Month: June 2013

Forget the 21 day rule for creating new habits. That’s one of the many products of flawed e-mail forwards that claim to cite good research. The downside with a “fact” of this nature is that it has led many to disappointment. Exercising for 21 days does not make it a habit.

The real research points to an average 66 days for the creation of a new habit. It goes up or down depending on the difficulty of the habit and my estimation for the difficult habit is 7 weeks or 84 days.

A couple of observations from the researchers –

– Missing a single day did not reduce the chance of forming a habit. (i.e. stop judging progress)
– A sub-group took much longer than the others to form their habits, perhaps suggesting some people are ‘habit-resistant’. (i.e. if your mind is closed, it might take longer than 84 days)

Let’s stop 4 week habit experiments (assuming you’re working on the habit 5 days/week) and start setting up 17 week experiments. Habits are only formed when we’re in it for the long run. Are we?

This week’s book learning is part 1 of a 5 part series on Personal Finance and Investing inspired by 3 books- The Investors Manifesto by William J Bernstein, I Will Teach You to Be Rich by Ramit Sethi, and The Millionaire Teacher by Andrew Hallam.

Today, we dive into personal finance 101.

Step 1: Stop discussing minutiae. We can talk about the effect of carbohydrates and trans fats on our health all day. What we REALLY need to know to stay healthy is to eat less and exercise more.
It’s the same with money – spend less than you make, live simple, spend consciously, and invest.

Step 2: Work with % guidelines for your budget. Below is a guideline split (primarily from Ramit Sethi) –
50% Fixed costs – rent, utilities, debts, transport, food, and health
15% Investments – this will be covered in parts 2, 3 and 4 of the series
10% Savings for future expenses – wedding, vacations, gifts, etc.
25% Guilt free spending – i.e. conscious spending (Pro tip: spend on experiences, not things)

Step 3: Be smart with your credit cards. If you live in countries which look into credit history before giving you loans, use your credit cards for your spending to save much more in the form of better interest rates on big loans. Never let your credit card balance go on overdraft though. Aside from hefty fees, it also damages your credit history.

So, if you are responsible with credit payments, ignore investment gurus who ask you to cut up your credit cards.
(Pro tip: Never pay yearly credit card fees. These can easily be taken off with a call to your credit card company)

Sketch by EB

I began reading up on personal finance and investing out of a personal need to understand the subject. It’s one of those subjects that requires a heavy one time investment to understand it and I’m glad I took the time. This series is the resulting thesis that I have developed. I hope you find it useful to get you thinking…

You’ve probably heard the derogatory saying “Jack of all trades, master of none.” It implies that by trying to learn many things, you give up mastery of any of them. Quora designer David Cole says this is a myth.

He talks specifically about the field of design (the myth of the “unicorn” designer who can do everything from identity design to user interface design to Javascript coding), but his arguments apply to many fields. You don’t have to pick between being great at one thing or just mediocre at many things.

“Learning isn’t a zero-sum activity,” Cole writes:

The central counter-argument here is that any learning comes with opportunity cost. Learning Python might very well take up time that you would otherwise use for studying, say, product management. This is true, in theory. But in practice, most designers I know, including myself prior to joining Quora, are not learning at their maximum rate. I have spent much of my career solving the same design problems over and over again with no substantive personal growth to show for it. I don’t think my situation is unique.

But even if you were learning at your maximum rate, the opportunity cost argument actually works in favor of the multi-disciplinary approach. Design and its component practices are like any other craft: you can always develop a deeper familiarity with the minutiae, asymptotically approaching mastery. But this is a process with diminishing returns. Would you rather carve a door 1% better than you did last year, or learn how to build the rest of the house in the same amount of time? As I argue below, the connective tissue between these skills may actually be more valuable than incremental gains in a single practice.

—

Thanks Lifehacker. A nice reminder to just learn, learn, learn. Whether the dots connect or not, you’re always better for it.

When you are standing in front of an important group to make your case, you always have less time than what you feel you require. So, it feels right, efficient even, to just dive in and give them your pitch.

That’s a mistake.

The assumption that a group of executives/venture capitalists are in a similar head space and share your context is typically wrong. As you enter and set up, they are busy thinking about the previous presenter, the unattended issues in the business, and their son’s basketball game in the evening among others. They need you to guide them to a place where your presentation begins to makes sense to them. So, take a minute to set the context and explain why you’re standing in front of them.

When you “feel” busy is always when you most need to slow down.

In retrospect, it’s easy to wonder why things weren’t more straightforward. Why didn’t he/she/you just do “that?” That seems so painfully obvious.

Thanks to our inherent flaws and irrationality, human life is never straightforward. The path will never be a straight line.

Painfully obvious is only painfully obvious when someone points it out to you.

Embrace the squiggly line.

Every time I call my bank’s customer service hotline, I go straight for the “Lost and Stolen Card” option so I can speak directly to a customer service officer. There has been the occasional time when I’ve tried following the instructions and I’ve been burnt every single time as it’s typically resulted in the automated voice telling me to go check the website.

Of course I know I could go check the website. I call because the website hasn’t helped. I call because I’m frustrated or need a problem fixed.

