The Compound Effect: Jumpstart Your Income, Your Life, Your Success, by Darren Hardy
How easy it is to forget this critical idea from today´s book, The Compound Effect: small constructive actions taken consistently towards your goals add up over time and produce big results. Of course, the inverse is also true. Destructive actions can compound as well into long-term negative consequences. But we are in a good mood, so let’s focus on the more positive formulation.
Did you know that – and pick any are of your life, business, income, investing – if in that area in which you want to improve you can get better by just 1/10th of 1% every week day (so you get weekends off) that, doing the math, the compounding result of that would be 0.5% better in a week, 2.0% better in a month, 26% in a year and 1,000% better in ten years? Pretty mind-blowing to learn that drastic improvement does not require herculean effort, but rather just consistency of productive habits. The Compound Effect taught us this math.
Consistency is the Critical Component of Success
Investors, entrepreneurs, business owners, we have all heard the story of someone else reaching their dreams and finding the success we perhaps would like to have because of a big break, one incredible investment or landing one major deal. Most of us know, however, that this “big bang” of success is rare, if not completely overstated.
Rather, what we learn from The Compound Effect is that the combination of time and consistent application of sound fundamentals (to the point that they become habits) is the surest way to get our desired results.
Why is Consistency So Hard?
We all know someone, or have done it ourselves, where we set a goal and then dive into it with incredible intensity. Maybe the example is with respect to diet and exercise. A goal to lose 20 pounds turns into a goal to lose those twenty pounds in twenty days. To that end, people starve themselves or take on three hours of exercise per day, which, in both cases, are not sustainable over any meaningful period of time. So what happens? The results that you worked so hard for show up in your life for a brief period of time for only so long as you can fight off burnout. Once burnout and exhaustion set in, old habits return, the weight comes back on, and it was all for nothing. The cycle usually continues.
Success through consistency instead, as The Compound Effect teaches us, requires implementing a level of sustainable action. Remember, your daily goal is only to get better by one-tenth of 1%. So what does that pattern of sustainable action need to look like? We all know ourselves, and answering this question requires one to have an honest personal conversation and ask the question: “OK, I want to be better at X, what are the things that I know that I have the discipline to achieve on a daily basis, consistently over time, that will get me closer to my goal?” Achievement is a marathon, not a sprint.
Why We Give Up
If you do not have a strong “why” for doing something, then giving up is easy to do at the first sign of resistance. It is having that “why” that pushes us through obstacles and gives us even the chance to see what lies on the other side of struggle. What are your whys as an entrepreneur, business owner or investor? To not have to work for anyone else? To be free to travel and live the life that you want and to do so at a young age? Without a strong why, we wouldn´t bet that you are likely to take the consistent action necessary for success that we have been talking about in this article and that The Compound Effect preaches. Defining your “why” is a threshold issue you have to get your head around.
A book dedicated to finding your why that I want to recommend since we are on this topic: Start With Why: How Great Leaders Inspire Everyone to Take Action, by Simon Sinek. Read our review of that one and get your copy here (but not until after you finish this article).
Some Other Things We Liked About The Compound Effect
Darren Hardy, the author of this book and the successful entrepreneur behind Success magazine and its offshoot of businesses, is clearly a reader of the great books that we also recommend. In The Compound Effect, the author, Darren Hardy, reminds us the important lessons of:
- The power of decision. Be conscious about your decisions. The decisions you make, even the small ones have impact over time.
- The harder you work the luckier you get. Put yourself in a position through improvement and knowledge to take advantage when luck strikes.
- Track what is important. The power of writing things down.
- Habits are the offspring of routine. The things that seem hard now, you will do them almost unconsciously as you turn them into habits.
- What is your education v. entertainment ratio? The bottom 80% of achievers and earners are focused on entertainment. The top 20% of achievers and earners prioritize education. Become part of the top 20% simply by changing where you direct your attention.
- Be the gatekeeper. Stand guard over what enters your mind.
- The power of association. Everyone in your life fits into the 3 – 3 – 3 of association. Are they someone who you can and should spend three minutes with, three hours with, or three days with? Answer this by remembering that we are the average of the people that we spend most of our time with.
- Life gives you what you tolerate. (This is my favorite of all the lessons here. Raise your standards.)
- Real growth happens with what you do after you hit the wall.
- “Do a little bit more than what is expected in all areas of your life. If you can exceed expectations you will accelerate results.”
We hope this article motivated you to read The Compound Effect. You are going to learn something that propels you forward in your investing, your business and just your life in general. Just one-tenth of 1% better everyday. That is all it takes. Support the site and get the book!