The Compound Effect can be illustrated by the classic story of the tortoise and the hare. The tortoise who is slow but consistent ends up winning in the end. The compound effect is about achieving huge long-term gains through positive habits consistently applied on a daily basis. Consistency is the biggest key to success yet the majority of people struggle with it. Any successful person will tell you that their success is due to their positive daily habits and rituals that they execute regularly.
“The Compound Effect is the principle of reaping huge rewards from a series of small, smart choices.” This is a quote by the author Darren Hardy who was making a six-figure income in his own business by the age of eighteen and by age twenty-four was making an income of more than one million a year.
The Compound Effect can be used to improve anything from things such as your health, relationships, finances or almost anything else that you can think of. The reason that many people give up on this process is they do not feel significant progress on a day-to-day basis. Our society has been trained to try to “get rich quick” or “lose ten pounds in ten days”. One of Hardy’s examples is somebody quitting running after eight days because they are still overweight. The point is we have been trained to seek instant gratification and this is not the way to achieve long-term success in any area of your life.
The formula: small, smart choices + consistency + time= radical difference
I will demonstrate the compound effect in action through the story of three friends that the author uses in the book. We will look at three friends who grew up together, live in the same neighborhood, make around $50K a year, all are married and average weight with a little bit of “marriage flab.” I will use three random common names to illustrate the concepts.
The first friend, Tom, doesn’t really change anything in his life. His happiness is average and sometimes he complains that nothing ever changes. But he makes no effort to change anything in his life.
The second friend, Bill, starts making some changes that seem insignificant but positive. He starts reading 10 pages of a good book per day and listening to something instructional or inspirational while he commutes to and from work every day. He has also decides to cut 150 calories a day. A very small change that doesn’t involve much more than decreasing the portion size of a meal a day. Lastly, he decides to start walking a couple extra thousand steps a day. Bill has made no major commitments or life changes but he plans to stick with these new habits. Let’s see how this plays out for him.
The third friend, Jim, makes a few seemingly insignificant yet poor choices. He purchases a brand new big-screen TV and starts watching more of his favorite TV shows every night. He’s been trying out different recipes he has been watching on the Food Network- he’s a big fan of desserts and anything cheesy. He also installed a new bar and is drinking one more alcoholic drink a week.
At the end of five months, you will see about zero change between the three friends. Bill continues reading and learning, Jim continues enjoying his routine, and Tom doesn’t really do anything different from before. This is the same result at the end of month ten.
However, by about month twenty-five, significant differences can all of a sudden be realized. By month thirty-one, the change is way too large to ignore. With a simple calculation, it can be seen that by cutting 125 calories a day Bill has actually lost 33.5 pounds.
31 months= 940 days
940 days X 125 calories/day= 117,500 calories
117,500 calories divided by 3500 calories per pound= 33.5 pounds
By this same calculation, Jim has actually gained 33.5 pounds. This makes the difference between him and Bill 67 pounds! Now those are some big numbers. Let’s take a look at the change in other areas fo the friends lives. Bill has over time now invested around one thousand hours reading good books and listening to instructional and motivational tapes (self-improvement tapes). He has been putting everything he learned into practice, he has earned a promotion and a raise and his marriage is thriving. Meanwhile, Jim is unhappy at work and his marriage is close to failing. Tom is pretty much exactly the same as he was thirty-one months ago.
The power of the Compound Effect is that now it appears as Bill changed his life overnight almost becoming an “overnight success”, yet the result of this is because of small, smart choices executed consistently for a long period of time. This is a common misconception in society, where somebody seems to rise to fame and success quickly; however, in reality, they have been working hard behind the scenes for a very long time.
The results of the compound effect actually have a ripple effect into other areas of the three friends lives. Since Jim has been eating more, he is more sluggish at night. He wakes up groggy and this makes him cranky. The sleep issues and lack of energy begin to affect his performance at work. He’s less productive which leads to negative feedback from his boss. This makes him feel dissatisfied, stressed and takes his energy levels down even more. This makes him turn to even more sweets and junk food upon returning home.
The lack of energy he has makes him less likely to work out with his wife which he used to do. With fewer shared activities their relationship begins to deteriorate. Brad is also not getting the endorphins or energy he needs to be his normal enthusiastic self. His unhappiness causes him to begin to find fault with himself and others such as his wife. He stops complimenting her, his body is getting flabbier, he’s less confident, attractive and romantic.
Jim doesn’t realize the negative effect of his poor habits and lack of energy. He starts to lose himself in late night TV as an easy getaway and distraction. The lack of affection to his wife begins to seriously affect her. She gets needy and then proceeds to emotionally withdraw herself to protect herself. Their relationship continues to deteriorate and Jim feels as though his wife is at fault. As opposed to looking at the negative changes and results happening in his life.
This same kind of ripple effect can work in a positive way as can be seen with Bill. The positive changes he has developed are carrying over into every aspect of his life.
In conclusion, be like Bill, don’t be like Jim. You can dramatically change the outcome of your life through simple, small consistent steps on a daily basis. Let the Compound Effect help you to improve your life in every way. Don’t sit idle and let it work against you! You can create the change you want to see in yourself by being consistent. I encourage you to examine your life and try to think of a couple small yet positive changes that you could initiate now that could lead to huge long-term benefits over time.
I encourage readers to share any daily rituals or habits that they have developed or are currently working on that they are proud of. I also encourage you to speak about any bad habits you may realize you have and how you are working to change them! Comment below and let’s help each other to reach our goals!