, procrastination, whatever.

• 17:41Speaker 02

  So I did those and that got me through the next couple of years. Those did fairly well. I would do like one a quarter or something like that. And then I kept writing and kept building the audience. And then, once I was three years in, I signed the book deal for Atomic Habits. So I got the advance and that was enough for me to live on that. And then when the book came out, I was already getting speaking requests, but I got a lot more speaking requests after that. And the book obviously was sold well. And so what's funny is, I tried a couple of different business models, but it wasn't until the book launched that I found something where I was like, okay, this is me. Atomic Habits was the first thing that I ever sold that felt like, this is in my wheelhouse. I'm good at doing it. I like doing it. I like that it's a low price point and it's really accessible. It can scale essentially infinitely.

• 18:24Speaker 02

  And I just like all those qualities about it. So I, again, I kind of stumbled my way into writing. I didn't know I would want to do that as a business or as a career, but it has a lot of qualities that appeal to my personality.

• 18:36Speaker 03

  Along the way, what did you learn about building an audience?

• 18:41Speaker 02

  I love talking about this. I could probably talk about it for hours. There's so many things. I mean, one of the first things that comes to mind is you have to lead with value. Every interaction, you should always lead with the best idea that you have at the time. So every time I write an article, it's about whatever I think the best ideas I have that week. When I send out my newsletter now, I have a spreadsheet. I've got like 850 ideas in there. And every time I look through it, I'm trying to pick the best three to put in. I'm never saving my best idea for the next week. And I think that idea of like, never save your best thing, always send it out to the audience, that kind of serves you well. Like, there will always be another idea. So just keep working on sending out the very best thing that you have each week. That's one part of delivering the value. The other thing is,

• 19:26Speaker 02

  you should try to spoon feed the reader, or the listener, in the case of a podcast, or the viewer, in the case of a YouTube show, or whatever. People generally, at least when we're talking about evergreen topics, like what I read about habits and decision making and so on, people generally want similar things. They want healthy habits. They want to not worry about money. They want to have good relationships and so on and so forth. So that broad pitch of build better habits, or have better relationships, or make more money, that's easy. Everybody generally wants that. There's, you don't have to convince anybody of it. But making it specific, making it actionable, spoon feeding the next step to the reader. Most people don't go through the work of figuring out, what is that exactly?

• 20:11Speaker 02

  How do I operationalize this? How do I make it actionable? And then how do I explain that in a very simple way to people so that they can use it? And that was one of the things I spent the most time on with Atomic Habits. Generally, yeah, everybody knows you should build good habits and break bad ones. But that requires a lot of work to break that down into specific examples and show people the strategies of exactly how to do that. I think my punchline for that would be that most how to books are not actually how to. They're what to. They're what you should want, or why to. Like, yeah, having good habits will, you know, improve your productivity. And that's fine. People will understand that. But they don't actually show you how to do it. And I think that that's a big step that

• 20:53Speaker 02

  a lot of creators can take to make things easier for people. And then the last thing I'll just mention, kind of in this answer, is consistency. When I started, there was a guy who had a popular fitness website, and his audience, when I first came across him, he had like 20,000 subscribers, and I had like 2,000. So his audience, 10 times the size of mine. Two years later, his audience is about 20,000 subscribers still, and mine was 200,000. So now I'm 10 times the size of him. And the only difference is that he just stopped writing. I wrote every week, and he just didn't write anymore. And I really don't think that the quality of our work was that different. He had great ideas. His

• 21:34Speaker 02

  stuff was really good. It's just surprising how much it counts for to show up consistently and do it. Like, they're just, there aren't that many people who write two high-quality articles a week for three years. There's just not that many people that do it. And most of my articles take me 20 hours or so to do. And so if you're going to spend that much time on something and do it for a long time, it can often pay off. It's just a, there's a lot of friction, and a lot of people drop off along the way. So if you can stick with it, that counts for a lot.

• 22:04Speaker 03

  I want to turn to the book. Habits is an interesting thing, because it's one of those that we often have, just part of who we are, but don't necessarily think about it. And I thought it might help to break down, like, what was your simple definition of what a habit is?

• 22:20Speaker 02

  There are a couple of different ways you can describe it. The technical definition of a habit is a behavior that's repeated enough times to be more or less automatic. So it's those things that you do kind of mindlessly. And like you said, we're building them all the time. And this is one of the things that makes habits so important, I think. You don't get to decide. Your brain is automating whatever it can to save energy and to conserve effort wherever possible. And so you're going to be building habits whether you want to or not. And if that's true, the next step, I think, is like, well, you might as well be a little more in control of the process, right? You might as well be the architect of your habits and not the victim of them. A lot of people feel like they're the victim of their habits. Like, oh, I just, I didn't even realize I was building these things.

• 23:01Speaker 02

  And now I bite my nails, or I snack too much, or I like watch so much TV, or I look at my phone all the time, or whatever it is. And they don't, didn't even realize that habit was getting established. So that's one way to describe what a habit is. But there are a couple of other definitions of a habit that I think are useful, too. Like, one way to define a habit is that it's the solution to recurring problems in your environment. I really like that definition. I think Jason Maria was the one who came up with that. And basically, the point that that's trying to get across is, you go through life, and there are a variety of problems for you to solve on a daily basis. Like, let's say you get done with work at 5:00 PM, and you feel stressed and exhausted. Well, that's a problem

• 23:44Speaker 02

  that needs to be solved. And for one person, they might solve it by playing video games and just chilling out for an hour. For another person, they might solve it by drinking a glass of wine. For a third person, they might solve it by going for a run. And you can see pretty quickly that all of those habits solve the same underlying problem, but some of them are more productive, or healthy, or useful than others. And nobody's going to be perfect with this. We all go through life. We go through childhood and our early adulthood. And we sort of soak up these solutions to the recurring problems in our environment. And we aren't always thinking about it. And you turn around, you're 25, or 35, or 45, and you've got these habits that you've kind of been relying on to solve those problems. And some of them you inherit from your family and friends, and some of them you just sort

• 24:28Speaker 02

  of stumble into. But at some point, once you become aware of that, once you realize, oh, these are the things that I do consistently to solve those problems, it becomes your responsibility, even though it wasn't necessarily your fault, that they got formed. And once you realize that it's your responsibility, then it becomes time to take ownership and try to figure out, is there a healthier solution to this recurring problem? So I like both of those definitions of a habit, and I think it reveals different things. But the practical takeaway, I think, is that you're building them anyway, so you might as well take ownership over them. And you're going to stumble into some that aren't that helpful, which is fine. You don't have to blame yourself for it. But it does become your responsibility to fix it or to improve it.

