Daily habits are what make us who we are. Even small changes, like a one percent improvement each day, can make you 365 percent better in just one year. On the other hand, if you adopt bad habits, a one percent deterioration each day can put you close to zero.
Compound interest is known as the eighth wonder of the world, and I'm sure you understand its power when it comes to investing and money. But what you probably don't know is that compound interest works not only with money, but also with other things, like habits.

When people start a habit, what they usually expect to see is a linear curve. But the reality is somewhat different, it actually looks exponential and even rougher (look on Google what an exponential graph looks like if you don't already know). Did you notice an improvement at the beginning? It is almost flat; it seems quite insignificant and really unnoticeable. The author calls this part the valley of disappointment. You put in so much effort and yet see almost no results. This is the point where the pain you experience is the greatest, but the results you see are the least. This is the part where you've been working on your business for almost a year, but you're still not seeing any profit. This is the part where you go to the gym but don't see any changes when you look in the mirror. This is the part where you upload videos to your YouTube channel but no one watches them.

Eventually, there comes a point where the growth curve crosses over the pain curve, and you start to see results. Unfortunately, many people cannot wait until that point and give up too soon. Only people who continue to improve eventually experience exponential growth.

Now here's the big question: How do you actually improve by one percent every day? What do you need for that? Many people believe that they need better and more precisely defined goals. That is not the case. You should focus on systems, not goals. The author says, "For many years, I approached my habits in this way. Each one was a goal to be achieved. I set goals for the grades I wanted to achieve in school, the weights I wanted to lift at the gym, and the profits I wanted to make." to make money in business. I succeeded at some, but I failed at many. In the end, I began to realize that my results had very little to do with the goals I set and almost everything to do with the systems I followed."

You are probably wondering, what is the difference between a goal and a system? So let me give you a few examples: Making a million dollars is a goal; setting up an automated investment account is the system that will get you there. Losing 20 kilos is the goal; hiring a trainer and nutritionist to assign you the right diet and exercise is a system. Having more friends is the goal; intentionally going to meetings and events every week is a system. Getting a promotion at work is the goal; researching what the company's biggest problems are and then breaking them down into small parts and solving them one by one is a system.

The author says, "Winners and losers have the same goals. At the end of the day, the determining factor is not the goal we set. After all, those who fail and those who succeed obviously had the same thing in mind. What will fundamentally determine our level of success is how we access systems to get there."

One reason for this is something called hedonic adaptation. When we set goals, the primary motivator for doing any task is to bring us closer to our desired goal. Buying a new house, having a brand new car, or becoming financially free. But what actually happens when we finally achieve the thing we've been dreaming about for the last few months? We feel very happy and successful for about a week. But after that?

Instead of goals, you should focus on systems. Build a system that helps you stay in the game longer and actually enjoy playing it too. Objectives refer to the results you want to achieve; systems refer to the processes that lead to those results. Just to be clear, the author has no personal problem with the goal itself. It becomes a problem when it is the primary motivator of anyone's actions. Goals are good for setting directions, but systems are best for making progress. So if we have to summarize the key points we covered as a first lesson, then our first lesson would be this: Don't focus too much on goals, focus on systems.

Lesson number two: How to build good habits. To create a new habit, we must break the process down into four simple steps: stimulus, craving, response, and reward. For example, if you are a smoker, seeing someone smoking is a stimulus. When you see a cigarette, there is a strong desire to smoke; this is craving. If you go up to that person, ask for a cigarette and light it, then that is a reaction. In the end, after the cigarette, the feeling of satisfaction you get is the reward. If the action is insufficient in any of the four stages, it will not become a habit.

The author pairs each step with a formula on how to achieve it.

