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The Number One Thing that Determines Our Success: Forming SMART Habits

Studies show that our habits are the key to our success and our failures. Here are tips to help you build the right habits for long-term success!
David S. Chang, ChFC® is President and CEO of WealthBridge Inc., an award-winning Wealth Management Firm and Registered Investment Advisor, and Chang Holding Company. He is also an award-winning entrepreneur, wealth manager, keynote speaker, and author. In 2015 David was chosen as a member of InvestmentNews’ 2015 40 Under 40 list of top young advisers and associated professionals in the financial planning industry. He has been featured in Forbes as one of America’s Select Financial Leaders. In 2013 David was selected as Top 40 Under 40 Military by CivilianJobs.com. In 2011, Pacific Edge Magazine selected David as Young Professional of the Year. In 2010, he was selected as the Business Leader of the Year from the Pacific Business News 2010 class of Forty Under 40 in Hawaii. WealthBridge Inc., has been selected as a FIVE-STAR Wealth Manager for eight years in a row (2011-2018), representing the top 4% of Wealth Managers statewide. WealthBridge Inc. was also selected by The National Association of Board Certified Advisory Practices (NABCAP) as a Premier Advisor for 2014, 2013, and 2012.In 2012, they were awarded the “Excellence in Customer Satisfaction” Talk of the Town winner, with a 4.5 out of 5 stars rating. David is also the editor of The Art of Thinking SMART, a blog and previously had a finance column in The Star-Advertiser’s weekly Midweek with a readership of over 400,000 people. He has created The Art of SMART Money, a Wealth Building Membership Program.
David S. Chang, ChFC® is President and CEO of WealthBridge Inc., an award-winning Wealth Management Firm and Registered Investment Advisor, and Chang Holding Company. He is also an award-winning entrepreneur, wealth manager, keynote speaker, and author. In 2015 David was chosen as a member of InvestmentNews’ 2015 40 Under 40 list of top young advisers and associated professionals in the financial planning industry. He has been featured in Forbes as one of America’s Select Financial Leaders. In 2013 David was selected as Top 40 Under 40 Military by CivilianJobs.com. In 2011, Pacific Edge Magazine selected David as Young Professional of the Year. In 2010, he was selected as the Business Leader of the Year from the Pacific Business News 2010 class of Forty Under 40 in Hawaii. WealthBridge Inc., has been selected as a FIVE-STAR Wealth Manager for eight years in a row (2011-2018), representing the top 4% of Wealth Managers statewide. WealthBridge Inc. was also selected by The National Association of Board Certified Advisory Practices (NABCAP) as a Premier Advisor for 2014, 2013, and 2012.In 2012, they were awarded the “Excellence in Customer Satisfaction” Talk of the Town winner, with a 4.5 out of 5 stars rating. David is also the editor of The Art of Thinking SMART, a blog and previously had a finance column in The Star-Advertiser’s weekly Midweek with a readership of over 400,000 people. He has created The Art of SMART Money, a Wealth Building Membership Program.

We are what we repeatedly do. Excellence, then, is not an act, but a habit. ~ Aristotle

Your “habits” are the basis of your success or failures. Did you know that more than half of all decisions you make are actually habits? You don’t consciously think when you make them, you automatically revert to a particular action based on the habits you have developed over time. A habit is something you regularly and automatically do without thinking about it. This is actually a good thing because we can accomplish tasks (or not accomplish them) without spending exorbitant mental effort and wear ourselves down too quickly.

Imagine having to think of every step of getting in your car and driving to work in the morning. By the time you got to work, you would be mentally exhausted! Our brains create these habits to automate activities to free up the mental capacity to focus on higher level activities. Habits help our brain conserve energy and minimize the physical and mental strength needed to conduct an activity. Habits are essentially who you are! Without them, we wouldn’t get much done during the day.

Good habits help you reach your goals and be more efficient and effective in life. Studies show that the richest and most successful people in the world have certain habits in common. Bad habits have the opposite effect of derailing your goals. Given that our actions determine our outcomes, and the bulk of our actions are based on our habits, how do we stop bad habits and create good habits? It is clearly much harder than it seems. Many people do not understand the role habits have in our lives, which is why only 8 percent of people reach their New Year’s resolutions.

How Habits are Formed

According to Charles Duhigg, author of The Power of Habit, you can’t change habits by “powering through” them. Your willpower is like a muscle, and it gets exhausted throughout the day. This is why at the end of the day, it is much harder to keep to your diet than in the morning, when your willpower is fresh! Our brains are very powerful. They are constantly looking for patterns and activities in our lives to turn into habits. Since our subconscious mind does not discriminate between good and bad habits, anything that we repeat over time has the potential for our brain to convert into a habit.

Many people make the mistake of trying to change or start just the habit or behavior. Instead, you have to first understand how it is formed and what a habit is made up of. A habit is not just one independent action, but according to Duhigg, it is a three-part loop consisting of a cue, routine, and reward.

If you want to change a habit, you need to focus on the cues and rewards that keep the specific habit going. Understanding this process will help you be INTENTIONAL and CONSCIOUSLY choose what activities and behaviors become habits.

