You know the whole tortoise vs. the hare story? Darren Hardy claims to be the tortoise. In The Compound Effect, Darren explains how, instead of making big bets and dramatic changes, he turned his goals into daily habits he could follow. In this summary, you will learn the 3 most powerful lessons from the book that made this book so special. Get "The Compound Effect" Here:
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Summary Transcript:
Big Idea 1: Small Smart Choices are Key
The Compound Effect is the principle of reaping huge rewards from a series of small, smart choices. Darren Hardy’s formula is: “Small smart choices + consistency + time = Radical Difference.” I want to give you one of my favorite examples from the book that explains this concept.
Two people are given the choice between either receiving $3m today or a magic penny that doubles in value every single day. Let’s say person A took the $3 million dollars because they want to enjoy spending it as soon as possible while person B opts for the penny. On the second day, person A is still on $3 million minus their spendings while person B is now on 2 cents. Skipping to day 20, person A is still living life with $3 million minus any spendings while person B only has a little over $5,000. On day 31, again person A still has $3 million minus any spending money but now person B’s penny grew to more than $10 million!
Big Idea #2: The Compound Effect Is Always Working
The most important thing about the compound effect is that it’s always working. To demonstrate this, let me tell you about Hardy’s Three Friends Example:
Friend A who makes small good actions, Friend B does nothing and Friend C who makes small bad actions. Let’s say the good actions are reading a book a week and working out regularly, while the bad actions are mindless tv consumption and not working out. In a year’s time, you probably won’t notice much of a difference in the lifestyles of each friend. However, in 3 years time, there will be radical differences.
In this example, Friend A started a small business on the side with all the inspiration and ideas gathered through reading a book a week. Friend B is mildly depressed because he compares himself to his other friends and hasn’t done anything for 3 years. And the worst case is Friend C. Friend C is now stressed out from work and can’t see his genitals unless he bends over.
Big Idea #3: The Power Of The “Big Mo”
The Compound Effect depends on consistency. This is where the power of momentum comes in. The Power of Big Mo. We have to exert the most energy at the start when we’re trying to kick ourselves into momentum. It’s just like how a space rocket uses most of its fuel during the first few minutes of launch. It needs momentum to kick itself into space, but once it’s there, it just rides its momentum and doesn’t require much more fuel. Or why some people who at first may struggle to go to the gym, all of the sudden have biceps the size of a certain Kardashian's butt and now they’re gym junkies who can’t stop going to the gym. They all have momentum.
And here’s the thing. nothing kills momentum quicker and with more certainty than a lack of consistency. So no matter what, you should prioritize consistency over big one-off gains. For example, do one push up every day if you have to instead of doing 100 push-ups all in one go. This doesn’t build momentum. Also, avoid falling into the trap of saying “Oh I’ll just do it tomorrow if I missed it today”. Do whatever it takes to do it every single day. If it’s too difficult to keep up, make the habit even easier for yourself.
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