The Compound Effect 

Darren Hardy 

Book Overview from the Publisher 

The  Compound  Effect  is  based  on  the  principle  that  decisions  shape  your  destiny.  Little,  everyday 
decisions  will  either  take  you  to  the  life you desire or to disaster by default. Darren Hardy, publisher 
of  ​Success  Magazine​,  presents  ​The  Compound  Effect​,  a  distillation  of  the  fundamental  principles 
that  have  guided  the  most  phenomenal  achievements  in  business,  relationships,  and  beyond.  This 
easy-to-use,  step-by-step  operating  system  allows  you  to  multiply  your  success,  chart  your 
progress,  and  achieve  any  desire.  If  you’re  serious  about  living  an  extraordinary  life,  use  the power 
of T
​ he Compound Effect t​ o create the success you want. 

KEY POINTS COVERED IN THIS SUMMARY: 

1. Frequent, Small, & Seemingly Inconsequential Choices ​- How small 
choices actually make large impact 
2. Momentum ​- 3 keys to building and speeding up momentum 
3. Tracking -​ How to stop wasting time and become highly effective 
4. Associations ​- Taking stock of the people in your life is crucial for 
your success 
 

1)  Frequent,  Small,  and  Seemingly  Inconsequential 

Choices 
We  are  all  making  frequent,  small,  and  seemingly  inconsequential choices over and over again. 
In the moment these small choices don't feel like they're making any difference.  
 
Let’s take a look at these example choices: 
 
Daily POSITIVE CHOICES (Person 1)  Daily NEGATIVE CHOICES (Person 2) 

Going  for  a  15-minute workout after coming back  Watching TV for 15 minutes 

from work.   

Working on your business for 2 hours  Watching a movie 

www.2000books.com 
 Watching educational videos  Watching sitcoms 

Eating and drinking healthy  Eating junk food 

 
Initially when you're doing these things, the effects are not visible. 
● It would feel like you're not really making any positive difference in your life. 
● It  would  seem  like  both  persons  making  these  different  choices  are moving in the same 
direction.  
● The choices would feel inconsequential as they are just small choices.  
 
But  over  time,  these frequent, small, and seemingly inconsequential choices -- whether positive 
or negative -- become very powerful. 
 
As you do something again and again, it builds momentum.  
 
15  minutes  don't  seem  like  they  make  a  big  difference,  but  over  time  they  keep  on  adding  up. 
After a while the difference is huge.  
 
The  compound  effect  is  sneaky  since  initially  you  don't  see any results for a while, so you don't 
believe  these  choices  really  have  any consequences. But the truth is the consequences are very 
dramatic. By the time they start showing up, it's too late.  
 
The  compound  effect  starts  to  work  as  you  consistently  put  in  the  effort  and  make  the  right 
choices. 
  
On  the  other  hand,  if  you're  consistently  doing  the  wrong  things  again and again, even though 
they don't feel like a big deal in the moment, your life goes down dramatically.  
 
So  realize each of those recurrent small, inconsequential decisions that you think doesn't matter 
--  a  5-minute  break  for  social  media  or  a  news  site  instead  of  working on your business -- is a 
very definite choice you're making every single time.  

2) How to Build and Speed Up Momentum 

 
If you’ve ever seen a train speeding by, you know it is a very dangerous machine.  
● A  train  moving  at  55  miles  per  hour can actually run right through a 5-feet-deep wall of 
concrete. It will keep running forward.  
● However,  let’s  say a 1-inch block of wood is placed in front of the wheels of a stationary 
train.  In  that  case,  the  train  would  not  even  budge  forward  even  if  it’s  engines  are 
humming. It’s stuck.  
 

www.2000books.com 
Why  is  it  that  when  the  train  is  initially  starting  to  move,  it  can  be  stopped  with  just  a  1-inch 
wide  piece  of  wood,  but  when  it  has  been  running,  it  is  able  to  ram  through  a  5-feet  wall  of 
concrete? 
 
The difference of course is momentum. Massive momentum.  

3 Keys to Building Momentum  

If  you  want  to  have  the  momentum  of  a  speeding  train  that  will  not  be  stopped  in  the  face  of 
any obstacles, these are the ideas to remember and understand: 
 
1. I​ t takes a lot of effort initially to get something moving.  
 
In  fact,  a  lot  of  effort  initially  leads  to  very  little  results  --  and  that's  true  for  all kinds of efforts. 
You put in a lot of effort and you get miniscule results.  
 
Most  people  will  actually  give  up  because  of  not  seeing  results  initially.  However,  the  key  to 
building  momentum  is  to  go  right  through  the  stage  and  continue  to  consistently  put  in  the 
effort and hard work in order to get something to move.  
 
