The compound effect

What does it take to be really successful?

Darren Hardy puts it straightforward: earning success is hard. There’s no secret formula. The small daily choices shape your life in the long run. The tiny decisions that you take right now will either help you or destroy you.

Success is not about knowledge, forget intellectual masturbation. There are already a large number of books talking about success.

Actually, you don’t need more information; all you need is a plan of action.

Knowledge alone won’t bring you anywhere. As the saying goes: “It’s not what you know but what you do with what you know”

This book is about action, not only knowledge. It helps you create new behaviors and implement new habits.

Chapter 1: The cumulative effect in action

“Slow and steady wins the race” In the story of the tortoise and the hare, we learn the power of consistency. You don’t have to be the fastest, or the smartest to win the race, overall, it takes you consistency, the right habits and time.

The compound effect encapsulates discipline, hard work and perseverance.

Overtime, you’ll experience the huge payoff of the compound effect as long as you keep the right habits and behaviors.

Darren Hardy was raised with a military-like schedule. His Dad, a former football coach, would wake him up every day at 6:00 am in the morning. His Dad’s lifestyle would force him to adopt insane work ethics and crazy routines.

Seeing his father emulating discipline every day inspired Darren to achieve success. As he said, his Dad hardwired him for success, instilled in him the “no pain no gain” and the “no excuses” philosophy.

 

The compound effect

 

The payoff of the compound effect

We tend to dismiss the power of small actions. Doing them in the moment seems of no use. But these same small actions, compounded over time will create radical difference:

Small, Smart Choices + Consistency + Time = RADICAL DIFFERENCE

The magic Penny

Here’s a simple illustration of the power of the compound effect.

Be honest, would you take 3 million $ in cash right now or a single penny that doubles every day for 31 days? Wrong answer if you chose the first. Realizing the power of the compound effect, you would choose the second option. Here’s why.

At the beginning, it’s not obvious. On day five, compared to the $3 million, you’ll have sixteen cents. And on day ten, only 5.12 $; on day 20, with only 11 days left, you’ll have 5243 $. It’s only at day twenty-nine that you’ve got 3 million $. But here’s the magic, on day thirty, you’ll have 5.3 million $ and on the last day, you’ll reap 10, 7 million $ thanks to the magic penny!

To the author, “the most challenging aspect of the Compound Effect is that we have to keep working away for a while, consistently and efficiently, before we can begin to see the payoff”.

We’re so used to instant gratification and immediate results, which Darren Hardy calls “microwave mentality”.

 

the compound effect by Darren Hardy

 

Just like any law in the Universe, the compound effect is always working. We can choose to make it work for us or ignore it and undergo the negative future effects.

You have the power to decide right now on creating new habits and make positive changes.

 

Chapter 2: choices

At the end of the day, everything boils down to the choices we made. We all are equals at birth but our choices, our habits and our actions have been determining who we are and who we will become.

Most of us are not even aware of this fundamental truth, as if we’re sleepwalking through life. Oftentimes, we’re victims of our daily routines. We get stuck in our programming and our social conditioning.

Without awareness, the small choices we take every day can lead to disaster. Elephants don’t bite, mosquitos do. The seemingly insignificant habits, repeated over time derail our success. “Nobody intends to become obese, go through bankruptcy, or get a divorce, but often (if not always) those consequences are the result of a series of small, poor choices.”

The key is to stop blaming and take full responsibility for your life. Realize that you are behind the wheel. You are both the painting and the painter of your life, simply because you can make conscious choices. Accepting 100% responsibility for their lives is the hallmark of all successful people.

To the author, we’re all lucky. What really differentiate us from each other are the choices we made.

The (Complete) Formula for Getting Lucky:

Preparation (personal growth) +

Attitude (belief/mindset) +

Opportunity (a good thing coming your way) +

Action (doing something about it)

= Luck

Your secret weapon – your scorecard

If you really want to change, the first step to take is to raise your awareness. Pick an area where you most want to be successful. Visualize where you want to be: this includes making choices.

As you make choices about where you want to go, track every action that leads you to your destination.

Hold yourself accountable and get back on track if you were side-tracked.

Practice a habit consistently for three weeks. Psychologists say that a habit is formed once you practice it for three weeks. Once the habit kicks in, it will become automatic and it will call for less willpower.

Consult my other article: Atomic Habits by James Clear where he talks about forming a habit

The earlier you create a habit, the more powerfully the compound effect works in your favor. Just as with the “magic penny”. The magic penny doubled every day and you’ll have over 10 million $ on day 31. The benefits would’ve been less significant if you were given only 10 days or 20 days. The more time you have the better. The key is to start RIGHT NOW!

Chapter 3: habits

Think about a young sapling, you can easily pull it with your finger. But the more that sapling becomes a fully-grown tree and the harder it will be for you to pull it up. That’s the power of habits. The older your habits, the more it governs your life and the harder it is to get rid of.

