compound effect 
by darren hardy 

The Book’s Main Idea
As used in the book, Compounding describes how over time, seemingly small changes or insignificant actions can lead to big rewards. The small choices, the ones you think do not matter and are therefore not conscious when making them, can derail your life and your progress towards your goals. The small things can really make all the difference.

“It's not the big things that add up in the end; it's the hundreds, thousands, or millions of little things that separate the ordinary from the extraordinary.”

1: Small, smart choices + consistency + time = Radical Difference
Hardy offers this formula as the baseline for all kind of success. This formula aligns with the underlying concept of the compound effect: huge rewards come from a series of small choices or actions. Once you decide what you want to achieve, rather than concentrate on massive changes, concentrate on making small choices and taking small, but consistent action. Over time, this will have a profounder effect on your success and overall wellbeing.

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

To illustrate the power of compounding choices, Hardy uses the Magic Penny Example where two people get the choice to receive a magic penny that doubles in value daily or three million dollars ($3 million). Person A opts for the magic penny while person B opts for the cash.

By day 31, person’s A penny will have compounded to over ten million dollars ($10 million), while person B will have less than $3 million—minus all the money he or she will have used up to that point.

If you aim to make any significant change in your life, focus less on big changes and more on small changes. As Hardy notes:

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

If you want to eat healthy, for instance, once you make the choice, change your environment: desensitize it to immediate gratification and instead sensitize it to the power of compounding, smart choices. Instead of snacking on candy, snack on fruits. If you want to write a book, make the choice to write 250 words daily; over a month, you will have written 7,500 words. That is the power of compounding.

“The real cost of a four-dollar-a-day coffee habit over 20 years is $51,833.79. That’s the power of the Compound Effect.”

2: Take responsibility for your life
“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.”

If you are determined to change your life, you must take responsibility for it. In the book, the author illustrates a story where a relationship instructor who, giving a talk to spouses, asked them this profound question:

“What is your % ratio in terms of giving and expecting to receive back?”

Audiences gave varying answers. Some said 50%—giving 50% and expecting 50% back. Some said 40%, 60%; others said 80%, 20%. The relationship instructor walked back to the whiteboard and wrote “100% to 0%,” an answer he explained by saying:

“Only when you’re willing to take 100% responsibility for making the relationship work, will it work. Otherwise, a relationship left to chance will always be vulnerable to disaster.”

This statement is true for all areas of your life: unless you take 100% responsibility for your success and creating the life you want to live, you will never live it. If you are unwilling to take 100% responsibility for your present and future life, action, and choices, your life will never change:

“You alone are responsible for what you do, don’t do, or how you respond to what’s done to you.”

Even when what happens to us is outside our immediate control, say a natural disaster, an accident, or an ailment, we always have a choice: we choose our responses. Even when some situations are unchangeable, we can change how we view or respond to such situations.

“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.”

As long as you are aware of your moment-to-moment choices, and are making sure that the choices you make align with your main aim, you will achieve what you want. It may take a while, but once your choices compound into habits, the progress will be smoother and seamless.

Conclusion
“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.”

Darren Hardy