The Compound Effect Darren Hardy Summary
Most of us probably know a person that wakes up every day and says: “today is the day that I am going to lose that extra weight.” And we all know what happens after that. The problem is not our goals or our attitude, the problem is our approach. Why do we think we can just wake up and change everything? That's not possible. Instead, in the compound effect, Daren Hardy talks about how small changes made over time can result in massive wins. A penny doubled every day in just 31 days becomes more than 10 million dollars. That's unbelievable, right? If you apply the same principle of compound effect in any area of your life, you can achieve extraordinary results. The key is to continue with the habit so that benefits compound over time. Daren Hardy is the editor of Success magazine, and he likely knows more about success than most people on this planet. He has put some of his best learnings into this amazing book. In this video, I'll share with you four key lessons that I learned from reading it.
Key Lesson #1: The power of compounding: how small daily changes bring big wins
“It's not the big things that add up in the end, it's the hundreds of thousands or millions of little things that separate the ordinary from the extraordinary.” What's the difference between an Olympic athlete and you? It's likely a few thousand intensive workouts where they put in extraordinary effort. What is the difference between a self-made millionaire and someone who is struggling financially? It's likely a whole string of choices over time to work harder and smarter each and every day. The compound effect captures the powerful idea that when you repeat certain actions and habits over time, the resulting impact is huge. Let's look at an example about watching the news. Hardy shares a story of an executive who worked with. Hey, what harm is there to watch a little bit of news here and then. But when this executive added the time reading newspapers in the morning, listening to the news in the car, checking the news on his laptop, and watching a little bit of news at the night, it turned out he was spending three hours a day with the news. And this is just one day. Imagine if you took this time and compounded it over his lifetime, how much of it would be spent consuming news? Small positive habits over time can compound into extraordinary wins and small bad habits over time can compound into huge problems. Grab that bag of cookies often enough and you may be well on your way to a lifetime of obesity. Spend whole your paycheck or more every month, and you could be creating a mountain of debt that you'll be facing for years.
Key lesson #2: Tracking yourself: all winners are trackers
“Why do Olympic trainers get paid so much because they track every workout, every calorie, and every micronutrition for their athletes. All winners are trackers.” Do you have an important goal right now that you are struggling to achieve? Maybe that extra 10 pounds that you want to get rid of? Or maybe you really want to start investing, but somehow you just never seem to have any money left at the end of the month. You are not quite sure where the money goes. But well it sure does seem to go. Hardly encourages us to build awareness in order to move towards change. And how do we build that awareness? You guessed it, by tracking. Hardy says: “to help you become aware of your choices, I want you to track every action that relates to the area that you want to improve. if you've decided that you want to get out of debt, you're going to track every penny you spent. If you've decided you want to lose weight, you are going to track everything you put into your mouth. And yes, it can be hard to track everything, every dollar, every calorie. But let's consider the alternative. You can keep cursing that extra 10 pounds or keep delaying your investment goals or whatever other goals you have. Do you want to have the exact same goals next year that you had this year? Probably not. Then trust this important advice of tracking everything related to that goal, and yes everything. When you do this, it's going to be hard NOT to achieve your goals.
Key Lesson #3: The ripple effect: one habit leads to another
The reality is that even one small change can have a significant impact that causes unexpected and unintended ripple effects. Have you ever eaten a big piece of pizza topped with loads of cheese and then decided, what the heck, you might as well have the brownie for dessert too. You've already blown it, so why not keep going? Right. And the next day, you also skip your workout, because now you are really feeling bad about yourself after eating all that junk food. This is the ripple effect in action. This ripple effect can work against you or for you. Positive habits can and often do lead to other positive habits. When you just had a killer workout, chances are pretty good that you are not going to eat fast food on your way home, you are likely to make healthy food choices instead. Leverage the ripple effect to work for you, not against you.
Key lesson #4: The power of momentum: creating consistent routines
Hardy says that one thing all successful people have in common is that they have good daily routines. Why is consistency so important? Consider the hand pump on the water well. It takes lots of energy to get the water flowing at the start. You have to pump it so hard. But when it does start flowing, water comes quite easily. You don't need to spend much energy anymore. Creating positive habits works exactly the same way. Going for a run first thing in the morning can be really, really hard at first, especially if you haven't been exercising for a while. But once you are consistent and stick to the routine, it becomes so much easier. Just like the hand pump with effortlessly flowing water, your new routines are also going to create an amazing flow of positive results in your life. But be cautious here, this is as long as you keep the routine going. Once you ignore your routine for a while, just like the hand pump that the water flow will stop if you don't keep pumping, you lose the momentum. You have to start pumping from scratch all over again. So stick to your routine and don't let that momentum go away.
So to summarize,
1- small changes compound over time and bring big wins.
2- all winners are good trackers.
3- one positive habit will ripple and lead to other positive habits.
4- daily routines create momentum.
Imagine what would happen if you applied the power of compounding to all areas of your life. All you need to do is to start with small daily changes, create a routine, be consistent, track yourself. If you do all these, it will be so hard not to achieve your goals.
I have prepared a one-page infographic summary of the book, click the link below and I will be happy to send it to you.