Focus on “the aggregation of marginal gains” — the “philosophy of searching for a tiny margin of improvement in everything you do.” By improving little by little every day, over time, you will improve a lot.

Habits are compound interest — both good and bad

“Habits are the compound interest of self-improvement. The same way that money multiplies through compound interest, the effects of your habits multiply as you repeat them. They seem to make little difference on any given day and yet the impact they deliver over the months and years can be enormous. It is only when looking back two, five, or perhaps ten years later that the value of good habits and the cost of bad ones becomes strikingly apparent.”

The slow improvement is both blessing and curse. It means that making progress can be easy: 1% improvement is easier than 10% improvement. And 1% improvement compounds fast. But it also means that bad habits arise without being detected. A 1% decline is easy to write off, but can quickly become a big decline.

“Time magnifies the margin between success and failure. It will multiply whatever you feed it. Good habits make time your ally. Bad habits make time your enemy.”

“Unfortunately, the slow pace of transformation also makes it easy to let a bad habit slide. If you eat an unhealthy meal today, the scale doesn’t move much. If you work late tonight and ignore your family, they will forgive you. If you procrastinate and put your project off until tomorrow, there will usually be time to finish it later. A single decision is easy to dismiss.”

The direction of your habits > the habit itself

“What matters is whether your habits are putting you on the path toward success. You should be far more concerned with your current trajectory than with your current results.”

“That said, it doesn’t matter how successful or unsuccessful you are right now. What matters is whether your habits are putting you on the path toward success. You should be far more concerned with your current trajectory than with your current results. If you’re a millionaire but you spend more than you earn each month, then you’re on a bad trajectory. If your spending habits don’t change, it’s not going to end well. Conversely, if you’re broke, but you save a little bit every month, then you’re on the path toward financial freedom—even if you’re moving slower than you’d like.”

Your outcomes are a lagging measure of your habits. Your habits are today, your outcomes are tomorrow. Want to know your outcomes in a few years? Look at your habits today.

“If you want to predict where you’ll end up in life, all you have to do is follow the curve of tiny gains or tiny losses, and see how your daily choices will compound ten or twenty years down the line. Are you spending less than you earn each month? Are you making it into the gym each week? Are you reading books and learning something new each day? Tiny battles like these are the ones that will define your future self.”

Small wins:

• Accomplish one extra task in a given workday
• Meditate for 1 minute more each time
• Be a little nicer in each interaction. Ask one more question about the other person than you normally would.

Habits are a way to increase your freedom by increasing your self-control

“While my peers stayed up late and played video games, I built good sleep habits and went to bed early each night. In the messy world of a college dorm, I made a point to keep my room neat and tidy. These improvements were minor, but they gave me a sense of control over my life.”

You need to stick with habits long enough to break through the Plateau of Latent Potential

Many people get stuck at the Plateau of Latent Potential:

“It doesn’t feel like you are going anywhere. It’s a hallmark of any compounding process: the most powerful outcomes are delayed.

This is one of the core reasons why it is so hard to build habits that last. People make a few small changes, fail to see a tangible result, and decide to stop. You think, “I’ve been running every day for a month, so why can’t I see any change in my body?” Once this kind of thinking takes over, it’s easy to let good habits fall by the wayside. **But in order to make a meaningful difference, habits need to persist long enough to break through this plateau—what I call the Plateau of Latent Potential.

If you find yourself struggling to build a good habit or break a bad one, it is not because you have lost your ability to improve. It is often because you have not yet crossed the Plateau of Latent Potential.** Complaining about not achieving success despite working hard is like complaining about an ice cube not melting when you heated it from twenty-five to thirty-one degrees. Your work was not wasted; it is just being stored. All the action happens at thirty-two degrees.”

Systems > Goals

Goals are good, but you need a system to achieve your goal. Systems are the processes that lead to your desired results.

Goals have many problems, amongst them:

• Winners and losers have the same goals. The winners have good systems.
• Goals are only a moment of change. A system is every day.
• Goals are short-term, and systems are long-term.

