We are always looking to improve contact and communication with our clients. Our blog is a way for us to share our thoughts outside of the newsletter in a more casual way. To increase our content and allow for more people to contribute to the blog, we are expanding our topics covered and releasing more of what interests us at BCM. Expanding our content allows people to write about a wider range of topics like financial planning, current events, human behavior, and individual interests. This piece below is an example of this wider scope and is a book review from one of our Investment Advisors, Erin McMenemon. I hope you enjoy it and let us know if there is something you would like to hear more about.
Windshield Time & Habits
Book Review: The Power of Habit by Charles Duhigg
I get a significant amount of “windshield time” driving from New Orleans to Lafayette and back. My travel time spent in the car has always been a luxury and a window of peaceful space just for me. On the back and forth to the office I mostly listen to audio books and podcasts instead of getting on the phone or listening to music. I have listened to some great books and I am going to make a suggestion for those looking for a good read (hard copy or audio).
I loved this book—The Power of Habit—by Charles Duhigg. I have listened to it twice (once 5 years ago and again recently) and I think I will read it again in the next five years.
One of Charles’ quotes is:
“The difference between who you are and who you want to be is what you do.” – Charles Duhigg
I know people can resonate with this because it seems like everyone is constantly trying to work on good habits—whether diet, exercise, religious involvement; and trying to reduce bad habits—no need to name them all, right? Most people work on trying to increase good habits and reduce the bad habits. It does seem to be a constant struggle to moderate those undesirable habits and replace them with good ones. In the book, Charles covers a lot of technical scientific reasons behind habits but also includes a number of stories and anecdotes to make it interesting. I found it fascinating to hear how the brain works and how you can strengthen different parts to your benefit.
Here are some of the main points.
- Habits work in 3-step loops: cue, routine, reward.
- If you want to change a habit, switch the routine and leave everything else the same.
- Building willpower is the most important habit you can work on.
Suggestions on ways to build willpower:
- Practice something that requires discipline or delayed gratification
- Anticipate scenarios before they happen
- Keep some control of the situation. When you lose your control (i.e. you are listening to someone else) you will lose your own willpower. Willpower is the most important habit, and you can strengthen it over time.
One of the things that attracted me to Billeaud Capital years ago was the “habit” they had of sticking with a strict asset allocation and using the Market Risk Model as a barometer for changing that asset allocation. I invite you to read this book and I think you will see some of the similarities in the way we operate and the way we build routines to result in good rewards in the long term.
I leave with another quote by the author:
“Champions don’t do extraordinary things. They do ordinary things, but they do them without thinking, too fast for the other team to react. They follow the habits they’ve learned.” – Charles Duhigg
Now, I’m not calling us “champions” per se, BUT–we are following the habit of disciplined strategic investment management and expecting stable returns. J
By Erin McMenemon