2. C ​ onsistency is the ultimate key to momentum. 
 
The  train  has  an  engine  and  has  pistons  that are moving it and consistently pushing it forward. 
The  engine  is  doing  all  the  work  very  consistently,  and  that  leads  to  a  consistent  output. It is a 
machine with very predictable and consistent motion.  
 
3. I​ n order to build consistency, we need routines.  
 
Just  as  a  train’s  engine  has  a  precise  system  of  how  everything  works  together,  we  also  need 
routines in our lives in order to make our momentum work.  
 
No routines ➜ No consistency ➜ No momentum ➜ No execution 
  
So  just  remember  that  while it initially takes a lot of effort and the results are very limited, these 
results will eventually get bigger if we consistently put effort over time.  
 
To  get  big  results,  the  only  way  is  to  make  sure  you  have  routines  in  place  to  move  things 
forward, to make sure you do what you said you would do. 

3) Tracking 
How can we stop wasting time and become highly effective?  

www.2000books.com 
 
The  answer  is  ​tracking​.  And  not  only  is  this  technique good in helping us make use of our time 
well,  it  is  also  good  for  improving  any  behavior  in  any  area  of  our  lives.  Whether  it’s  with 
exercise,  money,  or  food  whatever  you’re  going  after,  you  can  improve  your  behavior  with 
tracking. 

How tracking works 

 
● Simply  write  down  throughout  the  day  in  your  notebook  or  journal  how  you  used  a 
resource or did a behavior.  
● Log it as soon as you’re doing it or as soon as you’ve done it but not at a later time. 
● You cannot do this from memory. You have to take note of it right away. 
● When you change the task or do something else, write down what you did. 
● Now you are tracking everything.  
 
EXAMPLE: You want to control your weight.  
● Start noting down everything that you're eating.  
● You’ll start seeing a dramatic difference from Week 1 to Week 2.  
● You become conscious. You now become aware of what you're doing.  
● You get closer to your goal. 
 
Once  you  start  tracking, you start eliminating the bad behaviors and do the right things instead. 
You  make  good  choices  again  and  again.  Just  the  simple  act  of  tracking  moves  you  into  the 
direction you want. 
 
You can’t improve what you can't measure.  
 
If you can't measure something, you can't improve it.  
 
Measurement  is  required  in  order  to  improve,  and  tracking  is  a  really  simple  way  to do it. With 
tracking,  you’ll  actually  start  noticing  what  you're  doing  on  any  given  behavior.  You’ll  see  your 
progress and you’ll get massive results. You've got to do it.  
 

When and how long to do your tracking 

 
Do your tracking for ​3 weeks​ (Week 1, Week 2, Week 3). 
 
You'll  start  to  see  improvement  from  Week  1  to  Week  2  and  you'll  see  improvements  again 
from Week 2 to Week 3.  

www.2000books.com 
Do  it  for  3  weeks  to  see  the  real  effects  of  this  tracking.  You'll  be  astonished  with  how  you're 
wasting your time and how well you start using your time.  

4) Associations 
 
Associations are one of the most powerful ways in which the compound effect works in our life.  
 
As Jim Rohn, the great personal development guru, said: 
 
We are the average of the 5 people we spend the most time with.  
 
In every area of your life, you are the average of the 5 people you spend most of your time with.  
 
So  if  you  spend  your  time  with  positive,  uplifting  people  who  are  going  somewhere  in life, you 
are  growing  up  in  life  as  well.  If  you  spend  it  with  negative  people,  your  life  will  move  in  the 
wrong direction. 
 
If  you  look  at  the  average  income  of  the  5  people  you spend the most time with, you'll see that 
you are somewhere in that neighborhood as well.  

EXERCISE: 
 
Here's  a  really  simple  but  powerful  exercise  you  can  do  to  start  making  changes  in  your 
associations. 
 
● Make a list of all the people you associate with on a daily, weekly, monthly basis.  
● Now make 3 separate lists.  
a. Disassociations  -  People  we  need  to  stop  associating  with  because  they're 
actually pulling us down 
b. Limited  associations  -  People we need to have limited engagement with.  These 
are  the  people  whom  we  can  spend  a  few  hours  or  a  few  days  with  but  we 
cannot spend a lot of time with.  
c. Expanded  associations  -  Your  most  powerful  group  of  associations.  These  are 
the  people  you  need  to  spend  more  time  with,  the  people  in  your  life  who  will 
actually move you up in life.  
 
So  make  these  3  lists  of  the  people  in  your  life  and  start  evaluating  your time use according to 
these lists.  
 
As David McClelland of Harvard University said: 

www.2000books.com 
 
95% of our success comes as a result of the people we associate with. 
 
That’s  a  huge  part  of  our  success.  So  it's  a  really  powerful  idea.  The  associations  we  have will 
change the trajectory of our lives, whether up or down. 
 
Related Books: 
● The 80/20 Principle  
 
 

www.2000books.com