The Compound Effect – by Darren Hardy

“The Compound Effect is the principle of reaping huge rewards from a series of small, smart choices”. It’s not the big things that set us apart, it’s the tiny choices that we make repeatedly and consistently over decades that make radical differences. Darren Hardy steps us through his process of Choices, Habits, Momentum, Influences and Acceleration to help us make small, regular, positive changes to our lives.

“ You will never change your life until you change something you do daily. The secret of your success is found in your daily routine.”

The Compound Effect can be boiled down to our choices. Hardy says that “we all come into this world the same: naked, scared and ignorant. Our life Is an accumulation of the choices we make. They can deliver us to our goals or send us orbiting to a galaxy far, far away”.  

The Compound Effect will show you the importance of habits, influences and the power of momentum to achieve your goals. Choices become behaviours, repeated behaviours become habits, and habits dictate outcomes. 

The Compound Effect Summary

Small Choices

Nobody chooses to be obese. Nobody chooses to go bankrupt. Nobody chooses to have a marriage end in divorce.

These are not the result of a single decision in a single moment of time; they are the results of a series of poor small choices over years or decades. You’re not overweight because you made one bad choice and ate twice your bodyweight worth of ice cream at the all-you-can-eat buffet. Being overweight is due to the small choice you made every night for a decade to eat a scoop of ice cream instead of a piece of fruit.

One dirty burger and a few beers on a Thursday night doesn’t seem like a big deal. And as a once-off it probably doesn’t. But it’s never a once-off… when this is ingrained as weekly a habit, you’ll start stacking on the kilos.

The big things that happen to us (getting fired, getting dumped, getting hospitalised) are never a decision, they are the result of the compounding of all of the small choices you made. You can’t decide the big things, you only get to decide on the small everyday things. Once those small daily choices have compounded to one big event, you no longer have a choice.

The same goes for the good things in life. The pay bump, the chiselled abs, the perfect relationship – these too are the result of small choices that you make every day. You don’t decide the big things, you decide the small things.

The ‘Compound Effect’ is the principle of reaping huge rewards from a series of small, smart choices. In order to make things better, you need to take a series of small (but repeated) steps. You must focus on improving consistently, relentlessly and repeatedly over time.

It means mapping out a path then sticking to it. “If you veer off course by just a few millimetres, over a short period of time you may not notice your trajectory changes”, says Tony Robbins (author of Awaken The Giant Within). “Over the time span of years to decades, a seemingly inconsequential decision may result in a massive miscalculation”.

The ‘compound effect’ can be boiled down to our choices. Our life is an accumulation of the choices we make. They can deliver us to our goals or send us orbiting to a galaxy far, far away. It’s up to you to make the right choices that will lead to the right habits that will put you on the right path to achieving your goals.

No Choices

A man was riding through town on a horse. They were riding with purpose and gusto, flying through the town at top speed. This man looked important, clearly intent on getting somewhere important to do something important. A man in the street yelled out: “You look like you’re in a rush. Where are you going?”. The rider yelled back: “I have no idea… Ask the horse!”

Seems like a pretty stupid horse rider. But you’ve had moments also where you find yourself just going through the motions. You’re running on autopilot without consciously making decisions.

The only thing worse than making a bad choice is making no choice at all. If you don’t choose, then you’ve chosen to be a passive receiver of whatever comes your way. Steering your horse down the wrong path is bad enough, but letting go of the reins and getting dragged around by a dumb horse is much worse. If you’re not intentional about how you live your life, you’re putting the power in someone else’s hands. And they may not have your best interests in mind. If you don’t choose for yourself to do well, someone else will choose for you to do poorly.

Ripple Effect

Making positive choices in one area of your life has a ripple effect that spreads out to other areas of your life. Say, for example, that you want to focus on your personal finances and start reigning in some of the wasted discretionary spending. You start tracking every dollar that you spend so that you can better manage what goes out and see which purchases you can cut. As a result, you become more conscious about your spending and more conscious of the things that you’re buying. Perhaps you see that you bought 3 chocolate bars last week, which you want to switch for three apples instead. The small change of tracking your spending has now led to a small change in your health. This will lead to a small change in your energy levels and happiness, which will lead to a small change in the effort you apply to your work, which will lead to a small change in how your boss values you, which will lead to a small change in the responsibilities you get, which will lead to a small change in your salary… you get the picture – start making one small positive choice and it will ripple out to make you far better overall.

The Complete Formula for Getting Lucking

Luck = Preparation + Attitude + Opportunity + Action

Preparation: Personal growth. Each day you should be doing something to improve yourself, to get better at an important skill, to constantly grow your abilities. In order to get lucky, you need to be prepared to take advantage of anything that comes your way.

Attitude: Beliefs and Mindset. As Henry Ford said: “If you think you can, or you think you can’t – you’re probably right”. If you don’t think you’re the type of person that can get lucky, if you don’t feel like you deserve good things, if you don’t believe in yourself that you can achieve something great, you’re pretty much already doomed. 

Opportunity: good things coming your way.  Richard Branson says that opportunities are like buses – if you miss one, you can be pretty sure that another will come along soon. Opportunity means being the right person (with the right preparation with the right attitude) in the right place at the right time. Everyone is presented with opportunities, but perhaps it’s only the ones we call ‘lucky’ that do anything about it… 

Action: Doing Something. Yes opportunities will come your way, but no that doesn’t guarantee that anything good will come out of it. If anything is to happen, you must act upon opportunities that present themselves. ‘Unlucky’ are probably just those that let opportunities pass them by without seizing them.