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The Compound Effect by Darren Hardy
Jump-start Your Income, Your Life, Your Success

My Thoughts

The Compound Effect has had a significant impact on me, I have re-read it multiple times. I recommend the audio version which is read by the author, it is motivating and inspiring.

My Favorite Quotes

• Formal education will make you a living, self-education will make you a fortune.
• The slightest adjustments to your daily routines can dramatically alter your life.
• One bad habit can put you miles off course from where you want to go in life.
• All of the hows are meaningless until your whys are powerful enough.
• Success without fulfillment is failure.
• Whatever you vividly imagine, ardently desire, sincerely believe and enthusiastically act upon must inevitably come to pass.
• Writing your goals down is the starting point.
• Success is something you attract by the person you become.
• You will never change your life until you change something you do daily.
• You cannot maintain connections with people that will hinder your ability to become great.
• You can have any mentor you want if they have put their thoughts in writing, audio, podcasts, etc.
• You get in life what you tolerate.  You will get in life what you accept and what you expect you are worthy of.
• There is an amazing power in positive expectancy.
• Don’t wish it were easier; wish you were better.
• Common things deliver common results.
• Always do and be better than expected.
• Your reputation for excellence multiplies your results in the marketplace many times over.
• Learning without execution is useless.
• We are one or two habits away from a major transformation.

Key Questions

• Are you learning, growing, and being challenged every day?
• What type of people do you want to be surrounded by?
• Who do I want to become?
• Ask each other, on a scale of 1-10 how would you rate our relationship this week?
  What would it take to make the experience a 10?
• Who do you spend the most time with and who are the people you most admire? Are those groups the same? If not, why not?
• Do you surround yourself with engines or anchors?
• Who is the top person in your field?
• Ask your friends:
  How do I show up to you?
  What are my strengths?
  Where can I improve?
  Where do you think I sabotage myself?
  What is the one thing I could stop doing that will benefit me the most?
• Ordinary is okay, but why not go for extraordinary?
• Look back on your life five years ago. Are you now where you thought you would be 5 years later?
  Have you kicked the bad habits you vowed to kick?
  Are you in the shape of wanted to be?
  Do you have the cushy income, the enviable lifestyle and the personal freedom you expected?
  Do you have the vibrant health, abundant loving relationships, and world-class skills you intended to have by this point in your life?

Introduction

Talk about things that matter to people who care.
There are no new fundamentals. Truth is not new; it’s old.
Success is doing a half-dozen things 5,000 times. Not doing 5,000 things a half-dozen times.
This book is not for you if you have an aversion to discipline, hard work, and commitment.

Visit www.thecompoundeffect.com/free for free downloads and handouts.

Chapter 1: The Compound Effect in Action

Slow and steady wins the race.
Hurdles to following the Compound Effect;
You haven’t experienced the payoff of the compound effect.
The compound effect is the principle of reaping huge rewards from a series of small smart changes.
Formula to remember: small smart choices + consistency + time = radical difference.
Consistency over time is important.
The magic compounding penny.

Three friends comparison. [the three friends comparison is life changing, worth buying the book just to listen to this]

• Larry: stays the same. In no man’s land.
• Scott: make a few small changes, cuts out 125 calories a day, walking daily, starts listening to a few minutes of personal development material daily.
• Brad: makes a few poor choices. Adds 125 calories a day.

After 18 months there is a slight difference between the three friends. After 25 months there is a measurable difference. After 31 months there are startling differences. Scott has lost 33.5 LBS and Brad has gained 33.5 LBS.
You can choose to green and grow or ripen and rot.

The ripple effect. One small change can make a huge difference with the ripple effect.
Knowledge is potential power.
Ideas without action leads to delusion.

Chapter 2: Choices

Our life is an accumulation of the choices we make.
The little (bad) choices can throw you way off track.
The Compound Effect always works, even against you when you make bad choices.
Watching mindless TV. Eating junk food, etc.
Keeping a Thanksgiving journal about his wife.
Montel Williams idea. Keep a journal by your bed and write down three things that happened in the day that you are grateful for. Also any unique observations from the day about people, life or myself. Any “Aha!” Ideas, insights, quotes or moments.
Identify and enjoy the feeling of being grateful. Express that feeling to others.
What you appreciate appreciates.

Owning 100%.
I am 100% in control of me.

Getting lucky.
We are all incredibly lucky.
The complete formula for getting lucky: preparation (personal growth) + attitude (belief and mindset) + opportunity (good thing coming your way) + action (doing something about it) = luck.

