I love planning for the new year – both personally and professionally. To read about my professional planning, check out this article.
I've always been a big-picture person, so I tend to think in 5, 10, and 20-year increments ... but thinking about the coming year is helpful, too.
I think about it a bit like using a map. Even if you know your intended destination, you still have to start with 'where you are' to figure out the best way to get there.
There are seemingly infinite potential paths ... but motion in a direction isn't really "progress" if it doesn't take you towards your desired destination.
At midnight tonight, it'll be 2024. I know a new year isn't really a blank slate, but I've always enjoyed the symbolism. So, I thought I'd revisit how I set New Year's resolutions.
To start with, resolutions only work if you actually "want" to make them happen. It's one thing to hope that something magically falls in your lap; it's another to want to do the work.
With that being said, here are some tips.
- Focus on What You Want.
- Focus on Why You Want It.
- Focus on Ways You Might Get it.
- Focus on Evidence of Progress.
Below, I'll take you through an example of each of the four steps.
Moving Towards a Solution, Rather Than Suffering From the Problem.
Before I got back into my health, my first instinct was to think, "I need to lose weight." Knowing that "you're fat" isn't helpful … my head quickly translates that to something a tad more positive, yet generic, like: "I choose to be healthy and vital, and to live a healthy lifestyle."
Blah, blah … They are just words. What I needed was something specific, measurable, and actionable. How about: "I will lose 15 pounds and stop eating after dinner." OK, but that isn't inspiring, and there isn't much for me to do. I can do better than that.
Figure-Out a Big Enough WHY, Rather Than Worrying about the HOW's.
This post isn't about health and fitness; it is about the mindset and techniques you can use to set empowering goals and plans in any situation.
So, while I could list many ways to lose weight (and I might even remember to do some of them), leveraging a driving force creates momentum. In other words, the first step in "Doing" is knowing WHY you want something.
I really do want to be healthy, fit, and vital (it sure beats the alternatives), and I want to have the energy and confidence to live and enjoy my life fully. The world is my playground, and I want to take advantage of more opportunities to play with family and friends. However, to do those things, I must find better ways to live a healthy lifestyle.
The WHYs are just as important for business goals too.
Focus on Potential Solutions Rather than Problems or Challenges.
Obstacles Exist. The bad news: I don't eat fish, and I don't like vegetables (unless French Fries are vegetables). My joints aren't close to healthy from years of violent contact sports. I rarely get 7 hours of sleep, and who'd have thunk it, but being the CEO of a startup is stressful. The good news: none of those things matter ... and even if they did, it just would mean that I have a lot of room for progress.
It is natural to focus on obstacles. But most obstacles are surmountable - with a big enough WHY, I'll even start to eat vegetables. Instead of dwelling on the limitations, use them as a reminder to focus on potential solutions instead. They are beacons marking the way.
How do you do it? To focus on solutions, you can make two action-based lists: one is of things To-Do ... and another is of things Not-To-Do.
Here are some of the sample To-Do Items:
- I will drink more water than coffee.
- I will stretch or do basic calisthenics on days that I do not go to the gym.
- I will make a healthy shake as a meal replacement rather than a snack if I'm hungry between meals.
- I will focus on relaxation and meditation as much as I focus on strength & physical exercises.
Here is the actionable list of Not-To-Do Items.
- I will not buy new bigger pants or wear stretchy pants because of an expanding waistline.
- I will not eat snacks out of their container – and will portion out what I want first.
- I will not compare my current level of fitness to what I used to be able to do. Instead, I will focus on my actions and improvement.
Create Healthier Habits.
It is easy to follow a routine. So, here's another tip ... make your routine better. Here are some examples of things you could do to make being healthier happen with less effort.
- Pre-sort your vitamins into daily doses, and keep them by the coffee machine.
- Buy healthy snacks, like fruit, raw nuts, or organic energy bars (instead of chips). If Doritos aren't in your house, it's hard to eat them on any regular basis.
- When you do snack, don't keep them near you. Make yourself get up to get them. That'll make it harder for you to binge.
- Enjoy listening to music, audiobooks, or podcasts during your "exercise time." Dedicating time to something doesn't mean you can't be multitasking.
- Park at the end of the parking lot, so you get to walk.
- Meet with friends at the gym or a hiking spot rather than a bar or restaurant.
You get the idea. Get in the habit of looking for ways to create better habits. What habits could you alter slightly to make a big difference? Which things can you automate or outsource?
For two books about the subject, I recommend Tiny Habits by B.J. Fogg and Willpower Doesn't Work by Benjamin Hardy.
Focus on Your Progress.
In this case, it really is about the journey. Instead of tracking how far you have to go ... notice how far you've come. Utilize an internal locus of control. It is about creating energy, momentum, and a sense of possibility. You may have a big, hairy, audacious goal in mind. That's fine, as long as you realize that reaching each milestone along the way is still an accomplishment.
- Find shoes that don't hurt your feet.
- Pick a gym or a personal trainer that you enjoy.
- Run more than two laps without stopping.
It doesn't matter what they are ... they all count, as long as you know that you are moving in the right direction.
Summary
The point of this exercise was not really to focus on fitness. These techniques and goal-setting tools work in any situation. The principles are:
- First, figure out what you want and why it is important to you. Only focus on the few things that are actually important to you.
- Second, find something you can do, right now, which moves you in the right direction.
- Third, notice which things create (rather than take) energy. Spend your time on those, and automate or create routines to take care of the rest.
- Fourth, plan forward, but measure backward. Set milestones so that you can recognize and celebrate your progress.
