Why Do New Year Resolutions Never Work?

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It’s January, the time of year when we aspire to be or accomplish something new. You don’t have to wait for January to decide to improve yourself, but it’s as good a time as any, and definitely the most popular time. We’re two weeks in now, the gyms are packed, we’re paying closer attention to our budgets, our pantries are full of healthier foods, you know how it goes. These are all good things, but unfortunately, studies show that about 80% of New Year’s resolutions fail by mid-February. Maybe your resolution is already floundering.

James Clear, the author of Atomic Habits, says people don’t rise to the level of their goals, they fall to the level of their systems. I think he’s exactly right. We’re good at setting goals and making resolutions, but we’re bad at making lasting changes. And it’s not because we don’t want it enough or because we make disingenuous resolutions, it’s because humans operate by default and we fail to address our default habits. Goals don’t change behavior regardless of how SMART they are or whether or not they qualify as BHAG. We need new systems, new defaults, and new habits, maybe not another resolution.

So how do we change our systems? James Clear talks about becoming 1% better each day by doing something small. It could be one pushup per day if you want to build a workout habit. It could be one call per day if you want to build a networking habit. You mold your identity by consistently doing the things the type of person you aspire to be does. Each time you do something, no matter how small, your new identity is reinforced. If I’m an athletic person, I workout. Weight loss and muscle gains simply follow. If I’m a successful salesperson, I network. Income is simply a result. My default habits would never change by simply thinking about my weight loss goal or even by putting down my income goals on paper (I, like most of us, have tried). Change requires action, no matter how small. A helpful quote I’ve come across (attributed to several different authors including Millar Fuller and Jerry Sternin) summarizes this idea nicely: “It’s easier to act your way into a new way thinking than to think your way into a new way of acting.” Alan Deutschman, in his book Change or Die, says, “It’s obvious that what we believe and what we feel influences how we act. That’s common sense. But the equation works in the other direction as well: How we act influences what we believe and what we feel. That’s one of the most counterintuitive yet powerful principles of modern psychology (p78).” He adds, “You have to do things a new way before you can think in a new way (p79).”

It’s interesting to think about the purpose of all of this. We set goals at the beginning of each year because we want to accomplish things, for sure. But I think the more significant reason we spend all of this time on goals is that we aspire to be better persons. The most basic thing we’re after is a change in our identity. I won’t stray into the mire of philosophical implications here, but I think that’s a clarifying thought. The accomplishment we’re after is a change in identity, not another New Year’s resolution. Our identity changes when our default behaviors and habits change. Act different in order to think different. Start small, start simple, do something laughably easy, and then don’t ever stop.

Don’t worry about long-term plans

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Long term plans are tough, mostly because we don’t know the future. If you’ve got a 20-year long term goal that’s great, but it’s probably not going to happen, at least not the way you planned; who knows what will happen in the next 20 years? It’s not bad to set long goals if only to set you in a direction, but don’t marry those goals, don’t die on their hills, don’t forsake all other paths or options. People achieve success more often by focusing on what’s right in front of them. It’s called short term planning. When an opportunity arises you make a decision, you work hard at the work in front of you, you make plans for things that are actionable and semi-immediate. Success tends to favor those who, instead of working backward from a goal in the future, make a decision based on the currently available options which will give them the best range of options in the future. They actually keep their options open. It’s a different perspective, instead of an early determination to go all out in one direction or after one thing, you can take things as they come. You’ll obviously still work hard and make good decisions when options present themselves, but you don’t have to sell out for a long term goal. Don’t worry about the next 20 years, worry about the week, the day, the hour in front of you, and make the most of it.

Sell like you’re talking to your friends

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Selling, especially to my millennial preferences, is abhorrent. I don’t like to be sold to and  I absolutely hate selling something myself. The coercive attempt to make someone do something they seemingly would rather not too is like the sound of nails on a chalkboard. But here’s the thing, we’re all selling in some way or another all the time, even those of us who think we hate it. We recommend movies, albums, restaurants, products, apps, you name it. We invite others to hang out, to join our fantasy league, to participate is some experience. We even apply peer pressure when we really want someone to do something, and with no shame! The selling is constant. So why would someone like me (I know I’m not alone) hate the idea of selling while simultaneously recruiting, recommending, and even coercing?

