Visual learner? Watch the animated video summary of The Compound Effect!
In This Article
Introduction
It seems like wherever we look nowadays thereâs a clickbait headline trying to grab our attention. Have you seen them?
You know, the ones claiming to instantly and magically fix a long term problem that we could be facing:
âTake this magic pill and lose 30 pounds of body fat in one week!â
âLook instantly younger and sexier with this magic cream!â
âMake $100,000 in one month with this magic investment!â
They seem to be everywhere… But, have you noticed the buzzword here?
Magic.
Now, personally, for me I donât want to count on magic in order to become successful. How many successful people have you heard saying I magically became successful?
For me itâs zeroâunless theyâre an actual magicianâŠ
The Compound Effect Summary
The truth is, we’ve been lied to about success, and it’s time someone told you straightâwithout all the fluff.
For the most part, there is no quick solution to long-term problems. Many of the companies claiming this kind of thing just want you to part with your hard-earned money.
Success doesnât come in a sexy-looking box.
In fact, success is very unsexy…
The Compound Effect was written by Darren Hardy in 2010. It is a book Iâve found myself coming back to quite a few times over the years. It is short, insightful, and packs a lot of useful gems.
The book explains that there is no such thing as a magic pill or overnight success. In fact, The Compound Effect works quite the opposite wayâŠ
All rightâso since weâre on the topic of magicâletâs start with an idea from the book called âThe Magic Pennyâ.
The Magic Penny
For those who havenât heard this story, suppose you and your friend had stumbled across a special genie one day.
The genie is bearing two gifts.
One gift is three million dollars.
The other is a magic penny that doubles every day for 31 days.
You can pick one, and your friend can pick one, but you both canât pick the same thing.
Your friend immediately jumps in and thinks itâs an easy win; they take the three million dollars; they left you with a single penny that doubles everyday for one month.
The genie grants the gifts and vanishes forever. The clock starts tickingâŠ
Day 5
Five days later, your multi-millionaire friend is flaunting their newly-acquired wealth. Maybe you feel like a fool, because your magic penny is only sitting at 16 cents…
Day 10
Well, what about Day 10?
Unfortunately, itâs still much of the same, with your penny only sitting at $5.12. This isnât good…
But, letâs double that time and take a look at Day 20.
Day 20
Well, your fortune (or lack of it) still pales in comparison to the three million even at Day 20, as youâre only sitting at $5,242.88. Weâre a long way off…
Or are we?
Well this is where things get interestingâŠ
Day 25
Over just 5 more days, your penny continues to double in value everyday, and at Day 25, your small fortune is beginning to shape up, with your $5,242.88 now sitting at a little over $167,000.
But, thereâs only a few days left of the month. Let’s fast-forward.
While your friend thought they made the right decision, your magic penny slowly crept up over the next five days.
Day 31
By Day 31, and your measly penny has now amassed a grand value of nearly $11,000,000âwell over three times as much as your friendâs $3,000,000.
By this time, your friend now realizes their mistake, is gravely embarrassed about it.
The eighth wonder of the world is compound interest. He who understands it, earns it. He who doesnât, pays it â Albert Einstein
Okay, maybe I was a bit harsh on the concept of magic before, because the force at play right here is what a lot of people refer to as âthe magic of compoundingâ.
Except like what you see in those gimmicky headlines, the magic here is real, compounding is real, and its force can be equally as powerful in any aspect of your life.
In fact, whether you are studying, relaxing, eating, sleeping, feeding the dogâwhatever it isâthe compound effect is at play.
So, now that we have a solid grasp on compounding, letâs explore some real-life examples to see how compounding can really affect our livesâŠ
The Three Friends
Meet Scott, Brad and Larry.
These chaps are three friends who live in the same neighbourhood.
They are all married, generally healthy, and each making around $50,000 a year. To you or me, these guysâ lives wouldnât really appear any different from one another.
Scott’s Changes
Scott decides to cut 125 calories from his diet every day, by substituting his favourite soda at lunchtime for a glass of water instead. He also decides to listen to some inspirational audiobooks on his daily commute to work at a warehouse, instead of tuning in to the radio.
Although these are small and seemingly insignificant changes, Scott is determined to stick with them.
Brad’s Changes
On the other hand, Brad wants a more comfortable lifestyle.
