The more I go through life, the more convinced I am of how so much of what we do and who we are are a compilation of our habits. Of course, habits can be beneficial or harmful. It goes without saying that we should strive to build up and sustain the good ones and avoid or eliminate the counterproductive ones.
Good habits are those consistent actions that benefit both our present and future selves, whereas bad habits do the opposite. Good habits ultimately should improve our physical, mental, and spiritual health as well as improve our resilience and capabilities by growing our financial strength, relationships, and physical stamina so that we can live a life of growth and purpose to answer whatever call inspires us and allows us to live life joyfully and fully while having the wherewithal to recover from setbacks. Bad habits do the opposite. They separate us from others as well as ourselves. They force us to turn within and live for ourselves and compromise our health, trigger cravings that can never be fulfilled, harm our earning power, lessen our chances of building up savings, and greatly diminish our overall enjoyment of life. Good habits allow us to feel more alive and expansive whereas bad habits make us feel more numb, deadened, and contracted.
Over the years I have tried to build up healthy habits. I feel like I have been able to establish enough of them to improve the quality of my life. Being a lifelong learner and having a curious mind, my antenna is always up to discover and adopt high payoff activities that I can sustain over long periods of time. I’ve written about some of these before but for those who haven’t read my blog or don’t remember these are things like:
- Preparing and consuming a daily smoothie (20+ years)
- Having at least 30 seconds of a cold shower (3.5 years) with every shower
- Working out twice a week with a trainer (Approximately 5 years interrupted by Covid lockdowns)
- Writing a weekly blog (Since 2013)
- Writing a quarterly article for CWS investors (Since 1999, perhaps earlier)
- Writing a letter as part of our Annual Investor Report (Approximately 15 years)
- Playing tennis at least two or three times a week (Nearly 3 years)
These have become rituals and integrated into my life such that they are almost automatic. They require very little thought, motivation, or effort. I do them because they are now enjoyable and they have helped me have a richer, healthier, and more enjoyable life.
Operating Rhythm and Rituals
The benefits of habits and rituals apply equally as well to businesses. At CWS we have developed an operating rhythm and rituals that have helped us stay in communication, work on the business, work in the business, cultivate and strengthen our relationships, and hopefully optimize our decision-making process to generate compelling insights that we can capitalize on while avoiding material risks.
- Weekly investment calls
- Bi-weekly capital calls
- Bi-weekly executive calls
- Due Diligence Calls
- Monthly community service calls
- Quarterly reporting and distributions
- Quarterly advisory board meetings
- Semi-annual investor calls
- Annual valuation reports
- Annual company meeting
- Annual investor meeting
- Annual strategic planning meeting for the company and departments
Building these into our system helps us improve our accountability, preparedness, and connectedness in ways that establish very beneficial corporate habits to improve our odds of making better decisions and strengthening our organizational cohesiveness. CWS has been in business since 1969 and many of these “habits” have been around for many years and have been immensely beneficial to the organization and our culture.
It is hard to adopt a new habit because it is easy to forget to do the activity because it has not been integrated into one’s life. It can also not be very enjoyable at first. It’s particularly hard to stop a bad habit.
As Warren Buffett has said,Chains of habit are too light to be felt until they are too heavy to be broken.Click To Tweet
Given this, it’s obviously best to stay away from harmful activities that can become habitual. It’s much easier not to start them than it is to break them.
The Power of Habits
I bring all of this up because I had something happen to me last week that was a stark reminder of the power of habit. I am in the process of having a pool being completed at my house. In order to pass the inspection to proceed with the last phase of construction, any access point (e.g. doors, gates) have to either have alarms or be latched so that kids cannot get to an unfenced pool without triggering an alarm or being able to get through the doors or gates. I have a gate that leads from my driveway to the backyard and for 20 years I have opened and closed it freely. It has swung open without any resistance because there was no reason to constrain it…until now with the construction of the pool. A latch was put on that prevents it from swinging open fully because of the resistance created by the latch. It now only opens about 25% of its previous maximum. As a result, you have to squeeze in to get through it.