  1. Cue: This triggers our habit and behavior to automatically unfold. There are five types of cues – a place, a time of day, a certain person, a certain emotion, or a ritualized behavior.
  2. Routine: This is the habit or behavior you find yourself doing unknowingly. It can be physical, mental or emotional. Just like getting in your car everyday in the morning to drive to work, you don’t consciously think of every decision you make. The more you do it, the less attention you need and the more automated it becomes. The habit takes over, freeing up mental space and conserving as much willpower as possible.
  3. Reward: This is the pleasure you get from the habit. The reward “burns the habit into your memory” so it becomes the go-to habit the next time the cue takes place.

How Habits Are Changed

If you want to curb a bad habit, you want to find your cue and reward. Identify the full loop, and experiment with different rewards. Try to isolate your cue so you can better control the triggers.

Duhigg from his personal experience found that he ate a cookie every afternoon at 3PM and gained 8 pounds. He thought the reward was to satisfy his sweet tooth, but after experimenting, he found the reward was actually socializing with his peers. He was using the excuse of getting a cookie to talk to his coworkers. After recognizing this, instead of eating cookies, he headed over to a colleague, talked for ten minutes and then went back to work, eventually losing 12 pounds! It was a matter of teaching his brain to associate a reward with the appropriate habit.

If there are any habits you want to change, you have to properly diagnose and then change them. No one knew the impact habits have better than the late Dr. Stephen R. Covey, author of the bestseller “The 7 Habits of Highly Effective People.” Habits are the things we do everyday without consciously thinking about them.

Habits have a very important purpose: They save our brain from work by relegating certain repetitive tasks to a walnut-sized area in the middle of our brain called the “basal ganglia.” This area also plays a key role in the development of emotions, memories and pattern recognition.

Decisions, meanwhile, are made in a different part of the brain called the prefrontal cortex. As soon as a behavior becomes automatic, the decision-making part of your brain goes into sleep mode and the habit-making part of the brain begins to take over. Duhigg states, “In fact, the brain starts working less and less…and the brain can almost completely shut down. This is a real advantage, because it means you have all of this mental activity you can devote to something else.”

That’s why it’s easy — while driving or parallel parking, let’s say — to completely focus on something else: like the radio, or a conversation you’re having. Because our “basal ganglia” can take a behavior and turn it into an automatic routine, our brain is free to expand and perform higher level and complex behaviors without being mentally aware. Thankfully, studies show that it’s never too late to break a habit. They are malleable throughout your entire life.

Tips to Change Habits

  1. Take a Vacation! Studies have shown that people will perform automated behaviors — like pulling out of a driveway or brushing teeth — the same way every single time if they’re in the same environment. But if they take a vacation, it’s likely that the behavior will change since the cues change and patterns are broken up. That’s one of the reasons why taking a vacation is so relaxing: It helps break certain habits and is one of the best ways to do it. Your old cues and all your old rewards aren’t there anymore. You have the ability to form a new pattern and hopefully be able to carry it over when you get back home.
  2. Understand how habits work. Another way to change our habits is to better understand how habits are formed and removed physiologically within our brains. The reasons changing habits is so difficult is because our habits compete in our brain. Our brain cells (neurons) compete for “cortical space” inside our brains. This space is prime property, just like beachfront property, so there is a strong demand for this brain real estate. In order to introduce a new habit, we must create a new neural pathway inside our brain. This is difficult to do since our old neural pathways don’t want to give up any of the “brain real estate”. The old habits fight to keep that real estate from new intruding neurons (new habits). This is why getting rid of an old habit is so hard. There is a real estate war waging inside our brains when we introduce new habits. Not surprisingly, our old habits often will win out!
  3. Leverage your old habits to build new ones. Instead of trying to declare full war (our brain gets exhausted) we can use and leverage your old habits to build new ones. The best way to do this is to stack a new habit on top of an old habit. Think of an existing habit and neural pathway as a train on a track. If you add your new habit as a passenger to that same train, the brain won’t put up a fight since you’re not trying to take control of the train or the track, you’re just taking a ride. When an old habit does not see a new habit as a threat, there is no brain real estate war…so guess what, a new habit is born! I tend to overeat. Growing up in an immigrant family, we never wasted food. Our family had a habit of never leaving food on our plate to waste. The problem is that even when I am full, I still eat until my plate is empty. By co-opting and using my existing habit as leverage, I can just use smaller plates or put less food on my plate. My habit hasn’t changed, but I am eating less food since there is less on my plate!
  4. Start small and choose wisely. You can’t change all of your bad habits or create good habits all at once. Your brain is very powerful and will eventually win out if you try to force drastic changes. The key is to choose one or two habits to change or build first. Once you are able to successfully do so, then it becomes easier to move to the next one. It is best to start small. The small victories will help motivate you and it is important to be consistent (so you develop the habit of improvement!). It is also important to choose the right habit to get started. We all have limited time and resources, so choose one that has the most impact and can make the biggest differences. For me I learned that developing a healthy lifestyle was one that impacted so many aspects of my life. Treating my body better – eating right, getting proper exercise and sleep – helped me gain more energy, greater focus, and a heightened level of discipline.

Our daily habits are a major determinant of our wealth and success. No matter how good our plans, strategies, and investments, it can be easily undone by bad habits. Good habits are a multiplier and by continually building on a stronger foundation, it will separate the good from the great!

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