• 25:11Speaker 03

  So as you mentioned earlier, how do you take that from the what to the how?

• 25:16Speaker 02

  I think understanding that habits are important, and understanding the crucial role they play in our lives is a good starting place. But at some point, you have to operationalize it. And I like to use a framework for it in the book, where I kind of have four different steps. And so from a real high level, if you want a good habit to stick, you roughly want four things to happen. The first thing is, you want the good habit to be obvious, because the more obvious or available or visible a habit is, the more likely you are to take action on it. The second thing is that you want it to be attractive. So the more that you expect the outcome to be good, or the more appealing something seems, the more likely you are to feel motivated to do it. The third thing is that you want it to be easy. The easier, more convenient, frictionless your habits are, the more likely

• 25:59Speaker 02

  you are to perform them. And the fourth thing is, you want it to be satisfying. The more satisfying or enjoyable a habit is, the more you kind of have this positive emotional association with it, the more you want to come back to it and repeat it again next time. And so I call those the four laws of behavior change. Make it obvious, make it attractive, make it easy, make it satisfying. In the book, I break down those, practical ways to do each of those. But that's kind of the high-level framework on, okay, I know good habits are important. How do I actually get a good habit to stick? Make those four things. Obvious, attractive, easy, satisfying.

• 26:32Speaker 03

  Why don't you go ahead and dive into each?

• 26:34Speaker 02

  So making it obvious is mostly about the cue. The cue is something that precedes a habit. So whenever your phone buzzes, that's a physical cue or tactile cue. Your phone's vibrating in your pocket, that starts the habit of pulling your phone out and checking it. Or an ambulance drives down the street, and you hear the siren. That's an auditory cue that starts the habit of pulling to the side of the road. Or you see a plate of cookies on the counter. It's a visual cue that starts the habit of eating a cookie. So you can see that it works the same way for good or bad habits. But the practical strategy is, you want to make the cues of your good habits as obvious as possible. Rather than having the cookies on the counter, let's put fruit and nuts there, or something that you want to actually eat. And then let's take the stuff that are snacks, or sweets, or that

• 27:17Speaker 02

  you don't want to eat as much, and make those less visible. Put them on the highest shelf in the pantry, or the bottom corner of the fridge. And you can apply that idea to a bunch of different things. So for example, with my bad habits, rather than making it obvious, I want to make it invisible. And so one of the habits that I've been trying to follow recently, is I take my phone, and I leave it in another room until lunch each day. Now, I can't do it all the time, but I can do it most of the days, 95% of the days. And what's funny to me is, if I have my phone next to me, I'm like everyone else. Like, I'll check it every three minutes, just because it's there. But if I leave it in another room, I have a home office, so it's only 30 seconds away, but I never go

• 27:59Speaker 02

  and get it. And so I'm like, well, did I want it or not? When it's next to me, I wanted it badly enough that I would check it every three minutes. But when it's 30 seconds away, I never want it so bad that I'll go get it. And you'd be surprised how many habits work like that. Where if you add a little bit of friction, or if you make it a little more obvious, or a little less obvious, the behavior changes entirely. And so I think that question of, what habits am I making obvious in the workplace, in my kitchen, in my living room? What are the most visible or available things? Can I redesign that environment so that it serves me, rather than hinders me? So that's the core idea behind making it obvious, or in the case of bad habits, making it invisible.

• 28:38Speaker 03

  And how about attractive?

• 28:40Speaker 02

  So I think a good example for this, let's say you're like, all right, I listened to this guy talk about habits today. So tomorrow I'm going to wake up early and I'm going to go for a run tomorrow. It's going to be the day. So you set your alarm and you set it for like 6:00 AM or something, 6:00 AM rolls around and your bed is warm, it's cold outside, like, well, I'll just press news and sleep in maybe tomorrow. But if you rewind the clock, come back to today and you send a text to a friend and you say, hey, can we meet at the park and go for a run at 6:15? Well, now 6:00 AM rolls around and your bed is still warm and it's still cold outside, but if you don't get up and go for a run, you're a jerk because you leave your friend at the park all alone. So suddenly what you've done is you haven't made the habit easier. It's still just as hard to go for a run.

• 29:25Speaker 02

  But you have made it more attractive. You have simultaneously made it more attractive to get up and go for a run and less attractive to press news and sleep in. And that little strategy where you change the calculus going on in your head so that it bears an immediate cost. That's what scientists refer to as a commitment device. And I give a bunch of examples of commitment devices in the book, but it's just one way to make the habit a little more appealing than it was otherwise.

• 29:52Speaker 00

  I'm curious what the difference is in some sense between obvious and easy.

• 29:55Speaker 02

  Yeah, it's a good question. And I often find myself feeling like they overlap in meaningful ways. But making something obvious does not necessarily mean scaling it down, which is a part of what making it easy does mean. So for example, you could make doing yoga obvious by setting your yoga mat out in your living room so that you can see it every time you go in there. So that's making it obvious. It's visible, easy to see, easy to remind yourself to do it. But it doesn't necessarily make the yoga workout easier. So one of the ways to make something easy is to scale it down. And I like to recommend the two minute rule. So to use both of those strategies, you would say, all right, I'm going to set the yoga mat in the corner of the living room. Going to make it obvious. I can see it, remind myself to work out each day.

• 30:39Speaker 02

  But then I'm also going to make it easy by using the two minute rule, which basically says, whatever habit is you're trying to do, you scale it down to something that takes two minutes or less. So rather than say, I'm going to do a 45 minute yoga workout, you say, I'm just going to roll out the yoga mat and I'm going to do the first pose. And that strategy of making it easy and layering that on top of making it obvious, I think increases the odds that you're going to do it. Because making it easy, it makes the habit less intimidating. In the words of Leo Babauta, it makes it so easy that you can't say no. Like you can say no to doing a 45 minute workout. You're like, I don't have time or don't have the energy. But anybody can roll the mat out and do one pose. Like you don't really have a good excuse for that. And so the two minute rule helps you get over that hump and get started.

