The Compound Effect – The Book that Changed My Life

Have you ever read a book that changed your life forever?

Had you asked me that a few years back, I would have answered with a resounding “no!”

Not too long ago, I didn’t care much for reading. Sure, I enjoyed Harry Potter when I was a teenager, and I have a small collection of Star Wars books in a closet, but I wouldn’t say that I enjoyed reading as a whole.

But everything changed when my mentor and close, personal friend, DC, gave me my first ever personal development book: The Compound Effect by Darren Hardy.

It may sound silly, but I can honestly tell you that the concepts in this book changed my life, and I believe they can change yours as well.

I Wasn’t Always a Personal Development Fanatic

If you’ve been following Daily New Year’s for a while, you’ve probably realized that I’m kind of a personal development, self-help fanatic, but I wasn’t always this way.

I use “Self-Help” tongue in cheek because so many people jokingly refer to personal development books as self-help books and I hate to admit it, but I used to do the same thing.

I didn’t understand what all the hype was about, and like most people who don’t understand something, I made all the wrong assumptions.

I thought personal development was all about positive self-talk and self-affirmation, and there’s nothing wrong with those things, but with the help of a mentor, I discovered that personal development is about so much more than that.

A Covert Mentor Changed My Mindset

When my mentor first took an interest in me he would tell me about all of these books he was reading, podcasts he was listening to, and YouTube videos he was watching. He was always talking about John Maxwell, Jim Rohn, Darren Hardy, Brian Tracy, Michael Hyatt, Tim Ferris, and on and on.

I didn’t know any of them, but he talked as if I should be on a first name basis with all of them.

He was always excited to share the content with me, and slowly he piqued my interest. Little by little, he introduced new topics to me. I didn’t even know it at the time, but DC had begun mentoring me without me even knowing it.

Over time he continued to draw me into the world of personal development. I enjoyed hearing about DC’s latest insights and readings, but I still hadn’t taken the initiative to start discovering anything on my own.

But one day he came to the office with a gift for me. When he handed me my copy of The Compound Effect, he explained that the book was a short, easy read and would have a massive impact on my life, and because he had been building a fire beneath me, I was eager to read it.

The Compound Effect: My First Ever “Self-Help” Book

If you haven’t read the book, The Compound Effect is more than a catchy book title or self-help principle – it’s a life-changing concept that you can use in nearly every aspect of your life. And like most brilliant concepts, it’s pretty simple.

The author, Darren Hardy, teaches that success isn’t easy and that there are no shortcuts to achieving success in your life. Instead, you’ll find success in the little things you do every day.

Let me share some of Darren’s examples:

You can’t lose 30 pounds in a week, but you can count your calories and exercise 3-5 times per week to lose 30 pounds over time.

You can’t make $1 million in two hours on the internet, but you can work hard daily to build an online business that generates $1 million over time.

Makes sense, right?

I think deep down, we all know this to be true, yet we tend to seek out the magic pills, secret shortcuts, and life hacks to achieve the success we’re looking for, but in most cases, they don’t exist.

The Compound Effect works exactly like compound interest, where time is the critical element.

The Magic Penny

Have you ever heard of the Magic Penny? Until I read this book, I hadn’t. Essentially, it’s a hypothetical scenario to help demonstrate the power of compounding interest.

If you had the choice of taking $3 million today or 1 penny that doubled in value every day for 31 days, which one would you choose? Most people would collect the $3 million, but I’m guessing you picked up on where I’m going with this and knew to pick the magic penny.

As you’ll see, while the penny grows slowly, it ends up growing to be far more than $3 million:

As you can see, for the first ten days, all you have to show for your magic penny is $5.12.

After 20 days, you’re still only up to $5,242.80. It’s not until day 29 that you’re nearing the original $3 million you could have collected, but on day 31 you would collect almost $11 million.

Thanks! I’ll take the penny!

This concept is an exaggerated example of compound interest, and it’s the baseline of the book The Compound Effect.

The reason that this book had such a significant impact on my life is that it taught me several pillars of success: Choice, Habit, and Momentum.

Success doesn’t come from one big move – it comes from thousands of choices, that evolve into habits and allow us to build massive momentum.

