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Aug 03, 2019 21:10:36

Atomic Habits, by James Clear (1): Compound interest of habits, systems over goals, identity

by @jasonleow | 1900 words | 346🔥 | 384💌

Jason Leow

Current day streak: 346🔥
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I just read Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones, by James Clear.

By far, this was one of the best habit books out there. Lots of case studies and examples, but it does not drag on too much and get boring. Yet it is full of practical tips and techniques based around an easy framework. With this, it really made me reframe my perspective about habit formation - that it is not just a random collection of heuristics that other people found useful, but a skill that we can learn methodically, and incrementally get better in a scientific way, just like how we can build muscle by working out at the gym. Some key concepts that stood out for me, that really myth-busted lots of preconceptions I had about goal-setting and execution:

  • Grand gestures are over-rated. 1% growth through a small habit every day means 3700% growth at the end of 1 year.
  • Goals are over-rated. Results have very little to do with goals but more to do with habits systems.
  • Outcomes are over-rated. Habits that focus on identity, who you want to become, sticks around longer than habits that focus on the results you want to achieve.

This first post shared more of the theory and the why of Atomic Habits. The next post will be more about the how, practical tips and techniques. I learned a lot and am now really excited to try it out!

Sharing them here as reference for myself, and for anyone who might find it useful. This is not a book review, just raw notes lifted directly from the book, with some minor interpretations and categorisations of my own. This is part of my reading list for a new season.


Atomic Habits, by James Clear

The aggregation of marginal gains. 

If you broke everything you could think of that goes into riding a bike, then improve it by 1 percent, you will get a significant increase when you put them all together.

You do not rise to the level of your goals. You fall to the level of your systems. Habits are like the atoms of our lives. Small and mighty. Atomic habits are a regular practice or routine that is not only small and easy to do, but also the source of incredible power; a component of the system of compound growth.

The myth of big gains 

It is so easy to overestimate the importance of one defining moment and underestimate the value of making small improvements on a daily basis. Too often, we convince ourselves that massive success requires massive action...Meanwhile, improving by 1 percent isn’t particularly notable—sometimes it isn’t even noticeable—but it can be far more meaningful in the long run. 1% better every day for one year = 1.01**365 = 37.78

Compound interest of habits

Habits are the compound interest of self-improvement. We often dismiss small changes because they don’t seem to matter very much in the moment. Success is the product of daily habits—not once-in-a-lifetime transformations. 


You should be far more concerned with your current trajectory than with your current results. If you’re a millionaire but you spend more than you earn each month, then you’re on a bad trajectory. Your outcomes are a lagging measure of your habits. Your net worth is a lagging measure of your financial habits. Your weight is a lagging measure of your eating habits. Your knowledge is a lagging measure of your learning habits. You get what you repeat. 

Predict your life

If you want to predict where you’ll end up in life, all you have to do is follow the curve of tiny gains or tiny losses, and see how your daily choices will compound ten or twenty years down the line. Time magnifies the margin between success and failure. It will multiply whatever you feed it. Good habits make time your ally. Bad habits make time your enemy.

Progress is not linear

Habits often appear to make no difference until you cross a critical threshold and unlock a new level of performance. This pattern shows up everywhere. In the early and middle stages of any quest, there is often a Valley of Disappointment. You expect to make progress in a linear fashion...it doesn’t fee like you are going anywhere. It’s a hallmark of any compounding process: the most powerful outcomes are delayed. People make a few small changes, fail to see a tangible result, and decide to stop. You work is not wasted; it is just being stored. When you finally break through, people will call it an overnight success. The outside world only sees the most dramatic event rather than all that preceded it. 

Mastery is gardening

Mastery requires patience. All big things come from small beginnings. The seed of every habit is a single, tiny decision. But as that decision is repeated, a habit sprouts and grows stronger. Roots entrench themselves and branches grow. The task of breaking a bad habit is like uprooting a powerful oak within us. And the task of building a good habit is like cultivating a delicate flower one day at a time.

Focus on systems over goals

Prevailing wisdom claims that the best way to achieve what you want in life is to set specific, actionable goals. Eventually, results had very little to do with goals but nearly everything to do with the systems followed. Goal is build a million-dollar business. System is how you test product ideas, hire employees, and run marketing campaigns. Goals are good for setting a direction, but systems are best for making progress.