1. **Incentive**: Make it obvious. Every habit is triggered by an incentive. So if you're building a new habit, you need to make it obvious. This can be achieved through different strategies. Strategy number one: merging habits. Forming habits means using already established habits to build new ones. For example, every morning before I brush my teeth, I'll do 20 push-ups. After I drink my morning coffee, I will meditate for five minutes. When I'm coming home from the gym, I'll listen to audiobooks on the way. In this way, you program your brain to always think of the two activities as a whole; when you do one, the other will automatically follow. Strategy number two: redesign your environment. Building a new habit in an old environment is extremely difficult because your brain has already made certain associations with that environment and it is very difficult to fight against it. You have to redesign the environment according to your new habits; otherwise you will keep reverting to old habits. What would redesigning your environment look like? For example, if you are trying to live a healthy lifestyle, then redesigning your environment might look like this: placing a pull-up bar in your room so that every time you see it, you do a few pull-ups; replacing cakes on the table with fruit; removing the TV from the living room; deleting Instagram from your phone and replacing it with an audio book app or simply logging into Insight Academy and reading book analysis, lessons, member stories… Instead of drinking one regular glass of water in the morning, use a large bottle; keeping healthy food ready to eat in the fridge for lazy moments because those moments are bound to come. Finally, the most important thing: surround yourself with the right people. For example, if you want to become an entrepreneur and hang out with friends who have the same goal, then they will always talk about entrepreneurship. You don't have to put in any extra effort; talking about entrepreneurship will become a regular topic for you. Simply put, designing your environment means creating an environment where your desired outcome becomes the ordinary outcome you do without any effort. Personally, I'm a big fan of environment redesign, and I hope you're convinced now too. But if you haven't, then listen to this story: during the Vietnam War, most of the American soldiers in Vietnam were addicted to drugs, and the problem was so serious that even at the government level, a committee was formed to deal with the problem. Interestingly enough, as soon as the war ended and the soldiers returned home, 90 percent of them automatically stopped without any help. The reason was simple: the environment had changed, and the incentives had disappeared. In their new environment, there were no more incentives to remind them to use drugs. But in Vietnam the incentives were everywhere and they kept moving them. As soon as the environment changed, the incentives disappeared and so did the addiction. By the way, this is why many people go to rehab, but as soon as they get home, they become the same old person because they go back to their old environment where the incentives are everywhere and they can't resist for long.

So after you finish reading this analysis, just take a look at your room and your life and see if your surroundings are helping you build the habits you want or working against you. For example, how many of you eat, sleep and work in the same room at home? Well, no wonder you can't finish your work and keep procrastinating. Try to choose each room for a different activity: bedroom for sleeping, kitchen for eating and living room for relaxing. For those of you who live in a one-bedroom apartment, the author suggests using each corner or part of the room for different activities. For example, having one corner for work and one for sleeping, etc.

2. **Curse**: Make her attractive. The second step to successfully forming a habit is to make it attractive. One of the key strategies with this step is called temptation linking. It simply means matching the action you want to take with the action you have to take. For example, if you desperately want to binge-watch that show on Netflix, then do it while you're running on the treadmill. If you want to start going to the gym, try to fit it in with some of your responsibilities. Your office where you work may be close enough to a gym that you can visit; use that to your advantage and pair those things together. Another very powerful tool is to become part of a group of people with similar interests. If you want to start a habit and you're doing it alone, then there's a high chance you won't succeed because there won't be anyone to push you or hold you accountable when the lazy side of you wakes up.

3. **Answer**: Make it light. Have you ever seen a water hose that is so tightly tied/bent that the water hardly flows? If you want water to flow freely, all you need to do is simply loosen the hose, and it will flow freely. You don't even need extra willpower or extra motivation; simply make it easy for the habit to flow. Here are some tips to achieve this: Reduce friction. Have you ever wanted to go to the gym or go for a run, but then you said to yourself, "Yeah, but I'd have to get dressed and drive a car for 20 minutes just to work out, and it's not worth it"? Just the idea of ​​doing a few tasks before our desired habits repels us. So try to reduce the number of steps. If you want to eat healthy, if you can afford it, then buy healthy lunches from your local food delivery. Alternatively, you can cook yourself a larger healthy meal on Sunday for the following week. This will reduce friction as all you will need to do is go to the fridge.

4. **Reward**: Make it satisfying. The reason most people can't stick to their habits is because they have to suffer first without any immediate reward. If you go for a run, you won't see any difference if you step on the scale as soon as you finish your session; it will take weeks if not months to see any significant results. As we mentioned at the beginning, the pain level is very high at the beginning of the habit. So, to keep yourself motivated, use a habit tracker to remind you of your successes every day. Habit tracking can be a simple wall calendar where you put an "X" every time you do something related to your habit. Once, a young and aspiring comedian approached the famous comedian Jerry Seinfeld and asked for tips on writing better jokes. Seinfeld thought for a moment and said, "Well, the secret to becoming a better comedian is to write better jokes. And the secret to writing better jokes is to write every day." So here's what you need to do: get a wall calendar where you can see every day of the month and year mapped out on one page. Then, every day that you adhere to the habit of writing for 10 or 15 minutes, I want you to put an "X" on that day. In the beginning, you'll do this intermittently, but eventually, at some point, you'll have a chain. And then, your only goal is simple: don't break the chain. It doesn't matter how you feel or how bad your writing is; follow the pattern. Sticking to the things we want to do is what makes the difference. It is consistency that helps us become one percent better every day and ultimately become 365% better at the end of the year. You're probably still unsure about getting 365% better, so let me prove it to you with a simple example.

