The Compound Effect: Jumpstart Your Income, Your Life, Your Success
Darren Hardy
Description
No gimmicks. No hyperbole. No magic bullet. The compound effect on the principle that decisions shape your destiny. Little, everyday decisions will take you either to the life you desire or to disaster by default. The compound effect is a distillation of the fundamental principles that have guided the most phenomenal achievements in business, relationships and beyond.
Key words: Success
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My Notes
Nothing works like the power of the COMPOUND EFFECT of simple actions done right over time.
If you want more love, give more love. If you want greater success, help others achieve more.
Your decisions shape your destiny.
It’s the little decisions that shape our lives.
Introduction
If all we needed was more information, we’d all be millionaires with perfect abs.
New or more information is not what you need - a new plan of actions is. It’s time to create new behaviours and habits that are orientated away from sabotage and toward success. It’s that simple.
Chapter 1: The compound effect in action
I’m the world’s biggest believer in consistency.
It doesn’t matter how smart you are or aren’t, you need to make up in hard work what you lack in experience, skill, intelligence or innate ability. If your competitor is smarter, more talented, or experienced, you will just need to work three or four times as hard.
It’s no great achievement to go along with the crowd. Be the unusual guy, be the extraordinary guy.
The compound effect is the principle of reaping huge rewards from a series of small, smart choices.
Small, smart choices + Consistency + Time = Radical difference.
The Magic Penny
If you had the choice between taking $3,000,000 in cold hard cash right now, or a single penny that doubles in value every single day for 31 days, which would you choose?
If you’ve heard this story before, you already know that choosing the penny option is the better choice and will lead to greater wealth. But why is it so hard to believe that choosing the penny will result in more wealth over time? The answer is simply because it takes so much longer to see the payoff. Most of us can’t stand delaying our gratification. This is why in general, the savings rate in the United States is very low compared to other countries, and credit card debt keeps millions of families from achieving financial freedom.
Let’s look at the math behind the story a little closer:
Assume YOU choose the $3 million in cash in hand right now, and your best friend chooses the penny gamble.
On day #5, your friend has just 16 cents. You of course have $3 million!
On day #10, your friend has $5.12 cents, while you are enjoying your riches.
After 20 days your friend has $5,243, while you are treating your friends and family to dinner.
At this point, how is your friend feeling? He or she has delayed his or her gratification in hopes of making a smart, long-term decision as they are watching you live large with your mounds of cash. But…the invisible magic of ’compounding’ is about to take effect.
By day #31, your friend’s single penny has multiplied (or compounded) into $10,737,418.24!
This is more than three times your original $3 million!
This simple, yet compelling, story shows why consistency over time is more important. On day #29, your friend has about $2.7 million, still a bit behind your $3 million, but by day #30 your friend pulls ahead with roughly $5.4 million, beginning to leave you behind.
If we want to succeed, we need to recover our grandparent’s work ethic.
Your only path to success is through a continuum of mundane, unsexy, unexciting, and sometimes difficult daily disciplines compounded over time.
Daily Choices, Behaviours, Habits = Results.
Chapter 2: Choices
Each choice starts a behaviour that over time becomes a habit.
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.
Making good daily choices, habits and behaviours means I will show up differently in my marriage, and make my wife respond differently to me.
If I always took 100 per cent responsibility for everything I experienced – completely owning all my choices and all the ways I responded to whatever happened to me – I held the power. Everything was up to me. I was responsible for everything I did, didn’t do, or how I responded to what was done to me.
You alone are responsible for what you do, don’t do or how you respond to what’s done to you.
The Lucky formula: Preparation (personal growth) + Attitude (mindset/belief) + Opportunity (a good thing coming your way) + Action (doing something about it) = Luck.
You cannot see what you don’t look for, and you cannot look for what you don’t believe in.
The biggest difference between successful people and unsuccessful people is that the successful people are willing to do what unsuccessful people are not.
Chapter 3: Habits
‘We are what we repeatedly do’.
A habit is an acquired mode of behaviour that has become nearly or completely voluntary.
Psychological studies reveal that 95 per cent of everything we feel, think, do, and achieve is a result of a learned habit.
It’s about becoming a creature of champion habits.
Even though we developed most of our habits unconsciously (by modelling our parents, responding to environmental or cultural associations or creating coping mechanisms), we can consciously decide to change them.
So why are we so irrationally enslaved by so many bad habits? It’s because our need for immediate gratification can turn us into the most reactive, non-thinking animals around.
Super small, seemingly inconsequential adjustments can and will revolutionise everything.
People are either motivated by something they want, or something they don’t want.
Goal setting – the secret revealed - When you ‘think’ something, it appears that you are miraculously drawing it into your life. In reality you’re now just seeing what was already there.
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.
You – Choice (Decision) + Behaviour (action) + Habit (Repeated action) + Compound (Time) = Goals
If there is a discrepancy between what you say and what you do, I’m going to believe what you do every time.
You will never change your life until you change something you do daily. The secret of your success is found in your daily routine.
Chapter 4: Momentum
The world looks, acts and responds to you very differently when you start your day with a feeling and orientation of gratitude for which you already have.
Chapter 5: Influences
You must realize your choices, behaviours and habits are influenced by very powerful external forces.
Everyone is affected by three kinds of influences:
Input - what you feed your mind
Associations – the people with whom you spend time with
Environment – your surroundings
Garbage in, garbage out.
We need an extra level of vigilance to prevent our brains from absorbing irrelevant, counterproductive or downright disruptive input.
Media – why do good, decent people want to see something tragic and grotesque? It’s our genetic heritage, going back to our prehistoric sense of self preservation. We can’t help ourselves.
It’s powerful to evaluate and shift your associations into three categories: dissociations, limited associations and expanded associations.
When you make boundaries between you and the people who drag you down, realise that they will fight you. Your decisions to live a more positive goal orientated life will be a mirror to their own poor choices. You will make them uncomfortable and they will attempt to pull you back down to their level. It’s not about you at all. It’s about their fear and their guilt about their own poor choices and lack of discipline.
Never ask advice from someone with whom you wouldn’t want to trade places.
“You will get in life what you accept and expect you are worthy of.”