Here’s the important distinguisher, we do all of this selling to our friends. We do it (usually) because we care about them and we want them to experience some of the joy or convenience that we’ve received from some experience or product. We’re even comfortable applying some pressure to help them see the light.

In work, we’re typically dealing with acquaintances at best and downright strangers at worst. Selling in that context is terrifying. But I heard something recently that made a huge difference to my perspective: instead of selling to people, treat them like friends. I wouldn’t hesitate to recommend something that I believe in to a friend, regardless of whether or not I get paid if or when they purchase. I would explain it to them without any awkward, cold sweat-inducing, manipulative selling techniques, I would give it to them straight and try to help them see the light. They can still say no, obviously, but at least it won’t be because I tried to sell them something.

What phone do you have?

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For technophiles, like yours truly, this is a really fun question. It clues me into your level of technophilia, tells me something about your priorities, and it’s a nice way to get a light conversation going on a subject about which I probably know more than you do.
But, as a confessed technophile, it’s a question I don’t only ask other people, in fact, more often it becomes a conversation I have with myself. I regularly overthink about which phone I have, why I have this phone, if I should get a different phone, if I were to get a different phone which one would it be, if I did have a different phone in mind how would I go about procuring one, and it goes on (that sounds much more disturbed as I write it out than it does when it’s happening in my brain). It doesn’t only happen with phones either. I fret about which computer to use, what configurations would be best, what size, what model, should I use a iPad instead, what if I got a desktop, if I were to get something different where would I get it, what would I do with my old one, and on, and on, and on (now I’m starting to think I may have a problem). The questions themselves aren’t bad, and the purpose, I tell myself, is worthy: I want to use tools that will help me be most effective. But, I made a discovery this morning, or maybe more like something I knew all along but pretended to not know. I determined that my effectiveness is much more affected by my endless, meandering indecision than by the tools I have or could have. So, in the interest of actual effectiveness, I’ve made a resolution: no more tech questions for one full year. I’ll allow myself the space to re-evaluate next year, conveniently right around my birthday, and decide if I want to change anything. Until then, I’m using what I’ve got, which honestly is pretty great anyways. I am a technophile after all.

Human capital

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What’s human capital?
To start, we need a definition. Here’s what Wikipedia has to say: “Human capital is the stock of habits, knowledge, social and personality attributes (including creativity) embodied in the ability to perform labour so as to produce economic value.” A little tricky, but basically human capital is the economic value of a person based on their skills and ability in the workplace.

So who gets paid for human capital?
In a free-market economy, everyone gets paid based on their own human capital. We each own our own skills and abilities and we collect income based on our ability and value when we work. Regardless of whether we work for a company or ourselves, we’re compensated for the value we’re able to provide.

So far so good. Now let’s tie this into investing. Without some understanding of the market, people tend to believe that they can beat the market by picking the right stocks. Consistent success (beating the market) in stock picking is actually impossible, but let’s pretend for a moment that’s not. If the market was beatable, there would naturally be people who were especially endowed with the skills and/or training to beat it. Those people would often become money managers and they would be highly sought after by the general public looking for great returns in their portfolios. But who would collect the premiums for additional returns achieved above-market returns? Stock picking would be a human capitalist skill! The brilliantly skilled money manager would collect some serious fees for his valuable ability, fees almost exactly in line with the amount of return he was able to achieve above the market. The additional return of the portfolio wouldn’t end up in the pockets of investors, it would go to the brilliant manager with the impressive human capital skills.

So here’s the point: the stock market is efficient and so it’s not consistently beatable, but even if it was, investors would not be the beneficiaries. The super-skilled money managers would rightly collect large fees, highly correlated to the additional value they were able to provide based on their human capital skills.