Let's say you want to start listening to audiobooks. Okay, so this is a habit you want to develop for the new year. So it's January 1st, and you're starting a habit. You take a large calendar that has all the days of the year and stick it on the wall; the calendar is our habit companion. According to the two-minute rule, you only need to listen to a book for two minutes, which is 120 seconds. For simplicity, we'll keep it as 100 seconds because we're going to do some calculations now. So it's day one, and you've just listened to a book for 100 seconds and you've also put an "X" on the calendar. Now it's day two, and you need to improve by one percent, which means you'll now be listening for 101 seconds. It's simple math: one percent of 100 is 1. So we add one extra second on the second day. Well, for the first 10 days, the results say that on the 10th day we would have to listen to 109sec. Now I'm sure many of you are saying they can listen to more than 109 seconds by day 10, but let's stick with the one percent improvement formula and speed it up a few more days and see what happens. On day 42, you will listen for 150 seconds. Remember, you started with 100 seconds a day, and on day 42, you're still only listening for 150 seconds, and you have 42 "X's" on your calendar, which has created a very nice chain. Do not break the chain. Let's continue. Let's say you keep it up all year. What would the results look like when you reach day 365? Well, they would look like this. And on the 365th day, you would already be listening for 3,740 seconds a day. Remember, you started with just 100 seconds, and at the end of the year, you're at 3,740 seconds. If we translate that into minutes, that would be roughly 62 minutes a day. If you remember at the beginning of the video, we said that if you improve one percent every day, you'll be 37 times better at the end of the year. Would you like to see where that number came from? Well, you simply divide 3,740 seconds by 100 seconds, which was the initial score, and you get 37.4. In other words, you become 37.4 times better at listening to audiobooks by the end of the year.

Here's the interesting part: if we added up all the seconds you listened to throughout the year, how many books would that be? Well, the total amount of seconds would be 367,834. Again, if we translate that into hours, it would be 102 hours. If we consider that the average audiobook is about five hours long, that means you've read roughly 20 books over the course of a year. That's not a small number; the average person doesn't even read one book a year. Reading, say, 20 business books over the course of a year is like talking to 20 of the smartest business people on the planet.

If we take the data from day one to day 365, and then translate it into a graph to see how progress has progressed over the year, you get the same graph I mentioned at the beginning of the analysis (google what an exponential graph looks like if you don't already know). Again, take a good look at this graph, especially the part at the beginning where the progress is almost flat. No matter what habit you start, you need to be comfortable with being on a straight line for long periods of time. You just saw how even after 42 days, you only listen for 150 seconds. Progress may seem insignificant, but you are working on the basics. You are setting a habit; every habit must first be established before it can be improved.

Before we move on to the next lesson, here's another tip for making a habit more satisfying: When you start a new habit, there will be days when you won't be able to follow it. If you miss a day, make sure you never miss another time. The author says that everyone misses sometimes; nobody is perfect. The problem arises when we miss the second path. When we miss the second time, we create a habit of not doing the activity we previously signed up for. We send signals to our subconscious that say, "I don't care; that's not important to me." So the next time you miss out, make sure it's the first and last time.

**Lesson Number Three: How to Break a Bad Habit**

Breaking a bad habit can be quite simple once you learn how to create a good one. What you need to do is simply reverse those four laws we just discussed and make the bad habit less obvious, unattractive, difficult, and unsatisfying. For example, if you log into Instagram too much, you can delete the app from your phone. If you watch too much TV, remove it from the room, etc.

One bonus tip that I found very helpful in the chapter on how to break a bad habit is to find an accountability partner. When you're not only answerable to yourself but also to your accountability partner, giving up or making excuses won't be an option. Let me share a quick example: if you want to go to the gym regularly but have always failed when you've tried it alone, find a partner and agree that every time you miss or skip a workout, your next meal or protein, you have to pay. This will work because skipping the gym means that, firstly, you're not only disappointing yourself but also your friend; second, the next workout will be much more expensive, so it's not worth it to skip it.

I hope you found the book summary useful and inspiring. We are grateful that you are a member of our academy and happy because you are trying to change your life for the better, we try to publish as many summaries as possible, so stay active and try to find a colleague with whom you can talk about psychology in order to strengthen the habit, progress and have even more motivation for learning. Greetings.