• 31:25Speaker 02

  And sometimes when I tell people about that, they resist it a little bit because they're like, all right, buddy. I know the real goal isn't just to do one pose. I know I'm actually trying to do the workout. So if this is some kind of mental trick, then why would I fall for it? Basically. I get where people are coming from, but one of my favorite stories in Atomic Habits is this guy named Mitch, who ended up losing over a hundred pounds. And for the first six weeks that he went to the gym, he had a rule for himself where he wasn't allowed to stay for longer than five minutes. So he'd get in the car, drive to the gym, get out, do half an exercise, get back in the car, drive home. And it sounds ridiculous, right? You're like, okay, obviously this is not going to get the guy the results that he wants. But what you realize is that he was mastering the art of showing up.

• 32:09Speaker 02

  He was becoming the type of person that went to the gym four days a week, even if it was only for five minutes. And I think that this is like a deep truth about habits that people often overlook, which is a habit must be established before it can be improved. It has to become the standard in your life before you can scale it up and optimize it into something more. And so make it easy is all about that. It's not saying only do the easy thing. Like you can still do very hard things or work toward very ambitious goals. But it is saying, make it as easy as possible to do the thing that matters. Make it as easy as possible to master the art of showing up. There's a quote from Ed Latimore where he says, the heaviest weight at the gym is the front door.

• 32:50Speaker 02

  And it's kind of that idea. How can we make it as easy as possible to open the front door and then let the next step follow?

• 32:56Speaker 00

  You mentioned something in saying that really tied to identity. So Mitch is the kind of person that goes to the gym. Is that a mind trick compared to the actual habit and pattern of doing what you want to do to form the right habits?

• 33:11Speaker 02

  Well, I think in the, possibly in the short term, it could be a, you know, a little mindset shift. But in the long term, I think it's really the thing that we're trying to achieve. It's the result that we're really hoping for. So I refer to this in the book as identity based habits. And the idea is that ultimately true behavior change is really identity change. We think that what we're trying to shift is the results or the outcome. If I could just have more money in the bank account or a lower number on the scale or more employees at the company or whatever it is, then I would be happier. Then I'd have the results I want. But actually the outcome is not really the thing that needs to change. It's the story that we're telling ourselves about who we are. It's the identity that we or our team or our culture or whatever that we have.

• 33:56Speaker 02

  And I think this links directly to our habits because every action you take is like a vote for the type of person you want to become. And so the more that you show up and perform a particular habit, the more you're casting votes for that type of identity. And I think this speaks to the power that small habits can have. Like, no, writing one sentence does not finish the novel, but it does cast a vote for, I'm a writer. And no, going to the gym for five minutes does not radically transform your body, but it does cast a vote for, I'm the type of person who doesn't miss workouts. And in the short term, on any given day, that doesn't mean a whole lot. You're not going to have radically different results. But in the long term, adopting that identity of, I'm the type of person who doesn't miss workouts

• 34:41Speaker 02

  or I'm the type of person who finishes what I start, or I am a runner, I'm a meditator, I'm a writer. Once you start identifying yourself in that way, you're not even really trying to convince yourself to do the habit anymore. You're just showing up and doing it because that's part of who you are and part of what you do. You got a lot of people who like work toward running a half marathon because they think, oh, this will be a cool thing, a cool challenge, a goal to have. But then after the race, they stop training and they turn around and it's been like three months, like, man, I need to sign up for another half marathon day. Like get myself out there and get running again. And then you have other people who they just identify as, I am a runner. And so they can run the half marathon too. Well, once the race gets over, they're running again a week or two later because that's just part of who they are. It's what they do. They're a runner.

• 35:26Speaker 02

  And I think ultimately that's what we're looking to do is to try to instill or encourage a new identity. And small habits are one of the best ways to do that because they cast these little votes for that story.

• 35:40Speaker 00

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• 36:23Speaker 00

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• 36:58Speaker 00

  As that builds and the word compounding obviously comes to mind, eventually you get into this satisfying. Or is that something the satisfying you're trying to accomplish early on with the small habits?

• 37:08Speaker 02

  Well, so I think you can think about it on a short term scale and a long term scale. So in the short term, you want your habits to be immediately satisfying in the same way that eating a donut or eating a cookie is immediately satisfying. The reason we keep repeating that is because whenever you take a bite of the donut, it's like, wow, this is sweet, sugary, tasty, enjoyable. You have this immediate satisfaction with the result. And I should just say as a brief sidebar, I think this is a good way to define or distinguish the difference between what is a good habit and what is a bad habit. Pretty much all behaviors produce multiple outcomes across time. And so for bad habits, the immediate outcome is often pretty favorable. Like I said, a donut is sweet and sugary and tasty.

• 37:49Speaker 02

  But the ultimate outcome, if you keep eating donuts for a year or two years or whatever, is unfavorable. Same thing even for like smoking a cigarette, like the immediate outcome of smoking a cigarette might be you curb your nicotine craving or you reduce stress or you get to socialize with a friend outside the office. It's only the ultimate outcome that's unfavorable. But with good habits, it's usually the reverse. The immediate outcome of going to the gym for the first week. It's kind of unfavorable. Your body looks basically the same in the mirror. The scale hasn't really changed. If anything, you're sore. And it's only the ultimate outcome, a year or two later, that is what you're looking for. And so the cost of your good habits is in the present. The cost of your bad habits is in the future.

• 38:30Speaker 02

  I think that difference in time preference, or that difference in how behaviors pay off in the long run, is a good way to distinguish the difference between a good habit and a bad habit. And it also reveals this kind of fourth law, this idea of making it satisfying. It reveals the importance of having some immediately satisfying element to your good habits. Because they often don't have that. They pay off for you in the long run, but they don't serve you right now. And so you can do this in a variety of different ways. One of my readers, he and his wife wanted to start cooking more at home and eat out less. But the problem with not going out to eat is it's not very satisfying. You just sort of miss out on a meal that you were excited about having.

• 39:12Speaker 02

  And so the strategy they came up with was every time we stay at home and cook, we're going to transfer 50 bucks or 100 bucks into the savings account that we're going to label trip to Europe. And so at the end of the year, they took all that money that they had saved up and they put it towards the trip. But on any given night, they get some immediate satisfaction where, okay, we don't get to go out to eat, but we do get to see a hundred dollars go into the savings account and immediately see the vacation budget bump up. And so you got to find little strategies like that that make your good habits immediately satisfying in the moment. In the long term, the way to make it satisfying is by building that identity. But in the short term, you can use some other strategies.

• 39:52Speaker 03

  So in between the short term and the long term, I imagine anyone who's trying to form new habits, break bad habits, runs into obstacles. And I'm curious, kind of what are the common obstacles people will run into?

