Book Summary: The Compound Effect by Darren Hardy

Table of Contents

The Book in Three Sentences

In this summary of The Compound Effect, you’ll learn that to succeed, you must develop good habits and be consistent with them. Over time, the compound effect will work in your favor and you’ll start seeing extraordinary results. Without the compound effect (doing the right thing repeatedly), success is impossible.

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The Compound Effect Summary

Introduction

The book is about success and what you must do to achieve it. Earning success is difficult, time-consuming, tedious, and boring which is why most people aren’t successful. Success requires a principle called the Compound Effect.

Chapter 1: The Compound Effect in Action

To win at anything, you must develop positive habits and be consistent in applying them. The Compound Effect is about reaping big rewards from small, but smart choices. A bad choice, regardless of how inconsequential it might seem, can send you on a downward spiral of negativity.

The Compound Effect is a powerful force that starts invisible, but by the time it becomes visible, the results are extraordinary. This force affects all areas of life, including personal finance, health, relationships, and business. To an outsider, the Compound Effect looks like an overnight success. In reality, this is the result of making, small, smart choices over time.

Similarly, negative habits can ruin your life if you let them. Whenever possible, you must examine the poor choices you make repeatedly and replace them with good habits. With enough time and consistency, you can do anything you want.

Chapter 2: Choices

We come into the world the same, but our lives end as the accumulation of all of the choices we make. Choices can be good or bad. These choices start as simple decisions but eventually become habits. Every decision you make alters the trajectory of your life. Don’t sleepwalk through your choices and be aware that you’re making them in the first place.

The Compound Effect is challenging in the sense that before you see the results, you need to work consistently and efficiently for some time. If there’s such a thing as a secret to success, it’s a combination of hard, work, discipline, and good luck.

When something bad happens, that act is the result of a series of poor choices. Pay close attention to the choices you make frequently because they can have serious effects. Frequent choices can derail your success, especially when they seem inoffensive. Never make choices without thinking.

Also, you must take one hundred percent responsibility for everything you experience in life. In other words, assume everything is your fault. Don’t blame others for what you’re experiencing: you can choose what to do, you can choose what not to do, and you choose how to respond to what’s done to you. There’s no relationship between luck and success because we all forge our paths. With this in mind, the author introduces the formula for getting lucky.

The (Complete) Formula for Getting Lucky: Preparation (personal growth) + Attitude (belief/mindset) + Opportunity (a good thing coming your way) + Action (doing something about it) = Luck

Preparation: how we improve and prepare ourselves (the skills, knowledge, expertise, relationships, and resources we develop)
Attitude: how we perceive what happens around us
Opportunity: these are natural occurrences
Action: what we do

So how do you take control of your life? Pick an area where you want to be successful. Notice where you are and where you want to be. Be aware of the choices that are steering you away from that ideal future by tracking your actions.

Track every decision related to the area you chose. This involves taking responsibility for your situation and avoiding telling yourself excuses as well. Tracking works because it brings awareness to the actions related to the area you want to improve. At first, you want to track one habit for a week and ideally, you’d choose a habit that has control over you. Your tracking has to be organized and constant. Once you’re over, you’ll be aware of your choices and you’ll start making smarter ones. The earlier you start making small changes, the more powerful the Compound Effect will be.

When it comes to the Compound Effect, the most important thing is to start now. The sooner you start, the sooner you’ll reap the rewards. Losing is a habit, but so is winning. Make the right steps so that these small choices become effortless actions and then permanent habits that can take your life in the direction you want to go.

Chapter 3: Habits

Successful people aren’t more intelligent or talented, their habits make them more informed, knowledgeable, competent, and better prepared. We often choose bad habits over good ones because instant gratification makes it difficult for us to be rational. A bad habit, however small, can derail your life and prevent you from achieving your goals. Bad habits activate the Compound Effect, the problem is that you don’t see the negative effects for a long time.

To get rid of bad habits, you have to want something and know why you want it. This gives you a sense of purpose. When the why is powerful enough, you’ll perform any how.

Your passion shouldn’t involve material things, it should go deeper than that. Don’t focus on achievement, focus on fulfillment. Your core values (who you are and what you stand for) will guide you. Defining your values is a powerful exercise because it makes everything easier and more efficient. Under no circumstance should your actions conflict with your values.

The Compound Effect is the underlying force behind everything you do. By having well-defined targets, you have more chances of reaching them. Once you define your goals, you’ll know what to focus on. Writing down your goals is a powerful exercise because it lets you know who you need to become to make it a reality. It’s not about following a series of steps. It’s about becoming the kind of person who attracts the thing you want. In other words, your behavior is the thing that stands between you and your goals.

Five strategies for eliminating bad habits:

Identify your triggers: these are the “who”, the “what”, the “where”, and the “when” behind each behavior
Clean house: get rid of everything that enables your bad habits
Swap it: replace bad habits with good ones
Ease in: take small steps to change bad habits
Jump in: some people find it easier to make dramatic lifestyle changes

You shouldn’t remove every bad thing from your life, but at the same time, you shouldn’t allow habits to be the boss of you. To that effect, you can go on a “vice fast” which means picking one vice (such as chocolate, movies, alcohol, or coffee) and abstaining from it for a month.

