How to Create Atomic Habits

People do not decide their futures. They decide their habits, and their habits decide their futures 

- F. M. Alexander

We are forming habits all the time. 

When we face a problem, our brain looks for a solution. When we find the solution, our behavior is reinforced; and when this pattern repeats over and over the behavior becomes automatic. So in simplest terms, habits can be seen as our automatic solutions to life’s daily problems.  

An overweight man rises at sunrise to workout every morning. Another man checks social media at every free moment during his day. Both men have problems they desire solutions to. The first man wants to overcome obesity and poor health. The second man is looking for validation or at the very least an escape from his mundane workday. Old habits die hard,and new habits are difficult to sustain in large part because our most practiced behavioral patterns form neural pathways in our brains. Think of walking through a grassy field. Your first few walks don’t make a visible path, but by your hundredth walk you have completely trampled the grass and carved out a dirt path in its place. It follows then that your thought patterns play a key role in altering your habits. But changing the way you think isn’t a mere matter of willpower. It’s crucial to first understand how habits are formed. 

In his book Atomic Habits, author and habit formation expert, James Clear explains the four stages of habit formation: 

1. Noticing: you can’t form a habit without first noticing the cue, or trigger 

   • It’s hard to change something if you’re not aware of it. One way to become more aware of the opportunity to change is to implement a specific plan 

     1. Example: Every day after work a woman walks into her living room, sees the TV remote on the couch, and watches TV for the next three hours. She desires to use this time productively,  but struggles to change her habit.
        
        

2. Wanting: you want what you notice 

   • Our physical environment influences what we want.

   • We do not need to be the victims of our environments. Rather, we can design our environments to limit resistance to good habits, and increase tension towards bad habits.

     1. Example: The woman rearranges her furniture so it no longer faces the TV. She places the remote in a drawer, and leaves a  book on the couch in its place.
        
        

3. Doing: you act on your want, which is often the most available option

   • Make your habit as easy as possible to start every time

   • Any habit can be started with the 2 minute rule. 

     1. Example: In her first two minutes arriving home from work, the woman gets herself a glass of water and sits down to read her book.  

4. Liking: you enjoy the reward of your action 

   • Learn how to bring the reward into your present moment: The best way to change long term behavior is with short term feedback, i.e. measuring your progress. 

     1. Example: The woman has now enrolled in a book club. She journals her thoughts and impressions of what she reads, knowing she will later enjoy sharing with the people in her book club.  

By understanding how our habits are formed, we can begin to take control of the habit-forming process and optimize it for our greatest benefit.  

How atomic habits can help you achieve success in real estate investing

A habit becomes atomic when it acts as part of a larger system, whereby it serves as the building block for remarkable results. My goal may be to purchase my first investment property this year. While this is a great goal, I’m not likely to achieve it without identifying the daily steps it will take to get there. James Clear states in his book, “You don’t rise to the level of your goals; rather, you fall to the level of your systems.” So, how do we put our system in place?

A good exercise for this goal would be as follows: 

Goal: I want to purchase my first rental property this year

1. What do I need to do in order to purchase my first property? 

   • I need to find a great property, assess its value, and make an offer. 

2. What do I need to do in order to find a great property, assess its value, and make an offer? 

   • I need to analyze (many) properties 

3. What do I need to do in order to analyze many properties? 

   • I need to analyze one property every day 

4. What do I need to do in order to analyze one property every day? 

   • I need to get up at 6am each day and analyze a property before work

5. What do I need to do in order to get up each morning at 6am? 

   • I need to be in bed no later than 10pm - this is the habit - the first domino that will set all the other bigger dominos into motion. 

Now going to bed by 10pm doesn’t seem like the secret to success. But it is the first step towards true identity change. The habit isn’t the goal; rather it’s the tool to help you become who you desire to be. Habits help us achieve external measures of success, but more importantly, they help us achieve internal change and forge a new identity. Or as Clear puts it, “Habits are the compound interest of self-improvement.” Going to bed early is not simply deciding a habit, it is deciding a future. 

This will not be easy. 

Good habits have one main problem: the cost is immediate while the reward is almost always delayed. Getting up at 6am every day to read and analyze properties costs sleep and time, and the rewards are likely months - years - down the road. Bad habits, on the other hand,  have the reverse problem: spending hours watching TV every day provides the instant gratification of entertainment. But over time may cost you your physical health, as well as many opportunities to learn and be successful. 

We live in an outcome based society, where it’s very easy to overlook the role of our daily habits in producing long-term goals. As a result, it’s easy to give up on your habit when you’re not seeing the fruits as quickly as you’d like. But science shows that it takes roughly 66 days to develop a habit. So it’s important to trust the process and let the outcome worry about itself. Remind yourself that your work is never wasted. Author Gary Keller puts it this way, “Sometimes we’re succeeding so slowly it feels like we’re failing.” Know that even if you don’t yet have a large portfolio of cash flowing properties, you’re working toward that goal with every book you read, and every property you analyze. 

If you could establish a habit in 66 days that would radically change your identity by moving you towards your ultimate goal, why wouldn’t you start? Sure, you may miss a day of your habit practice. A healthy goal can be to never miss twice. It’s rarely the first mistake, but rather the spiral of repeated mistakes that knocks you off course. If this happens, just recommit yourself and start over. Decide to commit to your habit, and watch as you move closer each day to your ultimate goal.