• 40:05Speaker 02

  Yeah, you can define this in different ways. Sometimes broadly, I think there are really only two things that people struggle with habits. The first one is getting started, and the second one is sticking with it. So getting started, a lot of the strategies that we've talked about, like environment design, or scaling it down, using the two-minute rule and so on, that can be helpful for that. Sticking with it is interesting. I'll give two strategies that I think are helpful for this. The first is, it's very hard for behaviors to stick if you're not part, don't have some like, social element working for it. And you don't have to do it in some really strategic way where you're like, oh, I have an accountability partner and they text me or whatever. Like, it doesn't have to be that formalized.

• 40:46Speaker 02

  But what you often see with any behavior that really lasts for years or decades, there's often a social component associated with it. So say, for example, you move into a new neighborhood and you walk outside and you see your neighbors mowing their lawn. And you're like, oh, I need to mow the lawn and trim the hedges and spruce up the yard. And people will stick with that habit of cutting their grass for decades. As long as they live in the house, they will do it. We wish we had that level of consistency with some of our other habits. But if you wonder why do they do it, partially, it's because it feels good to have a clean lawn. But mostly, they do it because they don't want to be judged by the other people in the neighborhood for being the sloppy neighbor.

• 41:27Speaker 02

  And so it's actually the social expectation, the social norm, that gets that habit to stick. And you see this happen with all kinds of stuff. You walk onto an elevator, everybody turns around to face the front. No reason it has to be like that. You could face the back, but that would be weird. You'd be the one doing the different thing, and so the social expectation gets us all to perform that habit every time. I could be giving this interview in a bathing suit, but that would be strange because it would violate our expectation for what I should be wearing. So all kinds of stuff, from what we wear, to how we act, to how often we cut our grass, is socially reinforced. And I think the punchline to this, if you want to make it practical for your habits, is

• 42:07Speaker 02

  you want to join a group, you want to join tribes, where your desired behavior is the normal behavior. Because if it's normal in that group, it's going to become very normal and reasonable for you to stick with it in the long run. And then the second strategy that I'll mention is a more tactical one, or something you can do on your own, which is, having a habit tracker is a little thing, but being able to mark down that you did a habit and building up a streak is a good way to kind of help encourage yourself to be consistent. So my dad is a good example. He, both my parents, actually, they like to swim. But the problem with swimming is that whenever you get out of the water, his body looks exactly the same as when he jumped in. And so he has no evidence that that workout was worth it.

• 42:49Speaker 02

  And so what he does is he takes out a little pocket calendar and he puts a little X on that day. And then he counts up the X's for each month and compares that to the month before. And it's a small thing, but that X gives him a signal of progress. And that's really what the punchline of this strategy is. You need ways to visualize your progress, because one of the most motivating feelings to the human mind is the feeling of progress. And if you keep making it, you have every reason to continue. And so habit tracker is a good way to encourage yourself to do that and encourage consistency.

• 43:23Speaker 03

  I want to turn a little bit and talk some about how both the book itself and what you've learned have applied in your own life. What habits have you formed that came out of publishing the book?

• 43:36Speaker 02

  Well, the one I mentioned earlier about leaving my phone in another room, that's one that I've started to do more consistently since writing the book. What I really like about Atomic Habits, though, and what I try to do with all of the writing, any article that I make or tweet, I try to only write about things that I have to practice in real life. Because I think there is a potential danger in these kind of new age content creators becoming sort of new versions of academics in an ivory tower, where you just share ideas all day, but you don't actually have to implement them. And there's that quote that, in theory, there's no difference between theory and practice, but in practice, there is. And I think there's a lot of truth to that.

• 44:18Speaker 02

  The fact that I had to build a writing habit in order to write the book, that's good, because that forces me to see how hard it is to build a habit. The fact that I use the ideas in the gym when I do strength training each week, that's good, because that forces me to wrestle with, does this strategy actually work or not? And a lot of the environment design strategies that I mentioned earlier, those are all designed to encourage me to watch TV less, or encourage me to do productive things more. Just little things like that. Individually, none of them make a radical difference, but collectively, they all sort of make the good habit the path of least resistance. And I think the larger point is that by having to live out the ideas, I think it actually makes the writing better.

• 45:00Speaker 02

  I heard a great line recently, which is, "Practice sets a high bar for truth." And I resonate with that. Like, there's, it's hard enough to have a good opinion, a well-informed opinion, but at the end of the day, anybody can have an opinion. Anybody can write about it. There are many fewer people who can actually do it, who implement the ideas. And so by practicing them, you set a really high bar for truth and you probably guarantee that the ideas will be better when you do share them and write about them.

• 45:27Speaker 03

  So not too long ago, you started this 3-2-1 email on Thursdays, and I'm kind of blown away by the consistency of, say, the three ideas that come from you. And you mentioned a spreadsheet of 850, and I'm curious what habits or what process you've built to figure out, like, what all of these really interesting ideas will be each week?

• 45:50Speaker 02

  Thank you. I hope I can stick with it. When we started, I did have this little fear where I was like, I don't know if I can come up with this many. I think a lot of shots on goal is an important part of it. So I'm going to share three ideas each week, but that might mean I need to write 30. I'm not good enough to just write three and have them be good. And so then the next question is, all right, how do I do that? How do I have a lot of shots on goal? And for me, there are probably two things that really work in my favor, and I don't know if it works for everybody, but one is, it kind of is just fun for me. Like, I've sort of been playing with sentences, essentially, playing with words. And Twitter makes that easy to do and gives you sort of social rewards for it.

• 46:34Speaker 02

  My only objective with Twitter is I try to share one tweet a day. I don't always do it. I try to send one a day. And it's a way for me to get feedback and see like, oh, what resonates with people, or you know, what doesn't. So that's like one way to potentially test the ideas. The other thing that works really well for me is whenever I'm reading, or even just in daily life, conversations, usually books or conversation are the two places that most of the ideas come out of. And I'll read a sentence that I'm like, oh, that's a good point. I kind of like that. And then I'll try to either apply it to a different industry. So I'll write about the principles the same, but I'm going to write about it in a new context. Or I'll take the format of the sentence and I'll try to apply it to a new topic.