Six techniques for installing good habits:

Set yourself up for success: make the process as easy and frictionless as possible.
Think addition, not subtraction: think of what you can have, not what you can’t. For example, reading books (what you can have) can be far more enriching than watching TV (what you can’t have).
Go for a public display of accountability: tell everyone what you’re doing
Find a success buddy: having someone who keeps you accountable helps you cement good habits
Competition and camaraderie: contests and friendly competitions can be healthy
Celebrate: find ways to reward yourself often

Change is hard because you must build a routine of good habits. Ordinary is easy and extraordinary isn’t. When something is hard, that means most people won’t do it. This should be your motivation because you know that it’ll be easier to step ahead of everyone else.

When it comes to breaking old habits and starting new ones, be patient. Most of your old habits started years ago, it’s only natural that it’ll take some time to get rid of them. Don’t give attention to bad habits, just focus on establishing new ones. It’s alright to make mistakes, just be ready to start over when you do.

Chapter 4: Momentum

Newton’s law of inertia states that motionless objects tend to stay motionless. Likewise, objects in motion stay in motion unless an outside force stops their momentum. This would explain why achievers keep achieving more and more. Once you build momentum, it’s easier to keep going. The first step is the hardest. Once you start, progress is slow for a while, and then the new habit kicks in and things compound rapidly. Once you get momentum, you’re hard to stop.

Momentum also works against you, so bad habits can have disastrous consequences. What you want is to stop bad habits and replace them with good ones and you want to do that as soon as possible.

To achieve this:

Make new choices based on your goals and core values
Put those choices to work through positive behaviors
Repeat those healthy actions to establish new habits
Build routines into your daily disciplines
Stay consistent

Without a routine, your life can be chaotic and more difficult than it has to be. A routine is a way to predictably carry out a set behavior. Simply put, a routine of good habits is what separates successful people from unsuccessful people.

Once discipline becomes routine, a rhythm will naturally emerge. You must create boundaries that separate work from family. Being inconsistent, on the other hand, hurts your rhythm. There’s a toll to starting and then stopping. Consistency is the key to maintaining momentum. The secret to achieving most things is a combination of time, energy, and more importantly, consistency. Continue to do things long after others have given up. Soon, you’ll see results and you’ll realize that making progress is easier and easier. This is the Compound Effect in action.

Chapter 5: Influences

Our choices, behaviors, and habits are influenced by external forces. Everyone is affected by three types of influences: input (what enters your mind) associations (the people you spend time with), and the environment (your surroundings).

Input: controlling the input (what your brain consumes) directly impacts what you create. If you feed on negativity, you’ll become negative. What you expose your mind to, that’s what you’ll think about. Surround yourself with positive, motivational, and supportive ideas. Get rid of bad habits (such as watching TV or using social media), and incorporate some good habits (such as listening to audiobooks or personal development podcasts).
Associations: your “reference group” (the people you associate with) determines your success or failure in life. The influence these people have is subtle and it can be either positive or negative. Spend the majority of your time with the people who have the traits you want. Their behavior will soon become part of you. You can always reappraise and reprioritize the people you spend time with. An essential step you must take involves breaking away from the people who are a bad influence. This is called disassociation. Their fears, guilt, poor choices, and lack of discipline are contagious. Some people you might have to spend some time with even if you don’t want to. Decide how much time you can afford to spend time with them before their dominant attitudes negatively impact you. Never spend three hours with a person you should be spending three minutes with, for instance. This is called limited association. Finally, we have expanded associations that involve spending time with people who have positive traits in the areas you want to improve. Try to find a peak performance partner, a mentor, or someone equally committed to personal growth. You can also try to create your own personal board of advisors, a select group of experts you reach out to regularly to ask for feedback.
Environment: your environment can have a powerful effect on you. In life, you get what you accept (tolerate disrespect and you’ll be disrespected, for example). Life organizes itself around your standards, so protect your emotional, mental, or physical space so that you can relax even if the rest of the world’s falling apart.

Chapter 6: Acceleration

Once you’ve prepared, practiced, studied, and put in the effort, you’ll eventually be presented with your moment of truth. Right then and there, you have to decide who you are. Will you step forward or will you retreat? Don’t forget that your rivals are facing the same difficulties. To get ahead, choose to move forward when the rest takes a rest. This extra effort is what makes a difference. See those moments as opportunities instead of setbacks. When conditions are great, everything’s easy, but when problems come up, that’s when you have a chance to prove you’re worthy.

You’ll eventually hit a wall, you’ll feel tired and you’ll want to quit. Deciding to keep working separates you from others and your former self. There’s always room for improvement, so think about the steps you can take to exceed expectations.

Another way to do this is by doing the unexpected. Whatever you do, don’t consume “popular” things, don’t be average, and don’t be ordinary. Be extraordinary by going in the opposite direction. The “wow” factor will make a lasting impact. Usually, going the extra mile doesn’t require energy or money, just creativity.

Conclusion

Learning without execution doesn’t mean anything. The compound effect can change your life if you let it. You just need to combine it with consistent, positive action. Success isn’t easy and won’t happen overnight, but when it does, it’s an unstoppable force.