Choices

The first thing I learned from this book is the power that choice has in our lives. Every day, we encounter thousands of choices, some with the ability to improve our lives, some with the ability to make our lives worse.

Here’s the bottom line:

Everything about your life today is a direct result of every decision you’ve ever made.

Sure, sometimes bad things happen that are beyond our control, but how we react to those situations is a choice. Make the wrong choice, and you make the situation worse. And if you refuse to make a choice, you’re still choosing to do nothing – you’re choosing to accept whatever life throws at you, good or bad.

Sometimes, it’s easier not to make a choice. Unfortunately, the easy choices are often the wrong choices – they’re the ones that tend to make our lives a little wore.

Remember that magic penny?

That penny may be small, but for better or worse, little things in life tend to add up.

• A few extra dollars saved here and there add up to a retirement fund you wouldn’t have had otherwise.
• A few extra calories day after day add up to those extra pounds we all want to lose.
• A few extra hours of side hustling each week add up to a dream job.

So, as you move through your life, day after day, make sure to pay attention to the decisions you’re making, because those choices tend to cultivate our habits.

Habits

I’ve written about habits before, and it was The Compound Effect that opened my eyes to the impact that our habits have on our lives.

You see, some habits are obvious. Smoking is a habit. Eating something sweet after every meal is a habit. Grabbing fast food every day is a habit.

But some habits are less obvious, such as caving into distractions instead of completing our most meaningful work, procrastinating, or even talking ourselves out of something entirely.

A habit is “an acquired mode of behavior that has become nearly or completely involuntary.” In other words, we often don’t even realize when we’re performing the habitual behavior, and we form most habits through the unconscious choices we make daily.

If something gets tough and you quit once, you might quit the next time something gets tough. Over time, quitting becomes your natural response to anything that becomes difficult – a bad habit.

The Compound Effect helped me to start looking for my bad habits which is critical because the earlier you catch them, the easier they are to fix. And it helped me to actively start building positive new habits that build towards my end goals. Good habits help us build momentum!

Momentum a.k.a. “Big Mo”

Are you starting to see how the concept of the Compound Effect builds over time?

Choices create habits and habits lead to momentum. If you’re consistently building bad habits, you’re building momentum to an undesirable end.

What if you bought a stock that dropped 1% every day? It’s not much, but over time you would lose all of your money. Makes sense!

On the other hand, if you bought a stock that increased by 1% every day, you would eventually have a large sum of money to retire on.

Bad habits are easy to build because the choices are easier to make. Choosing to break a bad habit or develop a new good habit, however, is difficult. No matter what kind of habits you cultivate, you’re building momentum towards something.

But the biggest thing that kills momentum is starting and stopping.

The harder something becomes, the more tempting it is to throw in the towel. Every time you quit on something you want, you inevitably have to restart again, and the amount of energy it takes to restart is enormous!

Think about the amount of fuel it takes to launch a rocket into space versus the amount of fuel it takes to fly in zero gravity.

That is why building momentum is so critical. You don’t want to be a rocket that’s constantly taking off over and over again wasting fuel and wasting precious energy.
Once momentum takes over, it’s so much easier to keep a good thing going, and that makes achieving success so much easier.

The Compound Effect: The Recipe for Success

I talk about this a lot on the blog and the podcast, but the recipe for success, the one I live by and teach, is this:

(Intrinsic Motivation + Action) x Momentum = Success

A strong why, or intrinsic motivation, leads us to make good choices, and when we make good choices, we take positive actions.

Once we take enough positive actions, we build massive momentum – we achieve success.

This is an equation I live my life by and it’s one that I owe to DC and The Compound Effect. I’m always trying to take massive action towards my goals because I know nothing significant in life comes easy.

I think it’s incredible that something so small – one action compounded over time – can have such a significant impact on a life.

If you haven’t already, I highly recommend that you read this book, especially if your someone who is seeking to achieve massive success in your life. The Compound Effect could be the very thing that starts a chain reaction in your life, but you’ll never know if you don’t take action.

And, if you don’t like to read and haven’t signed up for Audible yet, you can sign up today and get 1 free credit. Use that on The Compound Effect and watch your life transform!

Thanks for reading! I genuinely appreciate that you’re here.

Austin