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Measure yourself using the same techniques the Fortune 500 uses

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[RSS readers: Click here to see the embedded spreadsheets in this post.]

I have a very attractive single female friend who’s convinced that she needs to lose weight to get a boyfriend. I took one look at her a few months ago and said, “You’re crazy.” She looked great. Despite my comments, she decided to spend the last six months being ultra-disciplined about her diet and exercise. She’s lost weight and looks even better now.

The thing is, she’s still gotten 0 dates.

If she were being intellectually honest, she would have kept a spreadsheet that looked like this:

It’s hard to ignore data as objective as this. Sure, maybe weight matters, but it’s clearly not the most important factor to work on. So today, I’m going to show you how I track spending, eating, etc — and give you templates to do the same.

See, I don’t understand people who do increasing amounts of work without measuring the results. I want to invent a time machine, go back in time, find a stegosaurus tail, come back, and beat these people in the face with it. At least then I can be hailed as a hero for inventing a time machine.

Seriously, why would you spin your wheels without figuring out a way to analyze what’s working and what’s not? After analyzing my own time, I’m convinced that about 30% of what I do really matters, 30% might matter, and 30% is completely worthless. The key is finding out which of your efforts are producing big results. As Tim Ferriss wrote in The 4-Hour Workweek,

Out of more than 120 wholesale customers, a mere 5 were bringing in 95% of the revenue. I was spending 98% of my time chasing the remainder…The end result? I went from chasing and appeasing 120 customers to simply receiving large orders from eight…my monthly income increased from $30K to $60K in four weeks and my weekly hours immediately dropped from over 80 to approximately 15.”

(Read my review of The 4-Hour Workweek, which led hundreds of people to buy a copy of the book.)

Now that’s measurement. And while 2007 was the year of conscious spending, 2008 is the year of measurement. Here’s how to use measurement to persuade yourself to change.

* * *

So, what should you track?
It’s important to track the right things. My friend could have tracked the color of her socks or the saltiness of her almonds, but I bet that wouldn’t have had a very strong correlation with her getting men. Here are 10 ideas for items to track, but I’ll bet you capture 90% of the bare necessities if you track just these things:

  • What categories you spend money on (and how much)
  • How many calories you eat
  • How often you work out

How to track: Use the Think, Want, Do Technique
This is a technique I came up with a few years ago when I started tracking a bunch of things in my life. Let’s use monthly spending as an example.

First, write down what you think you spend.

Second, write down what you want to spend.

Third, write down what you actually spend. (This is where you track it and add it daily.)

Then compare the “actual” chart to the other charts. I guarantee you, the numbers will stun you. When I first started tracking my spending, for example, I discovered that 70% of it was going towards eating out. In one final move of disgust, I wanted to kill myself by buying a bag of cheetos and stuffing every single morsel in my mouth at once. I would then ask Alanis Morrisette to give my eulogy, during which time she would learn the actual meaning of irony.

Why bother tracking any of this?
Yes, it would be easier to do nothing. But I’d rather do less and get more results. That means having a little short-term pain while you build up an infrastructure to track what’s actually working out of all the things you’re doing right now.

Also, you can’t track this stuff in your head. We’re not properly wired to remember how much we ate or spent — even though, if you ask someone how much they ate/spent last week, they’ll confidently give you an answer. They don’t know what they’re talking about. We chronically mis-estimate for a variety of reasons.

Tracking actual data strips away ideology to show us reality. My friend, for example, was convinced that weight was the impediment to getting dates. Now she knows that weight alone doesn’t have a very big effect.

* * *

How to get started tracking today
The most important thing is to start tracking today. The point isn’t to set up the fanciest tracking system. it’s to learn from the results and change your behavior. (I aim for the most lightweight system I can create — mine has been going for years and is still a creaky collection of Excel, PBwiki, Quicken, Mint, and scraps of paper.) Forget being perfect. Just get started today.

1. Pick one thing to track and do it for four weeks (Use my templates below if you want). Use my templates for tracking spending, eating, or gym attendance.

2. Pick a place to track your progress. For money, I recommend any personal-finance software (try Mint, Quicken, or Excel). For anything else, create a free password-protected PBwiki. You’ll be able to type in your progress from anywhere you have Internet access.

3. Don’t worry about making the data structured so you can sort/analyze it. A few weeks ago, I found myself spending hours creating a fancy model to track how much I travel. I realized how stupid I was being, so I dumped the raw data into a plaintext PBwiki. After a month of data, I had my virtual admin go through it and analyze it. It cost me about $20 to have it professionally restructured and analyzed.

Here I’m tracking my commute times to see the optimal time to drive to work. Ghetto, but it works.

Ramit Sethi's wiki - Commute times to San Mateo

4. Use public commitment to maximize your chances of success. When I bet my friends $225 that I could gain 15lbs in 3 months, I invited them all to a wiki and updated it every week. This was incredibly motivational to me: The money was nice, but I didn’t want to publicly lose after posting my progress for all those weeks.