I have not had that many reasons to go out through the gate since the latch was installed because of my travel schedule as well as no real need to go to the back. Since opening the constrained gate was not habituated into my life, it was easy to forget that the gate no longer opens swiftly and completely.
One thing I do have in the back is an orange tree, which is now in full bloom. I always have an orange that I eat with my smoothie. I don’t put it in the smoothie because the whole orange itself provides more nutrients than if it is blended in. I forgot to pick some oranges on previous days so when I went to look for one in the refrigerator I realized I had to go out and pick some since none were there. This was at 5:15 a.m. before my 6:00 a.m training session so I was still a bit tired and it was dark outside. I went outside on a mission to quickly get oranges and come back in since it was cold and wet out there. Being so tunnel-visioned and not having had enough experience opening the newly constrained gate, I was ripe (pun intended) for an accident. Sure enough one took place and it was painful and I was pissed.
I expected the gate would open like it always had, without resistance. So I swung it open fast with the intention of going quickly through the wide opening. Unfortunately, I pulled it hard but it only opened slightly and it went right into my left temple. Luckily it was early so no one was out to hear my loud cursing. It whacked me and I was definitely taken aback. I didn’t let it deter me from my mission of getting oranges, however. It was a powerful reminder of how at risk we can be when we do things on automatic pilot, especially when we are exposing ourselves to risk. I really do try to make a concerted effort to analyze the reasons why things go wrong. I can be very hard on myself and I am my own worst critic. I’m not hesitant to assign blame to myself liberally. In this instance, however, I have to let myself off of the hook. I just did not have enough experience going through the partially latched gate to have developed the muscle memory to habituate changing from my fast opening to being much more deliberate about it. Believe me when I tell you now
I will be forever cognizant of this risk. I truly learned from the school of hard knocks and I have the pain and bump to prove it.
In the midst of all of this, I had received my Covid booster approximately 36 hours before. The previous day I felt some side effects but fortunately, on the morning of the whack on the side of my head, I was doing much better, until that incident. Fortunately, my training session went well in spite of my sore temple.
I mentioned how dangerous it is to live life on an automatic pilot, especially when it comes to exposing ourselves to risk. One way of doing this is by being closed-minded and suffering from confirmation bias whereby we only look for evidence that supports our beliefs. I have seen people over the years make investment decisions based on ideology versus rationality and it has cost them money through either bad investments or missing out on good ones.
Vaccines are a non-financial example of ideology and confirmation bias impacting people. There’s obviously skepticism among a large segment of society about Covid vaccinations. It applied to me at first as well, although I would describe my attitude as skeptically optimistic. I was hoping they would be effective while also being skeptical about the logistical and cold storage challenges of delivering vaccines in such large quantities as well as the historically fast development time frame relative to other vaccines.
I felt no need to be a pioneer. I wanted to see the data before determining whether I would get vaccinated. Once studies started being released I became convinced that the reward was worth the risk. And while I’m younger than 65, this chart is an example of data that helped convince me that the benefits of getting vaccinated, plus the booster, outweigh the risks. Of course, we may not know the true risks until years from now but I’m willing to accept that unknown for a pretty compelling benefit in the present.
And yes, there was a little bit of cost to my present self in the sense that my arm was hurting and I had some chills and maybe a slight fever but just like when you’re working out and you know it can be a little painful and taxing at the moment, you also know that in the long run, it should be very beneficial. I have seen enough data to show that for those that are vaccinated, even if they get Covid, that the chances of being hospitalized or dying are infinitesimally small, especially for someone my age and in my condition.So I weighed the risk and reward and chose to get vaccinated and boosted. That's how I look at life. Click To Tweet
Just a Bundle of Habits
We’re just a bundle of habits and hopefully, those habits are ones that keep expanding our capabilities, allow us to grow in many aspects of our lives so that when we look back 10, 20, 30 years from now we can see that those habits not only extended our lifespan but made the quality of our life immensely better.
My present and future selves are in a beautiful dance together and we will keep twirling forward as long as the habits I adopt are positive and life-affirming.