Creatures of habit

“There’s a story about a man riding a horse, galloping quickly. It appears that he’s going somewhere very important. A man standing along the roadside shouts, “Where are you going?” The rider replies, “I don’t know. Ask the horse!” This is the story of most people’s lives; they’re riding the horse of their habits, with no idea where they’re headed. It’s time to take control of the reins, and move your life in the direction of where you really want to go.”

I love this story and it highlights how much we fall into what Tony Robbins calls “Niagara falls syndrome”. Most people feel that they don’t have any control over their lives. We are creatures of our habits and most people don’t even realize it.

Psychological studies reveal that most of what we do, what we feel and what we think are a result of a learned habit (95% to be precise).

To make the difference between a good habit and a bad one, just ask yourself: “Does this habit help me get closer to my goals?”

Successful people implemented positive habits in their daily routines. If you want to get fit and you are exercising every day, it’s indeed a good habit. If you fall for that hyper-caloric hamburger and do it often, that’s a bad habit.

“A daily routine built on good habits is the difference that separates the most successful amongst us from everyone else.”

Start by thinking your way out of the instant gratification trap

We all want to get immediate results, it’s a human tendency. This behavior is so hardwired in our brain that instant gratification turns us into the “most reactive, non thinking animal”

We don’t always measure the long term effect of our choices. We keep eating junk foods because the negative effects are postponed in the future. You wouldn’t eat that greasy Big Mac if the first bite immediately causes a heart attack would you? But we keep our bad eating habits until it’s too late.

The secret to change here is to take super small, seemingly unimportant adjustments that will change everything.

In addition to the magic penny, Darren Hardy gives the example of the 1% adjustment. If a plane’s initial destination is New York City, a small 1 percent change will land the plane 150 miles off course, arriving either in Albany or in Dover, Delaware.

Take now a simple habit, good or bad. It will yield either major breakthroughs or terrible results in the future.

It’s time to figure out what you really want and how to get there then take those small adjustments.

 

The compound effect

From the book “The compound Effect’

 

Your why power

To get what we want, we need to change our habits, reinforce the positive and get rid of the negative.

To break free of the bad habits, we need more than simple willpower. Using your why power is a more effective strategy. It connects your choices with where you want to go.

Discover now the reasons that will motivate you when things get tough. Your “why power” will spark that passion and fuel your persistence over time.

If we said at the beginning that earning success is hard, the power of your why is “what gets you to stick through the grueling, mundane and laborious”.

Find your fight

We are either motivated by something we want or something we don’t want. What motivates you can be love or hate. These two can be powerful stimuli so identify which one motivates you the most. What motivates you can be linked with your fundamental values. If you value risk and financial freedom, you will hate the idea of a stable job and a fixed income.

My note: beware of where you put your focus on, if you hate poverty, the image of poverty will dominate your thoughts and you will attract it even more.

Goals

Our lack of motivation often results from a lack of clarity. We need to clearly define where we want to go. As we know the destination, we harness the power of the compound effect. Magic happens when we organize and focus on a clearly defined goal.

The most successful people mapped out their visions and they took massive actions to make it a reality.

Your “why” matters more than the “how”, discover what motivates you, set clear goals and organize a plan by which to concretize that vision.

Who you have to become

“If you want to have more, you have to become more. Success is not something you pursue. What you pursue will elude you; it can be like trying to chase butterflies. Success is something you attract by the person you become.” Jim Rohn

What type of person should you become to achieve the goals you set? It’s not about what you need to do but who you need to become.

If needed, change your identity because with a new identity can you stick to new habits. Who you think you are shouldn’t contradict with what you consistently do.

Behave yourself

What separates you from your goals is your behavior. Identify the attitudes that uplift you and the ones that you need to stop doing.

Your life comes down to this formula:

YOU —> CHOICE (decision) + BEHAVIOR (action) + HABIT (repeated action) + COMPOUNDED (time) = GOALS

 

Chapter 4: Momentum

There’s one powerful force of success that the author calls “Big Mo”. Most superachievers gained momentum and they all achieved stratospheric success.

The law of inertia states that “objects at rest tend to stay at rest unless acted on by an outside force. Objects in motion tend to stay in motion, unless something stops their momentum. Put another way, couch potatoes tend to stay couch potatoes. Achievers—people who get into a successful rhythm— continue busting their butts and end up achieving more and more.”

Building momentum takes time and it’s often difficult at the beginning. It’s always the first step that’s the hardest. But once you get the momentum, the newly formed behavior helps you and the results compound rapidly.

First you make your habits and then your habits make you, that’s momentum.

It’s the same when a rocket ship launches. “The space shuttle uses more fuel during the first few minutes of its flight than it does the rest of the entire trip. Why? Because it has to break free from the pull of gravity. Once it does, it can glide in orbit.” The hard part was getting off the ground. The hard part for you is to create positive habits.

This is why successful people tend to become more successful and rich become even richer.

At the same time, poor people become even poorer because momentum either works for you or against you.