• 47:15Speaker 02

  So, for example, there's a great quote from Claude Shannon where he says, "Information is the resolution of uncertainty." So you're like, oh, that's interesting. If you're uncertain about something, and then that uncertainty gets resolved, what you've gained is some piece of information. So I took that format, "Information is the resolution of uncertainty", and I just tried to almost create like a Mad Libs situation with it. So it was like, blank is the blank of blank. And I'd tried a couple of different things, but I was like, all right, I'll try it with writing. And so I put writing as the topic. So it's like, writing is the blank of blank. And I just tried a bunch of different things. And eventually, what I came up with is, writing is the antidote to confusion. So you're confused about something, you write about it, and then you remove that confusion.

• 48:00Speaker 02

  So that is a different sentence than "information is the resolution of uncertainty", a different topic, but the sentence struck me in a nice way. And so I was like, oh, well, maybe I'll try that format out and see if I can come up with something interesting with that. So I do a lot of that. Like I said, that's basically just playing with sentences. And if I do that enough, if I get enough shots on goal, then I can usually come up with three good ideas.

• 48:21Speaker 03

  And do you have a process for kind of storing all these things that you read or hear in conversations?

• 48:27Speaker 02

  I don't really have a good process for storing what I read or what I hear in conversation. Honestly, the way I think about it is it's almost like a bunch of layers of Swiss cheese or something and you've got like four or five layers and you try to get them all lined up. And eventually, every now and then, there's an idea that goes through the whole of every layer and makes it all the way through. It's just kind of like having filters. So, the very first filter is choosing what you're going to consume. And I think that this is actually a much deeper, bigger, more important choice than most people realize. Almost every thought that you have is downstream from what you consume. And so, when you are choosing who to follow on Twitter, or Instagram, or whatever, when you're choosing what books to read, what news station to watch, or what articles to

• 49:11Speaker 02

  read, you are choosing your future thoughts. And most people don't put that much weight on it. They don't think about it as being that important. But I think curating your information sources is one of the most important choices you can make. So that's the first layer. Then, you've got this high-quality, high-signal source of information coming to you. So now, you've got all this information you're consuming, Twitter feed, Instagram feed, books you're reading, et cetera. And for me, I'm like, well, a lot of this information is good. I've already tried to curate it, but what are the best ideas from that? And so now, I'm trying to even pin it down even further. And so, I don't really save everything I'm reading or anything, but I do try to save the best bits. Usually, I just save it to Evernote, or I make a little note of it on Google Doc that I'm working on.

• 49:56Speaker 02

  So essentially, what I'm trying to do is I'm trying to make everyone else's best ideas my baseline. I'm trying to make that my starting material. And then, once I've got all that stuff together, then I'm trying to find ways, how can I build off of this? How can I integrate it? Can I come up with an example in a different industry? Can I find different ways that these ideas connect that I hadn't thought about before? And so, that's maybe the next layer. So you kind of got these two, three, four layers that you're going through, and eventually, you spit out some good ideas on the backend.

• 50:22Speaker 03

  So I'm curious about two, let's call it habits, why not? That kind of apply to my world of investing. And the first is, you're in a seat at this point in time where a lot of people may reach out to you, where what you're saying is resonating with a lot of people. And I've noticed from our communications over time, you were on email, you're not really on email, there are certain ways I've been able to find you, but some ways I can't. How have you thought about managing your time when you're facing a large audience?

• 50:52Speaker 02

  Yeah, a couple of different thoughts here. I mean, first of all, I just think part of it comes with the territory. So it's a good problem to have. If you're growing, then you get a lot of inbound communication, and that's a very flattering and very great thing. And mostly, I'm just happy people are finding the ideas useful. You should consider it a minor miracle that anybody cares about what you have to say. It's a good problem to have. That said, I have made a lot of mistakes, and it's very hard to come up with a good solution to it. The first 10,000 subscribers to my email list, and that happened over the course of months, I emailed each of them and said, hey, welcome to the community, like, thanks for joining, you know, I'm excited to have you here, I'll send out new articles soon. And just a welcome message. And then, at some point, you get to the point where you can't do that anymore.

• 51:34Speaker 02

  And so then, I stopped emailing people proactively, and I just answered emails as they came to me. And you know, I stuck to that for a while. And then, at some point, you get, you know, like now my list is in the hundreds, thousands, and you're like, okay, can't do that anymore. So then, now, we're about to cross a million subscribers, and so I gotta do new things where it's like, well, not only can I not just respond to some emails, like, I kind of gotta be out of that inbox entirely, because there's just too many messages coming in. I can't even do useful stuff in there anymore, like, reaching out to someone that I need to talk to, or whatever. So that's the first thing, is like, you'll probably make a lot of mistakes, and it's gonna have to change over time. But the second thing, and this little sentence has stuck with me, I wrote an article about it at one point, but there was this Microsoft executive, I think his name's Steve Hanselman,

• 52:16Speaker 02

  he said, "Email is where keystrokes go to die." And I was like, that's interesting. And what his point was is, if you wanted, you could measure your life in keystrokes. You only get a certain number of times where your finger gets to hit the pad. And that number is finite. And so, every time you spend a keystroke on an email, that's a keystroke that is only being sent to one person, that if you had chosen to use that keystroke writing a book, or writing a tweet, or writing an article, you could have reached 10,000, or 100,000, or a million people. There are higher-leverage ways to use your keystrokes. And so, for me, I'm trying to focus on as high-leverage of a way as possible. All right, let's use those keystrokes writing a second book, rather than responding to 100 emails.

• 53:01Speaker 02

  And the person who sent me the email, they can read the second book, but so can a million other people. And so, it's becoming more useful to more people. The other thing that I try to remind myself, because I still feel guilty about not being able to get to all of it, or like Instagram messages, like, I have a bazillion Instagram DMs, but I just, I don't respond to any of them, I just can't check them. That's the other problem with all these different services, is that you start to actually have like 10 email inboxes, you have like an inbox on Twitter, you got one on Instagram, you got one on email, now suddenly, you're expected to respond everywhere. So, I do feel guilty about that, but what I try to remind myself is, the only reason anyone is sending you a message to begin with, is because you did the high-leverage keystroke thing, because you wrote the book, or because you wrote the article.

• 53:44Speaker 02

  So what people actually want is that higher-leverage work, and that's why they're reaching out to you. So just do more of that, that's a good way to serve a wider group of people.

• 53:54Speaker 03

  In a lot of the investment work, there's a fair amount of evaluation of other people. And I'm curious, how do you think about evaluating or recognizing the habits in others, both good and bad?