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

“Every Olympian wants to win a gold medal. Every candidate wants to get the job. And if successful and unsuccessful people share the same goals, then the goal cannot be what differentiates the winners from the losers.“

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

To fully embrace a habit, it must be part of your identity

To change your habits, first change your identity.

There are three levels to behavior change:

1. Identity
2. Process (habits / system)
3. Outcome (goal)

Start by defining and clearly picturing your identity.

• You are not somebody training for a half-marathon: you are an athlete.
• You are not a smoker trying to quit: you are a non-smoker.

Once you make this mental shift, you are likelier to have behavior that naturally fits the paradigm.

“The third and deepest layer is changing your identity. This level is concerned with changing your beliefs: your worldview, your self-image, your judgments about yourself and others. Most of the beliefs, assumptions, and biases you hold are associated with this level.”

”Behavior that is incongruent with the self will not last. You may want more money, but if your identity is someone who consumes rather than creates, then you’ll continue to be pulled toward spending rather than earning. You may want better health, but if you continue to prioritize comfort over accomplishment, you’ll be drawn to relaxing rather than training. It’s hard to change your habits if you never change the underlying beliefs that led to your past behavior. You have a new goal and a new plan, but you haven’t changed who you are.”

”The ultimate form of intrinsic motivation is when a habit becomes part of your identity. It’s one thing to say I’m the type of person who wants this. It’s something very different to say I’m the type of person who is this. The more pride you have in a particular aspect of your identity, the more motivated you will be to maintain the habits associated with it. If you’re proud of how your hair looks, you’ll develop all sorts of habits to care for and maintain it. If you’re proud of the size of your biceps, you’ll make sure you never skip an upper-body workout. If you’re proud of the scarves you knit, you’ll be more likely to spend hours knitting each week. Once your pride gets involved, you’ll fight tooth and nail to maintain your habits.“

The opposite is also true, and can create a negative impression of yourself. If you keep saying bad things about yourself (“I am always late”, “I am unreliable”, etc.) then you begin to believe it.

The more you repeat a behavior, the more you enforce the identity associated with that behavior. So even if you are messy, give yourself credit when you make your bed. And then make your bed again the next day. And again and again, noting the identity shift each time.

“Every action you take is a vote for the type of person you wish to become. No single instance will transform your beliefs, but as the votes build up, so does the evidence of your new identity.”

To believe your new identity, you need to prove it. Two steps:

1. Decide who you want to be
2. Prove it with small, consistent wins

You can create a habit with four steps:

1. The Cue: triggers your brain to initiate behavior
2. The Craving: the motivation to act
3. The Response: performing the habit
4. The Reward: a reward for performing

“We can split these four steps into two phases: the problem phase and the solution phase. The problem phase includes the cue and the craving, and it is when you realize that something needs to change. The solution phase includes the response and the reward, and it is when you take action and achieve the change you desire.”

How to Create a Good Habit

1. The 1st law (Cue): Make it obvious.
2. The 2nd law (Craving): Make it attractive.
3. The 3rd law (Response): Make it easy.
4. The 4th law (Reward): Make it satisfying.

How to Break a Bad Habit

1. Inversion of the 1st law (Cue): Make it invisible.
2. Inversion of the 2nd law (Craving): Make it unattractive.
3. Inversion of the 3rd law (Response): Make it difficult.
4. Inversion of the 4th law (Reward): Make it unsatisfying.

“Habits do not restrict freedom. They create it. In fact, the people who don’t have their habits handled are often the ones with the least amount of freedom. Without good financial habits, you will always be struggling for the next dollar. Without good health habits, you will always seem to be short on energy. Without good learning habits, you will always feel like you’re behind the curve. If you’re always being forced to make decisions about simple tasks—when should I work out, where do I go to write, when do I pay the bills—then you have less time for freedom. It’s only by making the fundamentals of life easier that you can create the mental space needed for free thinking and creativity.”

Diderot’s behavior is not uncommon. In fact, the tendency for one purchase to lead to another one has a name: the Diderot Effect. The Diderot Effect states that obtaining a new possession often creates a spiral of consumption that leads to additional purchases.

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