Preparation
Consistently improve yourself.

Attitude.
Luck is all around us.
See situations, conversations and circumstances as fortuitous.
You cannot see what you don’t look for. You cannot look for what you don’t believe in.

The high price of tuition at UHK. University of Hard Knocks.

From this day forward choose to be 100% responsible for your life and eliminate all of your excuses.

Your Scorecard. Your secret weapon.
Right this moment pick an area of your life where you most want to be successful.
Become aware of your choices.
Track every action that relates to the area of your life you want to improve.
Track your progress and miss-steps.
What is simple to do is also simple not to do.
Successful people are willing to do what unsuccessful people are not.
Track time you spend improving a skill.
Track your behaviors for at least one week.

You cannot manage or improve something until you measure it.
Know how well you are doing at any moment.
All winners are trackers.
Tracking is not easy but it is simple and anyone can do it.
Becoming conscious of your actions begins to shape them.
Focus on small improvements, most people won’t even notice them. A winning horse only wins by a nose, it’s not 10 times better but it gets 10 times the prize money.
Take a walk.
Save 10% of your income every month.
Start now.
Brian Tracy’s book Focal Point tells how to improve in any area of life by 1,000%.
All you have to do is improve yourself, your performance and your output by .1% (one tenth of one percent) each work day. That is 1/1000. That amounts to 1/2% each week, 2% each month, 26% each year. Income doubles each 2.9 years. By year 10 you could be performing and earning 1,000% of what you are now.
Are you learning, growing and being challenged every day?
Formal education will make you a living, self-education will make you a fortune.

Beverly wanted to run a marathon. Started with small new habits, example of walking only one mile three times in two weeks and building from there. Her sales performance doubled over this time and many other areas of her life improved.

Chapter 3: Habits

Pulling up saplings of trees, bigger saplings, and a full grown tree. Same as stopping bad habits.
The longer you have a habit the deeper the roots grow and the harder they are to uproot.
We are what we repeatedly do. – Aristotle.
Are you on autopilot letting your habits run you?
Become a creature of championship habits.
With enough practice and repetition any behavior, good or bad, becomes automatic over time.

Start thinking your way out of the instant gratification trap.

The slightest adjustments to your daily routines can dramatically alter your life.

One bad habit can put you miles off course from where you want to go in life. Example of an airplane that is 1% off course flying from Los Angeles to New York will end up 150 miles from the destination.

Find your “Why power.”
Your choices are only meaningful when you connect them to your desires and dreams.
The wisest and most motivating choices are the ones aligned with that which you identify as your purpose, your core self, and your highest values.
What is your why?
Darren focuses on finding your why in his first book Designing Your Best Year Ever.
All of the hows are meaningless until your whys are powerful enough.
You must look beyond the motivation of monetary and material goals.
Material things cannot recruit your heart, soul and guts into the fight.
Focus on fulfillment, not just achievement.
Success without fulfillment is failure.

Core Motivation
Define your core values.
Your internal compass.
Do not set goals that are in friction with your values.

Find your fight.
Ignorance.
Disease.
Injustice.
Goliath.
Darth Vader.
Pete Carol was small.
Anthony Hopkins was dyslexic and angry.
It is within our ability to cause anything to change.

Goals
The Compound Effect is always working.
You must know where you want to go.
Whatever you vividly imagine, ardently desire, sincerely believe and enthusiastically act upon must inevitably come to pass.

When you set a goal, ask yourself “Am I willing to trade my life for the accomplishment of this goal?” Because that is essentially what you are doing.

Build your life plan before you set your business goals.
Design your life first.
Where do you want to live?
What type of people do you want to be surrounded by?
Do you want to work nights and weekends?
Whether you want to travel, how much and where.
Whether you want to be home for dinner every night.
If you want a short commute.
What type of environment you want to go to every day.
How you want to dress.

How Goal Setting Works
You only see, experience and get what you look for. If you don’t know what to look for, you won’t get it.
Instruct your brain to look for the things you want so that you can see them.
We are bombarded with billions of sensory, vision, audio and physical inputs every day and we ignore 99% of them.
A goal that is not in writing is merely a fantasy.

Writing your goals down is the starting point.

Go for whole life success.

Who you have to become.
This is the first question you need to address. “Who do I want to become?”
Success is something you attract by the person you become.

What do you need to start or stop doing to accomplish your goals.

You (your choices) + your behavior + your habits (compounded) = your goal.

Entertainment vs Education Ratio
The bottom percent of people are focused on entertainment instead of education and improving.

Where our attention goes is where our energy flows.