He goes ahead and installs a bar in his garage, and adds an alcoholic drink every Friday to his diet.
But this isn’t enough…
He also purchases a large TV to accompany the bar, where he often sits and watches his favourite cooking programmes. After watching the shows, he begins testing out the recipes he sees on the TV in his own kitchen, cooking cheesy casseroles and crafting sweet and sexy desserts.
Larry’s Changes
Finally we see Larry.
Although he is generally bitter about having what he considers to be a mundane life with no exciting changes, he decides to play things safe and remain the same. He does not make any changes to his lifestyle whatsoeverâŠ
5 Months Later…
Fast forward five months and the three are still going through life taking the same daily actionsâŠ
Scott is learning more and more through his self-development books, Brad is looking forward to his Friday cocktail and cherry trifle, and Larry is drifting by on autopilot.
There are no noticeable changes among the three friends. They still pretty much look exactly the same. After all, five months isnât enough time for any of them to appear any different in their lives.
15 Months Later
In fact, the same applies 10, 12, even 15 months later. No real noticeable stuff…
18 Months Later
Only when month 18 arrivesâa year and a half laterâwill we start to see any noticeable differences⊠And Iâm talking tiny.
Scott is slightly toner than Brad because he has been opting to take the stairs at his warehouse job instead of using the elevatorâa tip which he learned to put into effect from the audiobooks.
And Larry, well, remains his usual self. Larry remains Larry.
31 Months Later
Fast-forward to month 31âa little over two and a half years since these small changes were put into actionâand the results are shockingâŠ
Scott has lost 33 pounds in total from cutting out the 125 calories in the daily soda he drank previously. He has also put over 1000 hours of new knowledge he had learned into practice at work and at home, and managed to earn a promotion and a raise as a result of his positive actions. But most of all, Scottâs marriage is thriving.
Brad has gained 33 pounds in total from consuming 125 more calories per day, meaning he is now a whopping 66 pounds heavier than Scott! As a result, he becomes unhappy and begins to withdraw from the people around him. His relationship with his wife begins to dwindle due to his negative mood and lack of positive change, and his marriage begins to fall apart. He does not know how to examine himself and improve his life because he has not read any self-development material, like Scott has.
Larry is exactly where he was 31 months ago, though he is much more bitter about itâŠ
The Power of The Compound Effect
Now, these changes were small and unsexy. Perhaps they were even uninteresting and unheroic. Yet, over time, the compound effect began to show itself, and the differences between the three were clear as day, and between Scott and Larry astounding.
However, while the results were massive, the steps taken often looked insignificant. They offered little to no immediate results and it is only when they exercised these steps over a long period of time, that the results really started to shine.
If there’s one thing I want you to take from this book summary of The Compound Effect, I want it to be this:
Small, Smart Choices + Consistency + Time = RADICAL DIFFERENCE!
Or, as Aristole once put it: âWe are what we repeatedly do.â
But, how do we make the compound effect work as best as we possibly can?
In the book, Darren Hardy goes over five areas we can identify and change in our favor to achieve this.
1. Choices
It’s estimated that the average adult makes more than 35,000 decisions per day, a massive amount of these are completely unconscious, often influenced by family, expectations, lifestyle, culture, belief systems, the list goes on.
The choices we make can be our best friend or our worst enemy.
I mean just look around you, right now, everything you can see around you is a result of the choices you have made. Positive and negative. You make your choices, and then your choices make you.
Try to be more aware of the choices you make. Grabbing an unhealthy snack? Think again, replace it with something healthy. About to make an impulse online purchase? Think again, put it on hold for 24 hours and see if you still want it the next day. Not subscribing to the Motimation YouTube Channel? Think again, you might learn a lot. You get the point.
Make the type of choices to propel you a little further. Improve your relationships by saying I love you to the people you care about the most. Make that business call youâve been dreading to make. Walk that extra half-mile. Swap sugar for sweetener. Replace that 10-minute entertaining video with a 10-minute self-development video.
I promise you, by doing that over time, you will see positive results.
2. Habits
With enough practice and repetition, habits become automatic over time. The things you do now on autopilot are the habits you have formed and solidified over the years to a point where they just get done without much focus or attention.
