Investing In Our Habits – Ep. 100

Have you ever wanted to do something but getting started was just so hard? Building habits has been an issue with people for centuries as evidenced when Jesus told the weary disciples, “Watch and pray that you may not enter into temptation. The spirit indeed is willing, but the flesh is weak.” Jesus had asked his disciples to pray with him, but they kept falling asleep. Their bodies would seemingly not cooperate.

Recently I read Atomic Habits, a book about how to develop habits and stick with them. The author, James Clear, states early in the book, “We all deal with setbacks but in the long run, the quality of our lives often depends on the quality of our habits.” When we get knocked down in life from a bad experience, how we function day-to-day may be important to how quickly we can recover from a loss. James Clear pictured below.

I love a good goal. In fact, I carry a 3”x5” card in my wallet with my goals for the year listed out. Clear wrote, “Goals are about the results you want to achieve. Systems are about the processes that lead to those results.” He goes on to explain how to create a framework for creating goals.

Clear explained that in order to create a new habit it’s better to have a small goal that you’ll not have to mentally overcome before doing it each time. Here’s what I mean: I may ambitiously set a goal to do a hundred pushups every day.

At first, I may start out strong, but eventually due to the amount of time and mental effort it takes to complete 100 pushups, I’d probably just end up quitting after a few days. As an alternative, I should instead make it a goal to do only ten pushups every day. I can do ten pushups in less than a minute, and because it was only ten, I’ll probably do a few more since I’m already down on the floor.

I’m currently testing the strategy out and have made it a goal to do ten pushups per day. Currently, I’m on a 12-day streak and I’ve averaged doing 26 pushups per day! Sometimes Amelia makes it more challenging by adding her weight!

My takeaway is that it would be better to do ten pushups every day for a year than to do a hundred pushups for five days. Basically put, building good habits takes time, and by focusing on small gains now, it allows us to be better prepared for when big obstacles come our way.

(If you’re looking for practical content on how to be a little bit better tomorrow, I’d encourage you to check out James Clear’s Atomic Habits.)

While it looks all but certain that we are heading into an economic recession, it’s important to consider what positive outcomes may be possible during this time. It’s also important to understand that if we do experience a setback due to market losses, we may be able to recover more quickly if we have good investing habits in place. Part of this habit is developed at the outset with clearly defined expectations on how to or how not to react when the market declines.

I recently watched a video from Craft Ventures with David Sacks (pictured above) about its raising of assets for private investors to place their money in. It mentioned that a couple iconic companies such as Google, Amazon, Airbnb, and Paypal were founded during the early 2000s Dot Com market correction.

Many of us are very familiar with the success of these companies, regardless of what major obstacles have come their way. These companies are prime examples of how having the right habits set in place can set you up for long term success.

Ultimately, what the government is intending to do with increasing interest rates is to bring down the cost for our everyday goods. This hopefully means we’ll soon be paying less for basic necessities like food and gas. The economy tends to slow down during these times which often allows us to gain new perspectives about what’s most important to us in our lives.

With a well thought out, all weather proof financial plan in place, the necessity to fret about a downturn in the economy is lessened. Planning allows us to not have to dream about what we want. It allows us to work toward our aspirations, and that’s exactly what we help our clients do each and every day. Whenever you’re ready to talk more about this, please call us at 864.641.7955.

Until next week,

David C. Treece,

Financial Advisor

864.641.7955

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