• 54:08Speaker 02

  I don't really think about it that much. I guess I think about it in the sense that I try to observe it, so that maybe I can learn something. I'm watching my own habits, I'm watching my family members, or the people around me, or just someone on the street walking by, and you're like, maybe you can learn something from that. You know, it's just trying to like, keep your eyes open, essentially, and like, see the world clearly. So I do that kind of thing, but I don't really think about evaluating the habits of others, because I don't really think it's my job to do that. There's this funny thing that happens where, sometimes people will be talking to my wife and I, and say something to her, like, oh gosh, is he just like so annoying to like have around, is he always like judging your habits or talking about stuff? And we always laugh, because I don't think I've really ever said anything about it, and I don't even really think about it, because I don't think it should be that.

• 54:53Speaker 02

  Like, that's not my job, you know, it's not my role. And nobody wants to be around someone like that. And actually, what I hope is that that feeling comes through in Atomic Habits. Sometimes, my favorite feedback on the book is that, oh, like, you know, I really liked it, most self-help books are so judgmental, or like finger-waggy, or feel like telling you how to live your life. And I've tried very hard to not make the book like that. It's not my job to tell you how to live your life, and it would be ridiculous to think that I could do that well, because I don't know your circumstances, don't know your priorities, and all kinds of other stuff. All I'm really trying to do is to share a toolkit, and say, hey, if you need a wrench, here's one that you could use. And if your life is different, and you need a hammer, then here's another strategy, and

• 55:38Speaker 02

  maybe you should try that. And I think it's more about empowering the reader than telling them the way that they should live their lives. So, hopefully, that comes through, and hopefully, I'm able to do that in a good way. But I think, to answer your question, it doesn't really cross my mind to, yeah, like, evaluate others that often.

• 55:56Speaker 03

  What's your next big project?

• 55:58Speaker 02

  Yeah, very lucky that the project's gone well, it's great. I'm trying to compartmentalize it a little bit, and just be like, okay, Atomic Habits is a great thing, it was a good project, and it can like be its own thing, let it do its thing. It doesn't like win me any awards, or like mean that now I don't have to share good ideas or anything, and it's kind of like, okay, let's move on, like, how can we continue to do great work? So, I am working on a second book, so that's definitely a big project. Depending on how you measure it, Atomic Habits took anywhere between three and five years, so these things take me forever to work on, so who knows how long the second one will take. I'm sure my publisher, if they're listening to this, is cringing right now, and being like, please don't take five years. So hopefully, that'll go smoothly. I am actually toying with the idea of a podcast, so that'll be something to explore next year,

• 56:43Speaker 02

  and see how that goes, so that could be fun. But in the short term, I'm very focused on the newsletter, and I just want to continue sending useful, interesting, compelling messages each week, so that'll keep me busy, and then I've kind of got those two big projects, kind of, that I'm working on in the background.

• 56:58Speaker 03

  Any tips on what book number two is going to be about?

• 57:02Speaker 02

  Well, I already wrote my habits book, so I feel like that's basically everything useful I can say on that topic. I'm not just going to keep writing about habits, but I do think I want something that like plays nicely with habits or that works well with it. And so I've been thinking more about what are the main levers or pillars of living a good life or of like driving our results in life? And I think habits are certainly one of them. I think luck and randomness is certainly another piece. And then I think if we put a third one in, we would probably say it's like your strategy and your choices. So by definition, luck and randomness are not under your control. But if you can get the other two under your control and do a good job with your strategy and choices and your habits and actions, then often you put yourself in a pretty favorable position to get a few good bounces.

• 57:47Speaker 02

  And so I'm thinking more about that final category, that category of like strategy, choices, decision making, and kind of how to combine good strategy with good habits. Cause that's one of the questions you could have after you finish Atomic Habits. It's like, okay, great. I know how to build better habits. I know how to get them to stick and last, but which habits should I be building? Where should I be focusing? So it's kind of circling those topics of like focus, attention, strategy, decision making, all that kind of stuff.

• 58:15Speaker 03

  All right, I'm going to ask you a couple of closing questions, but before that, I know this is going to come out just right at the turn of the new year. It's kind of everyone's favorite time to make their resolutions or call them desired habits. So how are you thinking about 2021? And both for yourself and any suggestions for other people looking to make New Year's resolutions?

• 58:35Speaker 02

  Sure. So for me, I find that I'm coming back to the basics. There's sort of a cycle that goes early on, you're like, okay, I should just focus on the fundamentals. And then you're like, all right, I kind of got that handled. So now I should optimize and improve a little bit. And then you get too much in the weeds and too much in the details. Then you gotta remind yourself to come back to the fundamentals. So I'm kind of on that part of the curve right now where I'm like, all right. Really what I need to do is I've spent a lot of time optimizing the last couple of years. I just need to stay consistent on let's write articles, let's work on the next book chapter. Let's publish the newsletter this week. So I'm really focused on just maintaining consistency. I think that's going to be the thing that I'm trying to pull myself back to center on. Because there have been a lot of opportunities that have popped up in the last two years.

• 59:19Speaker 02

  And just those details can start to get you distracted from the stuff that really moves the needle. And if I have any encouragement for other people or just maybe not even an encouragement as much as a different way to think about it. Most of the time when people talk about resolutions or when I hear from people talking about them, it's something like, oh, I want to lose weight or I want to, you know, whatever. They pick like the, these results that they want to achieve. And I think I want to bring it back to what we mentioned a few minutes ago, that it should be more about the identity. Rather than focusing on losing 30 pounds, let's try to become the type of person who doesn't miss workouts. And so that question of for this New Year's resolution, rather than thinking exclusively about the result,

• 1:00:01Speaker 02

  let's ask the question, who is the type of person that could achieve that result? And then let's try to focus on fostering and reinforcing that identity.

• 1:00:09Speaker 03

  Great. All right, James, I'm going to turn to a couple of closing questions. What is your favorite hobby or activity outside of work and family?

• 1:00:16Speaker 02

  I think I would probably say weightlifting. That's probably the one that feels, you know, it's really funny because you have to expend energy when you're working out. But in a psychological sense, it fills me with energy. It's the one thing that I have where I feel like it's just for me. I can leave all the other responsibilities behind. I can leave the work for an hour and I can just do that. And so much so that I almost feel like if I didn't work out, I don't even know that I would have a business anymore. Because I think the roller coaster ride of entrepreneurship, especially those early years, it just would have got to me too much, you know? I needed something to keep me balanced. There are a bunch of others too. Like I said, I'm really into travel, so I'm like weirdly into optimizing the best travel bag. I love the outdoors and like hiking and stuff.

