The Power of Habit: A Book Review

Recently, I signed up for a three month promotion to receive a free monthly audiobook of my choice from Amazon Audible.  Now, normally I don’t like audiobooks because you can’t do a simple word search like you can with an ebook or a quick flip through like you can with a physical copy.  But I’ve started to appreciate audiobooks because they help me relax my eyes after a long day (or week) in front of my computer.

The first book I chose was The Power of Habit by Charles Duhigg.*  As the title implies, the book illustrates how habits can control individuals and entire corporations, and how one new habit can snowball into life-changing results.  For example, Duhigg shares stories of how habits have helped people overcome addictions, propelled corporations to world prominence and transformed small boycotts into national social movements.

The book is best summed up with a quote in the final chapter by 19th century philosopher William James:

Habits, he noted, are what allow us to “do a thing with difficulty the first time, but soon do it more and more easily, and finally, with sufficient practice, do it semi-mechanically, or with hardly any consciousness at all.” Once we choose who we want to be, people grow “to the way in which they have been exercised, just as a sheet of paper or a coat, once creased or folded, tends to fall forever afterward into the same identical folds.”

Personally, this book captures the essence of how I look at life and finances.  By choosing the right habits, we can transform ourselves from spenders to savers almost effortlessly.  And sometimes, those habits can be entirely unrelated to finance.

To give you an example, I started this year with the resolution to eat healthier.  That resolution has led to the new habit of lowering my carb intake, which in turn has motivated me to do pushups everyday.**  This new, healthier lifestyle has translated into both higher productivity at work and a pursuit of new interests like writing this blog.  And writing this blog has now inspired new habits of increasing wealth through sales on Craigslist, packed lunches and taxed deferred 401k contributions.  All of these changes started with a simple New Year’s resolution that created a momentous snowball effect.***

To make a long story short, I liked the book.  Although it’s probably not worth listening to the 11-hour audiobook version, I’d recommend the ebook or hard copy to anyone who wants to make a change or understand how habits work.  As an added bonus, Duhigg’s anecdotes are entertaining, and readers will most likely find specific stories that are applicable to themselves.

*Note that if you decide to buy through that link, I’ll get a small referral commission from Amazon. 

**I started with 25 pushups on the first day and added one each day until I reached 50.  Now I do 40-50 pushups every day! 

***We see this same snowball effect in our finances when interest compounds and dividends are reinvested.




Individual Stocks vs. Index Funds
Saving Money with Packed Lunches

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