I've noticed in the past that when I move to a new city
and new home, I tend to feel uncomfortable and even a bit
scared for the first three days. For the first three weeks,
I'm just somewhat uncomfortable, still adjusting to my new
surroundings. After that, I'm generally OK.
I was interested to learn recently that that three-week
period came up in a similar context: building a new habit.
Some experts believe that it often takes about 21 days for
people to adjust to big changes.
Now before you wonder what this has to do with investing,
keep it mind that for most of us, there are some critical
changes we can make in our lives that will make us more
successful with our money.
Ch-ch-ch-changes
Here are some new habits that can serve you well:
Reading annual reports regularly. This is
how big investing names such as Warren Buffett and Jim
Rogers have gleaned many insights. It's how you can get and
stay on top of many industries. If you're interested in
profiting from the growth in medical devices and robotics,
for instance, the reports from
Medtronic (NYSE: MDT),
Stryker (NYSE: SYK), and
Intuitive Surgical (Nasdaq: ISRG) will give
you lots of insight. Similarly, if the oil industry
interest you, look at what
ExxonMobil (NYSE: XOM),
ConocoPhillips (NYSE: COP), and
Chevron (NYSE: CVX) have to say about their
experiences.
Saving and investing more. You might, for
example, put $10 in an investing jar every day, taking it
to the bank every now and then, and investing in stock
whenever it totals several hundred dollars. That daily $10
will come to $3,650 in a year -- and if it grows at 10% per
year for 25 years, it will become almost $40,000. If you
save and invest that much each and every year, you'll top
$385,000 by 2034! You might end up with more, if you choose
some stocks well. Over the past 20 years, for example, the
not-
thatÂ-exciting company
PepsiCo (NYSE: PEP) has averaged nearly 12%
annually, turning a one-time $3,650 investment into more
than $33,000.
Spending less. There are lots of ways to
get that $10 each day. Two to four of the dollars might
come from your coffee habit, if you get into the practice
of making your own brew at home each morning instead of
buying it on the road.
Investing smarter. You might also develop
new investing habits -- perhaps not letting yourself buy a
stock until you write down
whyyou're investing in it, and after you've
studied it from many angles. Cutting out impulse buys can
improve your performance considerably.
How to develop those habits
So now that you have a few habits you want to develop
(including, perhaps, going to bed earlier, playing tennis,
and eating more vegetables), how long will it take you to
really make them stick? Three weeks? Well, maybe not. A study
in the
European Journal of Social Psychologyoffers a new
look at that question. It found that:
So there's good news for us here. It may not be easy to
develop a new habit, but it can be done -- and it can be very
worthwhile and profitable, too. Just stick with it for more
than a few days, giving it a chance to take hold. You could
see your investing results improve significantly.
This article was originally published as
Habits You Won't Want to Kickon
Fool.com
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