• 1:01:00Speaker 02

  So just getting out and moving around in nature. My grandparents owned a farm when I grew up. So like basically my whole childhood was running around in the fields and stuff. And so I like to do that whenever I can.

• 1:01:09Speaker 03

  What's your most important daily habit?

• 1:01:13Speaker 02

  It's so hard to answer this because of how things work. So like, let me give you an example. I think I could make an argument for sleeping eight hours a night. That I could say that's it. Because if you don't get good sleep, everything else is downstream from that. And you're the whole rest of your day is screwed. And so the interesting thing about this, and this is actually one of the ideas that I'm kind of working on for this second book, is that success is rarely the result of one thing, but failure can be. So sleeping eight hours a night is not going to make you successful on its own, but not sleeping at all can make the next day a failure. And so to say that it's the most important habit in my life sort of dismisses the fact that success is usually a recipe of multiple ingredients.

• 1:01:57Speaker 02

  And like, I both need to sleep well. And another one that I thought of answering is reading. Because like I said, every thought that you have is downstream from what you consume. And I essentially get paid for the quality of my thoughts. And so we could say, well, reading is actually very important for your business. Because if you don't have good ideas, you don't have a business. But again, that kind of dismisses the fact that, well, you could also say writing. Because like, if I don't publish, then the ideas don't get out there. So you see where I'm going. It is interesting to me that if you remove any link in that chain, if you don't sleep or you don't read or you don't publish, the whole thing falls apart. And so success is like the mix of a variety of ingredients and the absence of anything that would ruin the mixture.

• 1:02:42Speaker 02

  And so you kind of have this whole recipe that you need to follow. But for the sake of the question, I'll say sleep.

• 1:02:48Speaker 03

  All right, what's your biggest pet peeve?

• 1:02:50Speaker 02

  I don't have a ton of things that bother me, but I will say something that keeps coming up again and again with me is when people do things in an unthoughtful way. It just drives me nuts when you get a product that it clearly was not like, when you use a product and then you're like, did they test this? Like, did they actually use it? Or did they just like design it and then they manufactured it and then they sold it? Because as soon as you use it, you start to see so many different ways in which it could be designed better or more thoughtfully put together. There's a house in our neighborhood that we walk by and it's on the corner. And the lot faces north. So you're not going to get a ton of sun because the southern facing side of the house is where you get most of the sun, at least in our hemisphere.

• 1:03:35Speaker 02

  Well, the house is designed so that all the windows are on the northern and western sides of the house. And I'm like, well, this is like, they have these huge, beautiful bay windows that are facing north. So they never get any light. And that's the one where I look at it and I'm like, whoever built this house did not think this through. Like, why would you arrange it like that? And there are so many things like that where I'm just like, what the world needs is more people who are thoughtful, more people who like really care about getting it right. And in a way, I almost feel like that answer or that approach of just wanting to get it right, that alone can be enough to put you in like the 90th percentile of most industries. I've been listening to a lot of Maggie Rogers recently. She's a musician.

• 1:04:19Speaker 02

  She has an Instagram post where she takes, she's got this, one of her songs, one of her popular songs. She found her notes on it and different things that she was trading back and forth with the producer on how to improve it. And it was just such a cool Instagram post to like, see these screenshots of her different notes. Because she was talking about the most minute things that the average listener wouldn't think about at all. Like, oh, maybe we should bring the cymbal in half a beat earlier. And like, she's got all these different things like that. And you see how much she cares about getting it right. You know, she can't, for her to be a musician and to put that music together, she can't not do it that way. And when I see stuff like that, I'm like, yeah, no wonder she's great. You know, no wonder she's popular. No wonder her music is amazing.

• 1:05:01Speaker 02

  She cares so much about getting it right that it's almost like she doesn't give herself a choice, but to produce something exceptional. And I don't know, it just, this is maybe just how I'm wired and you know, different people want different things. So I'm not saying everybody should feel the way I do about it. But for me, I'm like, why would you want to do something except to do it in an exceptional way? And so if you don't care about doing it right or getting the details right, I just don't know why you would want to spend your time on it. And here I am, consuming the time that people spent on these other products and they didn't care about getting it right. So I guess I've ranted about this enough that obviously it is a pet peeve. So I will go ahead and say that's my answer.

• 1:05:37Speaker 03

  All right. What teaching from your parents has most stayed with you?

• 1:05:40Speaker 02

  I will say, I have been very fortunate to have two great parents. That's a huge bit of luck and randomness in my life that I think has served me really well. But I can think of like two things at least. One is throughout my childhood, whenever I had a big test or had a big, usually it was a big game. If I was talking to my dad about it beforehand. And if I was feeling nervous before I would go out and pitch or before a basketball game, he would always tell me, trust your preparation. And it did help a little bit to calm the nerves and remind yourself like, listen, you've been practicing for this. You've been training for this. It's not just today. You know what to do. You've shot a free throw a thousand times. You can do it when you go out there. But there's a second message baked into that, which is you better prepare.

• 1:06:24Speaker 02

  It teaches you that, yeah, listen, you'll be fine right now. But also the only reason you'll be fine is if you put the reps in ahead of time. So that has definitely stuck with me. I've thought about that a lot. I think about it with the launch of Atomic Habits. People are like, wow, I can't believe how well the book did this first week out. Or, you know, it came out, exploded to this big success. And I look back on what we did and I'm like, man, you have no idea how many reps we put in over the two, three, four years before that. And I'm not talking just about the ideas. Like I recorded 100 podcast interviews before launch day. So, you know, I haven't sold a single copy and all of those are waiting to come out and hit. And so it's like, trust your preparation, you know, like you have to put the work in before. So that's a big one.

• 1:07:07Speaker 02

  And then the second one that I think of, and this is for me as a parent, I think about like, what's the gift I want to give my kids? And probably the biggest gift that my parents have ever given me is that I never had to wonder. My siblings and I have talked about this too. Like, we never have to wonder if we were loved. And that I feel like is maybe the biggest thing that I don't have any baggage around that. Like, I know how much my parents loved me and I know it because they told me it and they showed me it and they were there. And if I can give that to my kids, hopefully that'll be enough. And so just to be present and to make sure that they know they are loved. That's a huge thing that I'm able to carry with me each day.

