Sunday, June 15, 2014

Habits, Happiness, and a Potpourri of Weekend Ideas

This post from SMB builds on a TED talk that makes the case for doing something for 30 days as a way of building new patterns of behavior.  Viewed in that light, what we call "discipline" is not the goal of a change process, but an intermediate step.  It takes discipline to do something consistently and routinely for 30 days, but once we internalize the repetitions, what formerly took effort now becomes second nature.  Driving a car is a good example of this:  initially it takes effort and considerable conscious thought; eventually it becomes a natural part of us.  The goal of trading psychology should *not* be instilling discipline, but rather using discipline to instill positive habits.  

*  Per the above, choosing a single goal, identifying a specific change connected to that goal, making that change for 30 days, and keeping a 30-day journal to track results would be a much more effective program for change than tackling many goals at one time and never consistently implementing changes connected to those goals.  From this perspective, setting goals is not what creates change--it's turning those goals into consistent habits.

Abnormal Returns links a WSJ article about simple truths that investors typically get wrong.  One of those is assuming that making money will bring happiness.  Despite talk of a hedonic treadmill--that we maintain a relatively constant level of happiness through life--there is evidence that specific life changes are associated with improvements in happiness.  Interestingly, some of those changes are ones specific to lifestyle and not to monetary success per se:  spiritual development, healthier lifestyle, etc.

*  Interestingly, one of the best predictors of happiness in the study was the gap between how many hours you work per week and how many you would like to work.  Those who feel overworked (they'd like to work fewer hours) and those who feel underworked (they'd like to work more hours) are less happy than those who are working as much as they like. 

*  The positive psychology work of Ed Diener and colleagues also tends to challenge the notion of hedonic treadmill.  One important observation is that we have different happiness set points for different facets of life:  work, marriage, etc.  Also, our level of positive emotion can change more or less than our level of negative emotion.  An important component of positive experience, the authors note, is life satisfaction.  In many ways, focusing on life satisfaction is more important than focusing on the rises and falls in positive and negative mood.  

*  To bring the above topics together, it's interesting to speculate on what a 30-day program to increase happiness and life satisfaction might look like--and how such a program might impact one's work performance.  Suppose you dedicated X minutes per day to doing something that was deeply personally rewarding.  Might the resulting satisfaction broaden into other experiences during the day and build a much more general sense of well-being?  Not a bad personal project!

Further Reading:  Well-Being and Trading Performance