To use public commitment for your tracking, post a link to your spreadsheet here in the comments. I’ll pick out a few and highlight them on this blog. And if I choose yours, beware: I will make fun of you one month from now, on February 18th, if you don’t follow through.It’s up to you now!

Other resources to read: My NPR interview about measurement, an earlier post called How a beggar in Grenada uses data to optimize donations, and my delicious links on psychology, data, and optimization.

Want more? Read the archives and subscribe to future posts from iwillteachyoutoberich

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41 Comments

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  1. You managed to leave off the most important step in your guidelines, even though it is the premise of this post.

    Before you track numbers, decide why you’re tracking numbers. If the goal is to get dates, and you think there’s a correlation between weight and dates, then you have a viable reason to track weight.

    So, Step #0:
    Decide why tracking one thing that one thing will pay off.

    Possible answers:
    -It helps me relax about my lack of information (ie, I always know where my money is)
    -It helps me plan and schedule properly (ie, I know what calories are coming in, and when)
    -It helps remind me to do a thing (ie, it serves as a hint to work on my book some more, and provides motivation)
    -It helps verify the relationship I thought existed (weight and dates)
    -It helps me make on-the-spot decision in the future (I know what’s going on and how a change will impact me)

    Metrics serve many purposes. But metrics without a purpose can be dangerous.

  2. I had a look at Mint.com, it looks nice and well done. Would you mind telling us more about it?
    I’m using Quicken, I can’t say I’m in love with it though. How much do you use Mint.com? Are you confident with having your financial information on a website?

    Thanks!

  3. May I be so bold as to say that this post is a brilliant combination of personal development and the utilization of quantifiable data in an effort to maximize results?

    Love it. I’m forwarding it to on to others.

  4. @Tim – There is a lot of argument over Mint on the financial blogosphere (I hate myself for using the word “blogosphere,” btw). Some people like it a lot, some people think it’s crazy to give over that much financial information to a website which could potentially be hacked, and some people think it’s unethical they advertise for credit cards when people are supposed to use it to save money and get spending under control (even though that’s how they make money because it’s free for users). I signed up when it first came out and spent a lot of time categorizing spending, etc which would have been useful, except it was so beta when they first launched that none of their tools functioned correctly for me and I got frustrated. They have supposedly fixed a lot of it and are continuing to work on it. I still think that when it’s working correctly, it’s a really cool way to see how much of your income you spend on housing, eating out, other categories, etc, and a lot easier than doing it yourself in excel or Quicken. You might want to read some of the other PF blogger’s reviews about Mint before signing up yourself, but I was generally reassured by the founders who explained their security measures on various websites where people were arguing about it.

  5. Oooh, I love this! I’ve been tracking my spending for more than a year now (at the prompting of this website, in fact), I just have never really parsed the data.

  6. […] Posted by siliconprairie under Goals   One of my favourite bloggers, Ramit Sethi, posted his own take on measuring success today. In addition to the fact that when you start measuring something […]

  7. By quantifiying the data, your friend should see that she has a flawed hypothesis. Like most things, there are multiple variables affecting the outcome of her situation. She also may have inadvertently modified more that one variable when she needs to have controls. Consider a revised hypothesis:

    W(weight) + F(free time) + M(Males) + S(Standards) + P(Personality) = D(Dates)

    This is still oversimplified, but if she reduced F in conjunction with W rather than keeping F constant, it could affect her outcome negatively. Likewise, S could be inflexible, resulting in a zero result for D regardless of values for the other variables in certain circumstances. P on the other hand, can have a direct impact on the number of M. If P is focused on W and D to the exclusion of all else, then M will not correlate to D.

    One hypothesis, proven in many other case studies is that a reduction of S will result in a high value for D and can have better results than reducing W alone.

    Just wanted to present this is a broader spectrum….

  8. How do you beat somebody with a “tale”?

    Just repeat it over and over until they lose their mind?

    I’ve never heard the tale about the Stegosaurus. Could you share it with us?

  9. What HD points out above is that tracking and measuring the various aspects of our lives to see what works best is actually a very scientific way of doing things (it’s pretty much the essence of the scientific process).

    Unfortunately, HD, you’re not supposed to tell that to the masses. Ramit is trying to get the general public to do this stuff by spoon feeding it to them nice and easy and purposely avoiding actually telling them they’re being scientific. Now that you’ve let the cat out of the bag, good luck getting anyone to do this stuff…

    Seriously though, Ramit, this is a great article. I hope all of your readers implement at least some of these practices into their lives. And, FWIW, I looked into Mint–what a genius idea! I already signed up. I think I’m going to love using it as much as I hate using Quicken.

  10. MarkS: Oops, how embarrassing. Fixed. Thanks.

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