Write down your top three goals and make a list of any bad habits that might be sabotaging your progress in each area.
Add to this list all of the good habits you need to adopt.

Game Changers: 5 Strategies for Eliminating Bad Habits
Bad habits have been learned and they can be unlearned.
All time favorite game changers.

1. Identify your triggers. Identify what triggers each bad habit. The who, what, where and when.
2. Clean house. If you want to quit coffee, get rid of everything related and take it out of the house. Junk food, shopping catalogs, etc. Get rid of anything that enables your bad habits.
3. Swap it. Alter your bad habits so they are not as harmful or replace them. Example, the author replaces an ice cream Sunday with two Hershey kisses after dinner.
4. Ease in. Like entering the water. Taking small steps might be more effective for you.
5. Jump in. For some people it is more effective to make dramatic lifestyle changes all at once.

Ask yourself right now. Where do you need to take small steps and where do you need to take a big leap and jump in.

Run a vice check.
Pick one vice and fast for 30 days.

Game changers:
Seven techniques for installing good habits.
You will never change your life until you change something you do daily.

1. Set yourself up to succeed
2. Think addition; not subtraction
3. Go for a PDA (Public Display of Accountability)
4. Find a success buddy
5. Competition and camaraderie
6. Celebrate
7. Be Patient

One: set yourself up to succeed
Preparation. Have good food on hand. Only join a gym close to your house. Etc. focus.

Two: think addition not subtraction.
Focus on what you want to add instead of what you need to remove. Example: friend gave up TV, bought photography equipment and spent time with his family, outings and building photo slide shows together.

Four: find a success buddy.
Trade wins, losses, aha moments, fixes, solicit needed feedback.

Five: competition and camaraderie.
Look for ways to infuse competition and accountability.

Chapter 4: Momentum

Newton’s First Law of Physics. First law of inertia.
Objects in motion tend to stay in motion.
How to gain momentum:

1. Making new choices based on your goals and core values.
2. Putting those choices to work through positive behaviors.
3. Repeating those healthy actions long enough to establish new habits.
4. Building routines and rhythms into your daily disciplines.
5. Staying consistent over a long enough period of time.

Routine power.
Take a moment to review your goals and behaviors you want to subtract.
Figure out your best routine.
Figure a morning routine and count it as cast in concrete until further notice.

Book-end Your Days
Build your performance around world class routines.
You can always control how your day starts and ends.

Rise and Shine (Morning Routine) (Author’s Routine)
5:00 AM iPhone alarm
5:00-5:08 AM Snooze button and think about three things
First: all the things I am grateful for. Tune my mind to abundance.
Second: send love to someone. The way to get love is to give love. Think of one person you love and send love to them. Imagine all the things you wish and hope for them.
Third: think about my number one goal and decide which three things I am going to do on this day to move closer to reaching it.
Example: at the time of this writing the author’s #1 goal is to deepen the love and intimacy in his marriage.

Get up and brew a pot of coffee.
While it’s brewing he does stretches for about 10 minutes.
Pours a cup of coffee and sits in his big comfortable chair.
Sets iPhone timer for 30 minutes and reads something positive and instructional.
When alarm sounds, take the next hour and work on his most important project for one hour of completely focused and un-distracted effort.
(Notice he has not opened his email yet)
7:00 AM every morning, calibration appointment. A reoccurring appointment set in calendar. 15 minutes to calibrate the day. Brush up on top three one year and five year goals, key quarterly objectives, top goal for the week and month. Review and set top three MVP (Most Valuable Priorities) for the day.
After calibration he opens up email and sends a flurry of emails to get the rest of his team started on their day.
Quickly close email and go to work on top three MVP.

Sweet Dreams (Author’s Evening Cash-out Routine)
Cash-out your day’s performance.
Compared to your plan for the day, how did it go?
What do you need to carry over to tomorrow’s plan?
What else needs to be added based on what showed up throughout the day?
What is no longer important and needs to be scratched out?
Log in journal any new ideas, insights, ah-has that he picked up throughout the day.
Author has collected more than 40 journals of incredible ideas, insights and strategies.
Read at least 10 pages of an inspirational book before going to sleep.

Shake it up. Every so often interrupt your routine so life does not get stale.
Challenge yourself in new ways and freshen up your experience.
Right now author is working on adding more adventure to his life. Sets weekly, monthly and yearly goals to do something he would not normally do.
Eating different kinds of food. Taking a class. Visiting a new destination. Joining a club to meet new people.
Opportunities for fresh perspectives.