Your customer service exists to make customers feel helped. If a customer has to call customer service, it means some damage has already been done. If you’re going to make the customer go through more pain to just speak to a human being, it’s beating the purpose.

Ditch the options. Connect me to the human being. Put me in a queue for a reasonable period of time, if necessary. But don’t assume your automated voice can solve my problems. It may feel efficient but it’s not effective. If you are pushing customers away, then you’ve just lost the plot.

PS: Of course, the curative approach is to design things in a way that minimizes customer service queries. But if queries are going to come anyway, you might as well get that part right.

How many times have you asked Google a question about a day-to-day problem and received a great answer?

How many times have you relied on Tripadvisor reviews when planning a holiday?

How many times have you found an answer to an excel query or a computer problem on forums online?

Now, let’s flip it around – how many times have you added to the conversation and shared your experiences so they benefit others?

The internet is a wonderful source of value because many take time out to share their experiences and add value to all the others in the process. So, the next time you find yourself “taking” value from the internet, do remember to “give” too.

Our contribution does make a difference. And it’s the best way to give thanks to all those good samaritans whose advice we’ve found useful. Let’s say thank you whenever we can and pay it forward..always.

The world is what we make of it.

A month into picking up a tennis racket for the first time, I played with a friend who was/is an accomplished tennis player. He was amused at my constant attempts at increasing the power behind my shots. I never managed to get the ball past him, of course.

When we finished, he spoke about a Sampras-Agassi classic he’d watched as a kid. Sampras hit more winners and still lost the game as he had made many more unforced errors than Agassi had. As a young Sampras fan, he was devastated. But his coach made sure he learnt an important lesson – winning games is often about avoiding unforced errors rather than hitting winners. His advice to me was to focus on landing my shots close to the base line and not worry about power. When I finally went to an accomplished tennis coach, he said the same.

It’s advice that I remember every time I go out to play tennis. This weekend was no different. The focus when hitting a shot was just to keep it in. Nothing fancy. Just avoid basic mistakes.

I have come to realize that this is probably the most important characteristic of a learner. Every time you are in a new situation or are starting afresh, all you need to focus on is to avoid basic unforced errors. Whether you are an analyst in a large company or a trainee in a graduate program, your focus ought to be on creating a 0 error game. No fancy winners required. That stuff comes later. (And sometimes, even at the highest level, you are defined by the unforced errors in your game, as the Sampras-Agassi example shows)

To use a bowling analogy, your first objective has to be to avoid bowling into the gutter. You then move onto attempting to “close frames” i.e. make sure you get spares. You then move onto making sure you get the occasional strikes. Then you focus on eliminating “open frames” altogether. And, finally, you focus on eliminating spares and only bowling strikes. That’s how international bowling champions become champions.

You can’t skip steps. The sooner you’re willing to embrace this curve, the quicker you will learn. So, if you’re asked to carry coffee often on your internship, just focus on never dropping any.. that’s how the best make it – by eliminating basic unforced errors.

This week’s learning is part 2 from a 3 part from The Power of Habit by Charles Duhigg. (Parts 1, 2)

Back in Beijing, it was 9:56 A.M., 4 minutes before the Butterfly race’s start. Phelps stood behind his starting block, bouncing slightly on his toes. When the announcer said his name, Phelps stepped onto the block, then stepped down, then swung his arms three times, as he had before every race since he was twelve years old. He stepped up on the blocks again, got into his stance, and, when the gun sounded, leapt.

But, Phelps knew something was wrong as soon as he hit the water. There was moisture inside his goggles. By the second turn, everything was getting blurry and as he approached the third turn, the cups of his goggles were completely filled and he couldn’t see how many strokes were left!

For most swimmers, losing your sight in the middle of an Olympic final would be cause for panic. Phelps was calm. Everything else that day had gone according to plan. The leaking goggles were a minor deviation, but one for which he was prepared. Bowman had once made Phelps swim in a Michigan pool in the dark and some of the videotapes in Phelps’s mind had featured problems like this.
Most important, Phelps’s keystone habits had established a certainty within his mind: he could succeed, no matter the obstacles. After all, he had always succeeded before. His self-image, all of his habits, were built around the certainty of overcoming any problem.

As he started his last lap, Phelps estimated how many strokes the final push would require – 19 or 20, maybe 21 – and started counting. He felt totally relaxed as he swam at full strength. Midway through the lap he began to increase his effort, a final eruption that had become one of his main techniques in overwhelming opponents.

At 18 strokes, he started anticipating the wall. He could hear the crowd roaring, but since he was blind, he had no idea if they were cheering for him or someone else. 19 strokes, then 20. It felt like he needed one more. That’s what the videotape in his head said. He made a 21, huge stroke, glided with his arm outstretched, and touched the wall. He had timed it perfectly.

When he ripped off his goggles and looked up at the scoreboard, it said “WR” – world record – next to his name. He’d won another gold – swimming blind!

Sketch by EB

After the race, a reporter asked what it had felt like to swim blind.

“It felt like I imagined it would” Phelps said. It was one additional victory in a day full of small wins. It was a triumph of keystone habits, just another step in a lifetime of success.

I felt goose bumps as I read this. I hope you enjoyed this series on habits.