• 1:07:44Speaker 03

  Great. I got one more for you and then we'll tack on a few more for our premium members. But what life lesson have you learned that you wish you knew a bunch earlier in your life?

• 1:07:52Speaker 02

  There are a couple that I feel like are really important. So the first one is to know what you want. Most people sort of know what they want. They know what they want in a general sense. I want more money. I want to be in a happy marriage. I want to, you know, be lean and fit or whatever, like we generally know. But very few people specifically know what they want in a sense of being able to state exactly what their daily life looks like or what their ideal day looks like, to know what is authentic or genuine for them and their personality. And so to have a good answer to that requires a lot of self-awareness. It requires a lot of introspection. It also, and this is something that I definitely have learned over time. I used to think that a lot of these big decisions, what do I want?

• 1:08:37Speaker 02

  What career should I have? And things like that, what city should I live in, whatever? I used to view those more as like a before and after choice. You make it once and then you're done. But actually, all of those things are processes, not decisions. They're cycles that you go through. And so to know what you want also means to continually revisit that question. And as the world changes and as your priorities change, I'm a very different person today than I was 10 years ago. And so the answer to what do I want is very different. And you should take the time to revisit that occasionally and update what you're doing and what you're spending time on. So that's probably the first big one. Coming directly out of that, once you do know what you want, the phrase that I like is work backwards from magic.

• 1:09:21Speaker 02

  So what is the magical outcome? What is the, the ideal outcome? And then just work backwards from that. And what is shocking, stunning even to me, even after having done it once or twice in my life, is you can pick things that are really bold and ambitious and radical and surprising and untraditional. And you can just work backwards from it. There is often a path to making it happen, which is really surprising. Most people do not work backwards from magic. They work forwards from the status quo. They work forwards from the desires of other people. They work forwards from the expectations of society. But if you really know what you want and you think about the most magical version of

• 1:10:03Speaker 02

  that and work backwards from it, it is shocking how often you can find a way to make it happen. So I guess maybe another lesson baked into that is you can bend the world to your will in a surprising number of cases. But what it requires, this is maybe another lesson, is a lot of focus and commitment. It requires you to be a force of nature. And so you need to know what you want and work backwards from it to develop a plan. And then you need to be focused and be a force of nature about it, to pester, to show up consistently, to be consistent, revisit it again and again. And if you're willing to do that, then you can often make it happen.

• 1:10:38Speaker 03

  That's really fascinating. James, I know it's been a while since we were planning to do this live in June and COVID, but I really appreciate you taking the time.

• 1:10:47Speaker 02

  Of course. Thank you for having me.

• 1:10:51Speaker 03

  Before you hit off, let me ask you two more for our premium subset. What's the biggest mistake you've made and what did you learn from it?

• 1:10:58Speaker 02

  So there's, there are all kinds of mistakes that I've made that are small mistakes that seemed big at the time. So like, I think about the first big webinar that I ever got for my audience. I was just a small fish. I was just starting and this guy had like an audience of 300,000 people. And he was like, yeah, I'll email about it and you can do a webinar with him and sell your product and whatever. And I screwed up a bunch of things. I screwed up the tech. I screwed, the punchline of it is that people essentially couldn't log in until an hour later than when it was supposed to start. And I was expecting for this to be, for me at the time, it's going to be some huge payday. I was going to make like $30,000 or something. And instead, I think like eight people attended and it was just a total flop. And that felt like a huge mistake at the time, but it wasn't in retrospect.

• 1:11:42Speaker 02

  One thing like that rarely makes or breaks you, especially if you just keep showing up. So instead, what I think the honest answer is to the biggest mistake I've made is either, and some of the, this is sort of the same thing, but just saying it in different ways. It's waiting too long to get started. And the main thing about that was waiting for someone to give me permission to work on the thing that I really wanted. I was always good at school and I liked school. And so I thought I needed to follow this kind of academic trajectory where it's like, oh, well, you apply to a program and then people say whether you get in or not. And then the professor tells you what kind of grade you get. And it's all based around permission. But entrepreneurship is not based around permission at all. So by waiting for someone to give me permission to start a business or to launch a product

• 1:12:25Speaker 02

  or to do the thing that I wanted to do, I lost years. And I think, looking back, that's the biggest mistake.

• 1:12:32Speaker 03

  All right, James, I got one more for you. And all this reading and all this information you're consuming, what is your favorite book?

• 1:12:38Speaker 02

  I don't have any one favorite, but I do have a lot of favorites for different things. Like, I love Stephen Hawking's A Brief History of Time, because if he can write about something that complicated, the origins of the universe and astrophysics and things like that, and he can make it easy enough for someone to understand, then I have no excuse for making something like human behavior or habits difficult to understand. So it encourages me to write about my topics in a simple, easy, clear, understandable way. I love Richard Feynman's stuff. Surely you must be joking, Mr. Feynman is an amazing read and it inspires you to be broad and wide-ranging and fun-loving. Like, you don't have to, you don't have to be so serious to be a top performer, you

• 1:13:22Speaker 02

  know, like you don't, you don't have to take yourself so seriously. Like, life can be a joy as well. So I love that. I really like Manual for Living by Epictetus. In my opinion, it's the most accessible of the Stoic works. He just hammers on this point of like, focus on what you can control. And it's surprising how often you need to be told that message. I have been told it many times and then a year will go by and I'll forget it and I need to be reminded of it again. So, so I like that. And then I think I'll also say The Lessons of History by Will and Ariel Durant. Short book, 100 pages or so, you can read it in an hour or two. But it just compresses all of these big insights from across history and shows you sort of those recurring themes.

• 1:14:03Speaker 02

  And as someone who is interested in what doesn't change and someone who tries to write, you know, fairly evergreen topics about timeless issues, I like reading about stuff like that where you're like, yeah, okay. Like, there are a lot of ways that humans are very similar, even though the modern world is very different. And so I like being reminded of that stuff, too.

• 1:14:23Speaker 03

  James, thanks so much. It's really great.

• 1:14:25Speaker 02

  Awesome. Thank you.

• 1:14:27Speaker 03

  Thanks for listening to the show. If you like what you heard, hop on our website at capitalallocators.com where you can access past shows, join our mailing list and sign up for premium content. Have a good one and see you next time.

• 1:14:42Speaker 04

  All opinions expressed by TED and podcast guests are solely their own opinions and do not reflect the opinion of Capital Allocators or their firms. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Capital Allocators or podcast guests may maintain positions in securities discussed on this podcast.