In my business, this translates to having a mission and vision - it's what we want, why it's important to us, and a basic strategy to get there. Then, we create yearly "Big 3" goals that move us toward that long-term vision. Then, the team creates SMARTs (goals that are specific, measurable, attainable, relevant, and timely) and KPIs (key performance indicators) so they know where to spend their time, and what milestones tell them they're on the right track.
It isn't magic, but it works.
Hope this helped.
The Law (And Flaw) Of Averages
The law of averages is a principle that supposes most future events are likely to balance any past deviation from a presumed average.
Take, for example, flipping a coin. If you happen to get 5 "Heads" in a row, you'd most likely assume the next one should be "Tails" ... even though each flip has a 50/50 chance of landing on either.
Even from this example, you can tell it's a flawed law. While there are some reasonable mathematical uses of the law of averages, in everyday life, this "law" mostly represents wishful thinking.
It's also one of the most common fallacies succumbed to by gamblers and traders.
The concept of "Average" is more confusing and potentially damaging than you might suspect.
Perhaps you heard the story about how the U.S. Air Force discovered the 'flaw' of averages by creating cockpits based on complex mathematics surrounding the average height, width, arm length, etc., of over 4,000 pilots. Despite engineering the cockpit to precise specifications, pilots crashed their planes on a too-regular basis.
The reason? With hindsight, they learned that very few of those 4,000 pilots were actually "average". Ultimately, the Air Force re-engineered the cockpit and fixed the problem.
It's a good reminder that 'facts' can lie, and assumptions and interpretations are dangerous. It's why I prefer taking decisive action on something known, rather than taking tentative actions about something guessed.
via ReasonTV
Our Brains and the Illusion of Balance
Our brains are wired to find patterns, even in random events. This tendency, known as apophenia, can lead us to see connections where none exist.
The Misleading Law of Averages
It's this very tendency that fuels the misconception of the law of averages. We expect randomness to "even out" because we see patterns in short sequences. This can be tempting to believe, especially when dealing with chance events.
The law of averages is a common idea that suggests future events will even out past results to reach some average outcome. For instance, going back to our earlier coin-flipping example, after getting five heads in a row, it's natural to assume the next flip is "due" to be tails. However, that's not how probability works. Each coin flip is an independent event (with a 50% chance of landing on heads or tails), regardless of previous flips. The coin doesn't "remember" what happened before.
Apophenia isn't limited to coin flips. For instance, you might see your lucky number appearing repeatedly throughout the day, leading you to believe it has a special meaning – even though each instance is completely independent.
This natural desire for order and predictability can lead us astray when dealing with chance events.
Why is it Flawed?
The law of averages often leads to a misconception called the gambler's fallacy. This fallacy is the belief that random events can somehow "correct" themselves to reach an average. In reality, every coin flip, roll of the dice, or spin of the roulette wheel is a fresh start with its own discrete probabilities. The odds remain the same no matter how long the losing streak persists.
Are there ever times when it applies?
It's important to distinguish the law of averages from the law of large numbers, a well-established statistical principle. The law of large numbers states that as the number of random events increases, the average outcome gets closer to the expected probability. This applies in situations where many trials happen, and while past results of individual events are independent, the law describes the behavior of averages over a large number of trials. For instance, the average weight of a large sample of apples will likely be close to the expected average weight of an apple, even if some individual apples are heavier or lighter than expected.
However, in everyday situations (with a limited number of events), the law of averages is generally not a helpful way to think about chance or probabilities.
Understanding these misconceptions can help us make better decisions and avoid false expectations based on flawed reasoning.
Psychological Reasons Behind the Belief
Human decision-making suffers from a range of tendencies and biases.
Earlier, we discussed the tendency to find patterns, even where none exist. Next, we will consider cognitive bias. In our coin-flipping example, it is the representativeness heuristic that makes us assume that small samples should resemble the larger population they come from.
Emotional factors also play a role. The desire for control in uncertain situations can make us latch onto the law of averages as a comforting notion. Believing that things will "even out" gives us a sense of predictability and fairness in an otherwise random world.
Additionally, social influences can reinforce these beliefs. Stories and anecdotes about streaks ending or luck changing often circulate among friends and family, further embedding the misconception into our collective consciousness.
Understanding these psychological reasons helps explain why the law of averages persists despite its flaws. Recognizing these biases can empower us to think more critically about probability and chance events.
Improving Decision-Making in Gambling and Investing
Recognizing the fallacy of the law of averages can significantly enhance decision-making, particularly in gambling and investing. Understanding that each event is independent can help participants make more rational choices. Instead of chasing losses with the hope that a win is "due," savvy speculators understand their odds remain constant and may choose to walk away or set strict limits on their betting behavior.
In investing, this knowledge is equally crucial. Many factors influence markets. Nonetheless, believing that a stock "must" rebound after a series of declines too often leads to poor investment decisions. Investors who grasp that past performance does not dictate future results are better equipped to evaluate investments based on fundamentals rather than emotions or flawed expectations.
By dispelling these misconceptions, you can approach gambling or investing with a clearer mindset, reducing the risk of substantial losses driven by erroneous beliefs about probability and chance.
You can also eliminate fear, greed, and discretionary mistakes by relying on algorithms to calculate realtime expectancy scores and take the road less stupid. Take a different kind of chance. Just ask our AI Overlords; they'll tell you what to expect!
Posted at 06:25 PM in Business, Games, Ideas, Just for Fun, Market Commentary, Personal Development, Science, Sports, Trading, Trading Tools | Permalink | Comments (0)
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