Problem with goals

  • Winners and losers have the same goals. Winners have a system of continuous small improvements.
  • We think we need to change our results, but the results are not the problem. What we really need to change are the systems that cause those results. When you solve problems at the results level (e.g. you tidy up your room), you only solve them temporarily (having a one-off clean room). In order to improve for good, you need to solve problems at the systems level. Fix the inputs and the outputs will fix themselves.
  • Goals restrict your happiness. Goals-first mentality means you’re continually putting happiness off until the you reach your goal. A systems-first mentality means you fall in love with the process rather than the product. You can be satisfied anytime your system is running.
  • Goals are at odds with long-term progress. Goals-first mindset creates a “yo-yo” effect. Once you reach your goal, you revert to old habits. Commitment to the process that will determine your progress.

Outcome vs identity 

Outcome-based habits focused on what you want to achieve. With identity-based habits, the focus is on who you wish to become. 

Real change sticks via identity 

Behind every system of actions are a system of beliefs. Habit change without identity/belief change is hard. Behaviour that is incongruent with the self will not last. The ultimate form of intrinsic motivation is when a habit becomes part of your identity. True behaviour change is identity change. You might start a habit because of motivation, but the only reason you’ll stick with one is that it becomes part of your identity. You act like the type of person you already believe yourself to be. Identity conflict is also the biggest barrier to change (“I’m not a morning person”), be it group/cultural identity, or personal identity. Your habits are how you embody your identity. Every action you take is a vote for the type of person you wish to become. No single instance will transform your beliefs, but as the votes build up, so does the evidence of your new identity. 

Just decide: Who do you want to be?

Decide the type of person you want to be. Prove it to yourself with small wins. Start from the goal/results and work backwards to the type of person who could get those results. E.g. how to make $1mil, to who is the type of person who can earn $1mil? What would a millionaire do? 

Feedback loops

Habits shape identity, identity shapes habits. Let your values, principles, and identity drive the loop rather than your results. The focus should always be on becoming that type of person, not getting a particular outcome. Who you want to be? It’s not about having something, it’s about becoming someone.


Identity can work against you. Identity can blind you to weaknesses. Avoid making your identity an overwhelming portion of who you are. Keep your identity small. If a single belief/role/job defines you, the less capable you are of adapting. Mitigate by redefining identity - keep important aspects even if particular role changes, e.g. “I’m a CEO” to “I’m someone who builds and creates things.”

Talent & genetics

The secret to maximizing your odds is to choose the right field of competition. Habits are easier to perform, and more satisfying to stick with, when they align with your natural inclinations and abilities. Embrace the truth that people are born with different abilities. Genes can be powerful advantage in favourable circumstances and a serious disadvantage in unfavourable circumstances. Not just well trained, but well suited to the task. Genes predispose, not predetermine.

Tailor habits to fit your personality—openness to experience, conscientiousness, extroversion, agreeableness, neuroticism.

Find the game where the odds are in your favour. Explore in beginning, then exploit later. If you are winning, then keep exploiting (with occasional explore). If losing, then keep exploring. Find a more favourable environment from odds against you to where it’s in your favour.

Genes don’t eliminate the need for hard work, but clarify it. They tell us what to work hard on. Our strengths indicate where to spend our time and energy.


  • What feels like fun to me, but work to others?
  • What makes me lose track of time?
  • Where do I get greater returns than the average person?
  • What comes naturally to me?


Greatest threat to success is not failure but boredom. As habits become routine, they become less interesting/satisfying. Easy to work hard when motivated, the difference is to keep going when it’s boring. Pros stick to schedule; amateurs let life get in the way. 

Variable rewards and continuous novelty helps combat boredom. But no habit stays interesting forever. You have to fall in love with boredom, or fear not doing it more.

Downside of good habits

Autopilot leads to less sensitivity to feedback, and stop paying attention to errors. Leads to slight decline in performance. 

Habits + Deliberate practice = Mastery

But to have mastery, you can’t blindly repeat the same habits and expect to be exceptional. You need a combination of automatic habits and conscious practice/performance. Set up a system of reflection and reviews to make adjustments and fine-tune habits.

Annual Review at end of year:

  • Tally your habits in numbers
  • What went well?
  • What didn’t go so well?
  • What did I learn?

Integrity Report at mid year:

  • On track?
  • How am I living and working with integrity to my values?
  • Is this who I want to be?

From Jason Leow's collection:

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  • 1

    It's a great book and I read in February (not finished).
    There are so many books keep warning you "that's good, that's bad; don't do this,you have to do that." But this book is different.
    James Clear provides a bridge between "I know sleep is important." and "I still stay up late everyday." by telling you the power of habits. That's amazing. This power is beyond breaking bad habits.

    5plus6 avatar 5plus6 | Aug 03, 2019 23:27:46
    • 1

      @5plus6 yes. It's mindblowing what one can achieve if one can build any habit one wants

      Jason Leow avatar Jason Leow | Aug 04, 2019 21:05:44
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