The Compound Effect by Darren Hardy

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The Compound Effect by Darren Hardy was first published in 2010. This book has been on my reading list for quite a while and I’ve heard some pretty amazing things about it in the meantime. I got it last year but didn’t manage to read it until the beginning of 2020. With only about 160 pages The Compound Effect is a very short read but don’t let the size fool you. This book is full of great quotes and practical advice! Here are a few of my favorite takeaways…

Main takeaways from the book

“The Compound Effect is the principle of reaping huge rewards from a series of small, smart choices.”

The Compound Effect is not about changing who you are immediately or completely. It’s not about taking huge steps towards your goal within a short amount of time. Instead it’s about finding the small and simple steps you can take today that will eventually lead you to your goal. The good thing about this is that you won’t be overwhelmed, and it won’t take up too much time or mess with your current lifestyle.

“Small, Smart Choices + Consistency + Time = RADICAL DIFFERENCE”

In this equation you have the other two important parts of The Compound Effect come into play. Consistency and Time. Consistency is key, especially if you want the Compound Effect to work properly. You can’t expect to cut down on your calories for 3 days of the week or slack off for a few weeks and get the same results somebody who’s doing it every single day. Time is the most important part of the equation. You need to give yourself time and be patient. It’s very likely that you won’t see a big difference one month into the process, but you’ll see great results after a few years and even greater results the longer you stick with it. As Bill Gates famously said: “Most people overestimate what they can do in one year and underestimate what they can do in ten years.”

“The Compound Effect is always working. You can choose to make it work for you, or you can ignore it and experience the negative effects of this powerful principle.”

Realize that once you’ve read this book and learned about the Compound Effect you have a huge advantage over people who don’t know about it. Of course, they might naturally apply the principles, but we don’t want to leave it to chance, do we?

Always take full responsibility for everything in your life. Things that you did or didn’t do and how you reacted to things that were done to you. By taking full responsibility you put yourself in control and that’s what will eventually help you make things work.

“You cannot manage or improve something until you measure it.”

This advice is so simple, but so true and effective. One example: if you’re into fitness and want to achieve a certain goal you will most likely track calories or macronutrients. Only by tracking this data you will get the right amount or realize if you’re lacking anything. If you don’t track your progress by looking at your weight, taking pictures of your body on a regular basis or measuring your body fat percentage, you will have no idea whether your diet is successful or not! You cannot only improve something until you measure it, but you also cannot say if what you’re doing is a success or not. Not tracking your progress is like leaving things up to chance.

Practical tip: I recently started tracking my reading with an App called Bookly. It allows you to track the number of pages you read in a session, how long you’re reading, and it’ll then calculate your average pages in an hour and your average minutes per page. You even get a projection for how long it will take you to finish the book according to your current reading speed.

I also started keeping a full list of the books I’ve read in 2019 and still update it every week. This helps me to stay on track with my bigger picture goals instead of just for one book.

You should really try tracking your progress in a specific area of your life. You can start easy and track how much water you drink every day or how many steps you take with your smartphone or a fitness tracker. Make sure to keep it easy in the beginning and start with one habit, not five. Think about what you want to improve in your life and figure out how you can track your progress. Get creative and try out different things!

“Is having a coffee once every workday worth the eventual price of a Mercedes-Benz?”

Are you intrigued? Are you wondering what coffee has to do with the price of a car? So was I.

Hardy explains that if you think of drinking a 4$ coffee every day, you’ll spend 1.460$ in one year on coffee. Now that’s a lot of money and it becomes even more drastic when you look at how much you’ll spend over the next 20 years. That would be a total of 29.200$. For coffee!

You might argue that you don’t get a Mercedes-Benz for that sum and you’re probably right. BUT: If you would invest the 4$ you spend on coffee, at 8 percent (assumption by the author) for 20 years, then your 4$ will be almost 19$. Now let’s make the same calculation with a coffee every day for 20 years. According to the author you would end up having 51.833,79$!!! Think about this for a second. Instead of spending 29.200$ you would end up having almost 52.000$. The difference between spending 4$ a day on coffee versus investing these 4$ every day for 20 years is 81.200$. That is the power of the compound effect. It’s a small and simple difference daily but it’s impact over time grows exponentially.

Action-Steps

As I said, these were just a few of my takeaways. The book contains a lot more great stuff and one thing I really liked was that at the end of each chapter you could find a “Summary Action Steps”.

Here are 5 Action Steps I’d recommend you take after reading the book:

1. Pick one habit that’s important for your progress and track it.
2. List a couple of small and simple steps you can take every day to improve your life!
3. Think of small things that are hurting you in your life and eliminate them.
4. Listen to something inspirational or educational in the morning instead of the news or music.
5. Download The Compound Effect Resources for free and fill in the worksheets!