Most people let their habits form unconsciously. These habits then go on to dictate choices and can even hinder the possibilities and opportunities in someoneâs life, all while growing stronger, and becoming more difficult to change.
Slowly begin to identify good habits that will aid you towards your goals, and nurture them on a daily basis, one at a time. Determine a clear and concise reason for your desired habits, and slowly introduce them into your life.
If you want to remove bad habits, identify your triggers. What makes you perform these bad habits?
Then go on to try to eliminate those triggers from your environment.
For example, if you drink beer, and want to quit drinking on weekdays, move the beer from your fridge to your cupboard, youâll find it a lot easier to stick to it, because who wants warm beer?
But, be patient. You might have spent years repeating bad behaviors. Itâs going to take a long time to replace them with good ones. Stick at it.
3. Momentum
For anything to gain momentum, it needs an initial push.
When I wanted to start going to the gym, the hardest part for me was the beginning. Making up my gym bag before bed. Changing my diet and eating more protein. Making the initial push out of my comfort zone and placing myself in a new environment.
But, much like a spinning wheel, once you make that initial push, things can keep going a lot easier without the need to keep pushing.
Start small, though, and ease yourself into your new lifestyle gradually.
If you want to be more active, walk 10 minutes for the first day. If you want to read more, start with a couple of pages in the evening.
Iâve seen people go from being completely inactive to trying to run 10 miles and burning out, or people who want to begin reading self-development books, buying 50 books in one purchase, leaving most unread. You donât want to burn out here.
You will know when momentum is taking place because things will no longer feel difficult to start. In fact, it will begin to feel strange not to do a particular thing that has become a regular part of your day.
Momentum is the way your current flows. Momentum is your sail in the wind.
4. Influences
In an age of the internet and information overload, influence is more important than ever.
Scientists have measured the amount of data that enters the brain and found that an average person living today processes as much as 74 gigabytes of information per day.
To put that into perspective, only 500 years ago, 74 gigabytes of information would be what a highly educated person consumed in their entire lifetime!
Take a moment to reflect on what information you are absorbing. What are you inputting into your brain?
When I did this, I realized I was absorbing tons of information through the news via newspapers, TV and radio. I was doing this every morning. And, looking back on things, every 100 news stories I came across, 99 of them were negative, and they would lower my mood.
Safe to say, I no longer watch the news, and feel much better for it.
Protect and safeguard your personal bubble.
Be mindful of negative energy and influences, whether itâs from places like the news or movies, the internet, or even your friends or family. You cannot hang out with negative people and expect to live a positive life.
Surround yourself with people who love you, energy that uplifts you, information that inspires you, and systems that bring out the best in you.
5. Acceleration
We all face moments of truth or hit walls when it feels like thereâs nothing left to give.
Approach these moments not as obstacles, but as opportunities. Because when most people hit a wall, they turn around and give up. But it is only after these walls where the real growth happens.
What feels like a dead end is often a new beginning.
This is where going a little extra will result in massive results.
Remember the reason why you are doing this, and go for the win.
Rise to more occasions, go a little further, push yourself a little harder, last a little longer, prepare a little better, and deliver a little bit more.
Closing
I remember when I first bought this book from a local bookshop. I had actually left it on my shelf for a long while without opening it.
After all, I had no idea of the compound effect, and I thought âwell, whatâs the harm in leaving it on the bookshelf for a few days? I will read it eventuallyâŠâ
Well, that few days turned into a few months before I decided to actually pick it up and read it.
After reading the first few pages of the book, it felt like the author was throwing a jab directly at my kidney. He was calling me out. I had been compounding the wrong way. I was putting things off, and moving completely in the wrong direction.
What I realised is that my actions of putting things on holdâno matter whether it was in my personal life or in businessâwere working against the compound effect.
Taking no action is still an action. And, like Larry, I too remained in the same place.
Final Thoughts
So, whether you want to kick a bad habit, be in better shape, improve your relationships, or even if you think things are fine just as they are, like I did, I highly recommend this book.
The compound effect is everywhere, and itâs working whether we can see it or not.
And much like the story of the Tortoise and the Hare, success works in the same way.
A small step will mark the beginning of a great journey, but keep at it, and the journey will be great. The results will be even better.
And by doing exactly what the Tortoise did, you too can win at the game of life, by taking one small, positive step at a time.
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