To build momentum or to get Big Mo pay you a visit as the author says, you must:

1) Make new choices based on your goals and core values

2) Put those choices to work through new positive behaviors

3) Repeat those healthy actions long enough to establish new habits

4) Build routines and rhythms into your daily disciplines

5) Stay consistent over a long enough period of time

Routine power

In a previous article, we already talked about how systems are far more effective than goal-settings. Competitors have the same goal but what separates them is how they get there. If people fail, it’s because they don’t have a system of execution.

You must emulate your goals in your behavior and attitudes and you have to include them in your daily routines. Routines as the very term implies are repeated every day without fail. “A daily routine built on good habits and disciplines separates the most successful among us from everyone else. A routine is exceptionally powerful.”

To feel in control of our lives, the author recommends having routines in the morning and at bedtime: when your day starts and when it ends.

Rise & shine

Darren Hardy then shares his morning routines:

–        Wake up at 05:00 am (sometimes at 05:30 am he confesses)

–        Think about all the things he’s grateful for

–        Send love to someone

–        Think about his Number 1 goal

–        Decide on 3 things to get closer to that goal

–        Prepare coffee

–        10-minute series of stretches

–        Read something positive and instructional

In the book “Miracle morning” Hal Elrod explains how important the first hour of the day is. When you control the first hour of the day, you’re sure to win the day. The first hour sets the tone and frames how you’re going to live the next 24h hours. It’s one of the keys on how to be productive.

Registering your rhythm

The author shares a powerful tip to stay consistent with your new behavior. Register your weekly progress. Every single day, tick off a case when you perform the action. The key here is to stay consistent and catch your momentum.

pump well analogy

The pump well analogy

I found this analogy worth-mentioning. Imagine that you’re using a hand-pumped water well. You need to slowly but regularly pump the well’s lever to get the water to the surface. It actually takes some time before you get water.

Likewise, when people start a new project (go to the gym for example), they tend to hastily pump the lever (go to the gym every day) until they’re exhausted. When they don’t see any results, they just give up. It’s only when we pump regularly that we’ll get water.

“And here’s where the magic happens: If you continue to pump, it doesn’t take long before you’ll get a full and steady stream of water. You have your success! Now that the water is flowing, you no longer need to pump the lever as hard or as quickly. It becomes easy, actually. All you have to do to keep the pressure steady is to just pump the lever consistently. That’s the Compound Effect.”

Chapter 5: Influences

We said at the beginning that you must take responsibility for your life. Your choices, behaviors and habits shape your future. We mentioned the following formula:

YOU —> CHOICE (decision) + BEHAVIOR (action) + HABIT (repeated action) + COMPOUNDED (time) = GOALS

The variables in this formula such as your habits, choices and behaviors are influenced by external forces. Create an environment where these external forces help and support you.

Darren Hardy mentions three kinds of influences:

–        Input (what you feed your mind)

–        Associations (the people with whom you spend time)

–        Environment (surroundings)

Input

Stand guard at the door of your mind because what you consume will affect you in some way. Cut off the news because it’s nothing but negativity. Put yourself on a media diet. Darren Hardy puts it bluntly “I don’t watch or listen to any news and I don’t read any newspapers or news magazines. Ninety-nine percent of all news has no bearing on my personal life or my personal goals, dreams, and ambitions anyway.”

Finally, you can also listen to instructional content. As Brian Tracy said, turn your car into a mobile classroom.

Associations: who’s influencing you?

If you hang out with 4 broke people, you will be the fifth. Jim Rohn said: “We become the combined average of the five people we hang around the most” and these people are called “reference groups”. The reference group determines as much as 95 percent of your success or failure in life. You should decide to associate, dissociate or have limited association with people depending if they help or distract you.

Environment: changing your view changes your perspective

“Be sure your environment is welcoming and supportive of your becoming, doing, and performing at world-class levels” Darren Hardy

Clear the clutter in your life by changing whatever surrounds you. Create an environment that supports you and your goals. You can raise your standards and change to a new environment if necessary. Remember that “we get in life what we accept and expect what we are worthy of”.

 

Chapter 6: Acceleration

We’ll have to surmount multiple obstacles during our journey, it never ends. During hard times, we realize that our worst enemies are often ourselves. Darren Hardy uses the expression “hit the wall” to describe such moments. It’s in then that we discover our real strengths. It’s up to us to take it as an opportunity or an ordeal.

Challenges can help you become the best version of yourself. If it was easy, everybody will do it.

Successful people get hit but they persevere and do it anyway.

“When you hit the wall in your disciplines, routines, rhythms, and consistency, realize that’s when you are separating yourself from your old self, scaling that wall, and finding your new powerful, triumphant, and victorious self”

In life, even if you hit the wall, always do more than you can. It can be as easy as doing more than the last reps during an exercise. Deliver more than expected and do more.

Conclusion

Success doesn’t happen overnight and Rome wasn’t built in one day.

If there’s one thing that I will always remember from the compound effect, it’s this passage: “New or more information is not what you need—a new plan of action is. It’s time to create new “behaviors and habits that are oriented away from sabotage and toward success. It’s that simple”

This book was short and very easy to read. I especially liked the powerful analogies he shared (“Ask the horse”, “young sapling”, “Pump lever” just to cite a few).

 


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