How to develop a habit

A good habit is an amazing thing. It can enable a person to change their life without really even trying. Taking up exercise is a good example. But people find it tremendously difficult to start a good habit. I will start with general principles of successfully developing a habit and then I will translate this into practical suggestions.


Focus on Consistency

The most important principle of developing any habit is that consistency should be your number one goal. The number one enemy of consistency is AMBITION. The more ambitious you are with any habit, the greater your chance of failure. Don’t worry about how much you do. Don’t worry about the quality of what you do. Once a habit is developed those things will almost automatically improve.

Make it easy to Succeed

The reason you fail is because you set yourself up for failure. You made it too difficult. Do less not more.

Start Smaller and Grow very slowly

Whatever you had in mind its too much. Start smaller. Make your habit initially as small as possible. If you feel like its too easy…that’s a good sign. Only very very slowly grow your habit into something bigger. Be very comfortable with the feeling that you are essentially doing nothing.

Stop Before it Gets Hard

Lets say you are exercising as part of your daily habit. And it starts feeling hard. You start feeling pain where you don’t normally or you are tired or it feels like a long time. If you are beyond your minimum for the day, Stop!! Habits should never be hard. You should stop well before it even gets hard. Your minimum should be such that you should rarely feel an difficulty.

Eliminate Decisions and Options

Your habit should involve few decisions or options.  A choice of time…that’s an option. A choice of what to do…that’s an option. A choice of where to do it…that’s an option. Make your habit as structured and familiar as possible. Eliminate as many of these things as you can but not so many that you feel too constrained. Remember principle number one: Focus on consistency.

Use Social

Use people to help you with your habit. There are all sorts of ways of doing this but generally speaking people can be the most powerful means of ensuring you stick to a habit.

Use Environment

A change of environment and being consistent with this is powerful. If you always know you have to do X when you enter environment Y then you will have no difficulty.

Basically the whole idea of habits is to make things automatic. To exploit the fact that when it comes to certain things humans are like click…whirr machines. When they encounter a particular stimulus (click) they generate an automatic response (whirrr…or in our case a good habit).


The following is the set of techniques that are based on the above principles:

The Seinfeld calendar

A good way to optimize for consistency is the suggestion of Seinfeld. You setup a year long calendar and every time you do your habit you make a red X for that day. Pretty soon you have a chain of red X’s and your objective is to not break the chain. Again this is principle number 1: focus on consistency.

Minimum habits and the 15 minute rule

The consistency principle implies that when you start off your habit it should be as easy as possible. Because the easier it is the higher the likelihood you will do it. One way to do that is to start off by doing your habit for a very small amount of time. Even better make your habit a minimum one…meaning that you commit to do your habit for at least X minutes everyday. When I was learning to invest I made my minimum time 15 minutes. This had three advantages

  1. it was just enough time to get something meaningful done
  2. it was small enough that I could do even on my worst days
  3. it was just large enough that once I started doing it, it was easy for me to keep going. I would often spend more than 1 hour because once I got mentally involved I didn’t want to stop

I call this the 15 minute rule but really 15 minutes is arbitrary. In exercise I actually made it 7 minutes of running. The goal here is to create a minimum that you can commit to doing for the rest of your life…on your wedding day, when your depressed, when your girlfriend breaks up with you, when you are on vacation. Something like brushing your teeth.

Get a Partner

When I was forming my exercise habit I did it with my friend. This helps enormously. Its much much easier to do anything if you do it with a partner

Make a Bet or Other Social Commitment

Even with the 15 minute rule and Seinfeld Calendar I still repeatedly failed in my investing habit. The thing that worked for me was to make a $100 bet with by friend. If I didn’t invest for 1 day, I would pay him $100. This worked beautifully. I paid out once for New Years Eve.

Its best to make these bets unilateral. It should never be, I will bet $100 I will invest but only if you are willing to bet $100 you will quit smoking. This never works since you are let off the hook if your friend fails. Your bet is meant to make your habit stick…potentially paying your friend money is a small price to pay. 

Betting is one very strong form of social commitment. There are others: you can make a contract and sign it with friends as witnesses. You can make a public announcement. The whole idea generally is to make a social commitment. Bets work best since they are simultaneously a social commitment and a monetary penalty.

Social commitments aren’t rational but they work extremely well. Often the bet is never paid out but just the idea of the bet itself is often enough to spur one into action.

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