The Compound Effect

by Darren Hardy

“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 just need to work three or four times as hard. You can still beat them!”

At eighteen, I was making a six-figure income in my own business. By age twenty, I owned my own home in an upscale neighborhood. By age twenty-four, my income grew to more than $1 million a year, and by age twenty-seven, I was officially a self-made millionaire with a business that brought in more than $50 million in revenue. That just about brings us to the present day, because I’m not yet forty, but I have enough money and assets to last my family the rest of my life.

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

Believing that the other person is wrong rather than looking inside and doing the work necessary to clean up your mess is basic Psychology 101

The most challenging aspect of the Compound Effect is that we have to keep working away for a while, consistently and efficiently, before we can begin to see the payoff.

Attitude: This is where luck evades most people, and where Sir Richard is spot-on with his belief that luck is all around us. It’s simply a matter of seeing situations, conversations, and circumstances as fortuitous. You cannot see what you don’t look for, and you cannot look for what you don’t believe in. Opportunity: It’s possible to make your own luck, but the

luck I’m talking about here isn’t planned for, or it comes faster or differently than expected. In this stage of the formula, luck isn’t forced. It’s a natural occurrence, and it often shows up seemingly of its own accord.

Countless people have more disadvantages and greater obstacles than you, and yet they’re wealthier and more fulfilled.

The first step toward change is awareness. If you want to get from where you are to where you want to be, you have to start by becoming aware of the choices that lead you away from your desired destination. Become very conscious of every choice you make today so you can begin to make smarter choices moving forward.

The biggest difference between successful people and unsuccessful people is that successful people are willing to do what unsuccessful people are not.

Tracking is my go-to transformation model for everything that ails me.

All winners are trackers.

Since your outcomes are all a result of your moment-to-moment choices, you have incredible power to change your life by changing those choices. Step by step, day by day, your choices will shape your actions until they become habits, where practice makes them permanent.

Aristotle wrote, “We are what we repeatedly do.” Merriam-Webster defines habit this way: “An acquired mode of behavior that has become nearly or completely involuntary.”

A daily routine built on good habits is the difference that separates the most successful amongst us from everyone else.

With enough practice and repetition, any behavior, good or bad, becomes automatic over time.

So, what is your why? You’ve got to have a reason if you want to make significant improvements to your life.

But, really, it doesn’t matter what the motivation is (as long as it is legal and moral); you don’t have to be motivated for great humanitarian reasons. What matters is that you feel fully motivated.

It’s within our ability to cause everything to change. Rather than letting past hurtful experiences sap our energy and sabotage our success, we can use them to fuel positive, constructive change.

“Whatever you vividly imagine, ardently desire, sincerely believe, and enthusiastically act upon... must inevitably come to pass!”

You only see, experience, and get what you look for. If you don’t know what to look for, you certainly won’t get it.

When you define your goals, you give your brain something new to look for and focus on.

“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.”

Habits and behaviors never lie. If there’s a discrepancy between what you say and what you do, I’m going to believe what you do every time. If you tell me you want to be healthy, but you’ve got Doritos dust on your fingers, I’m believing the Doritos. If you say self-improvement is a priority, but you spend more time with your Xbox than at the library, I’m believing the Xbox.

John C. Maxwell said, “You will never change your life until you change something you do daily. The secret of your success is found in your daily routine.”

Personally, I’m always happy when something is hard. Why? Because I know that most people won’t do what it takes; therefore, it will be easier for me to step in front of the pack and take the lead.

“The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge.”

Some of our best intentions fail because we don’t have a system of execution.

The greater the challenge, the more rigorous our routines need to be.

wonder why military boot camp is so hard—where relatively minor tasks like making the bed,

A daily routine built on good habits and disciplines separates the most successful among us from everyone else. A routine is exceptionally powerful.

The key to becoming world-class in your endeavors is to build your performance around world-class routines.

Envisioning your success as an unstoppable locomotive may help you stay enthusiastic about getting into your own rhythm.

The Compound Effect—the positive results you want to experience in your life—will be the result of smart choices (and actions) repeated consistently over time.

But you set yourself up for failure by doing too much too soon.

When you start thinking about slacking off on your routines and rhythms, consider the massive cost of inconsistency.

When most people start a new endeavor, they grab the lever and start pumping really hard. Just as Richard was with his plan to get fit, they’re excited and committed… they pump and pump and pump, but after a few minutes (or a few weeks), when they don’t see any water (results), they give up pumping the lever altogether. They don’t realize how long it takes to create the vacuum needed to suck the water into the pipe and eventually out of the spout and into their bucket. Just like the merry-go-round, rocket ship, or steam engine breaking free of inertia, it takes time, massive energy, and consistency to pump water. Most people give up, but wise people continue to pump.

Everyone is affected by three kinds of influences: input (what you feed your mind), associations (the people with whom you spend time), and environment (your surroundings).

Your brain is not designed to make you happy. Your brain has only one agenda in mind: survival.

You get in life what you create. Expectation drives the creative process.

It’s not enough to eliminate negative input. To move in a positive direction, you must flush out the bad and fill up on the good.

My car won’t move without two things: gasoline and an ever-present library of instructional CDs I listen to as I drive.

Brian Tracy taught me the concept of turning my car into a mobile classroom. He explained to me that by listening to instructional CDs as I drive, I gain knowledge equivalent to two semesters of an advanced college degree—every year.

The people with whom you habitually associate are called your “reference group.” According to research by social psychologist Dr. David McClelland of Harvard, your “reference group” determines as much as 95 percent of your success or failure in life.

According to research by social psychologist Dr. David McClelland of Harvard, your “reference group” determines as much as 95 percent of your success or failure in life.

Jim Rohn taught that we become the combined

Eventually, we start to eat what they eat, talk like they talk, read what they read, think like they think, watch what they watch, treat people how they treat them, even dress like they dress. The funny thing is, more often than not, we are completely unaware of the similarities between us and our circle of five.

recommend. The influence your friends have over you is subtle and can be positive or negative; either way, the impact is incredibly powerful. Watch out! You cannot hang out with negative people and expect to live a positive life.

So, what is the combined average income, health, or attitudes of the five people you spend most of your time with? Does the answer frighten you? If so, the best way to increase your potential for whatever traits you desire is to spend the majority of your time with people who already possess those traits.