Finding Your New Groove
Getting into a rhythm.
Once daily disciplines become a routine, you want the succession of those steps to create a rhythm.
Daily, weekly, monthly, quarterly and yearly rhythm.

Plan Ahead
Example on deepening his marriage.
Design a weekly, monthly and quarterly rhythm schedule on your calendar.
Every Friday night at 6PM is a weekly date night.
Every Saturday is family day.
Every Sunday night at 6PM is RR (Relationship Review).
Discuss previous week’s wins, losses and adjustments to make in relationship.
Start by telling each other a few things you appreciate about each other from the previous week.
Ask each other, on a scale of 1-10 how would you rate our relationship this week?
What would it take to make the experience a 10? Make adjustments accordingly.
Increase the frequency and intensity of experiences.
Once a month: do something that creates an experience with some memorable intensity. Hiking, new place, new restaurant.
Once a quarter: plan a 2-3 day getaway. Quarterly review and deeper check-in with relationship.
Annual travel vacation.

Register your rhythm.
Use the form from the website.
Use a habit tracker app.
Think about things to add that you can do for the rest of your life.

Chapter 5: Influences

External forces have subtle control over our lives.
Every person is effected by three kinds of influences.

1. Input – what you feed your mind.
2. Associations – the people whom you spend time with.
3. Environment – your surroundings.

Influence One: Input

Garbage-in; garbage-out.
We can protect and feed our mind.
Don’t drink dirty water!
You get in life what you create.
Expectation drives the creative process.
What do you expect? You expect whatever you are thinking about.
Whatever you allow yourself to see and hear effects your thoughts.

Step one: Stand Guard
Cancel subscriptions.
Stop listening to news and sports on the drive to work.
TV makes your mind feel bloated and malnourished.
Put yourself on a media diet.

Author’s personal junk filter:
Does not watch or listen to any news.
Does not read any newspapers or news magazines.
Uses custom RSS feed for only industry related news.

Step two: enroll in “drive time-U”
Turn your car into a mobile classroom.
Every year you gain the equivalent of two semesters of an advanced college degree.

Influence Two: Associations

Your reference group.
Determines as much as 95% of your success or failure in life.
Who do you spend the most time with and who are the people you most admire? Are those groups the same? If not, why not?
You are the average of the five people you spend the most time with.
Your associations only nudge you slightly, they don’t shove you.
You cannot hang out with negative people and expect to have a positive outlook on life.
Do you surround yourself with engines or anchors?
Write the names of the people you spend the most time with and their characteristics. Free worksheet on compound effect website to help.
3 min, 3 hour, and 3 day friends.

• Dis-associations.
• Limited associations.
• Expanded associations.

Reach out.
Join organizations, businesses and health clubs where these people hang out.

Three columns of friends.
Top 5 professional
Top 5 personal
Top 5 most influential acquaintances and partners in service
You cannot maintain connections with people that will hinder your ability to become great.
You can have any mentor you want if they have put their thoughts in writing, audio, podcasts, etc.
Decide who you want to be more like and make them a mentor. Who is the top person in your field?
Find a peak performance partner.
Weekly call 30 minutes every Friday.
Discuss wins, losses, fixes, and ah-has.

Ask friends:
How do I show up to you?
What are my strengths?
Where can I improve?
Where do you think I sabotage myself?
What is the one thing I could stop doing that will benefit me the most?

Invest in mentor-ship.
Expand yourself and your ideas.
Mentoring is your true legacy.

Develop your own personal board of advisers.
Solicit ideas.
Run thoughts by them.
Ask for feedback and input.
Seek out positive people who have achieved the success you want to create in your own life.
Never ask advice of someone with whom you wouldn’t want to trade places.

Influence Three: Environment

Changing your view changes your perspective.
Where you live.
Whatever surrounds you.
Clear out the clutter in your life. Not just physical.
Psychic clutter.
You get in life what you tolerate.
You will get in life what you accept and what you expect you are worthy of.
If you tolerate disrespect, you will be disrespected.
Protect your emotional, mental and physical space.
Paul J Meyer multi-billion dollar producer. “Inverted-paranoid. I believe everyone in the world is out to get me and help me accomplish what I want to do.”
There is an amazing power in positive expectancy.
Make sure your environment is welcoming and supportive of you becoming, doing and performing at world class levels.

Chapter 6: Acceleration

Biking up a hill. Lance Armstrong.
Moments of truth.
Where you define who you are and who you are becoming.
Growth and improvement live in moments of truth.
A rider’s real opponent is himself. Lance Armstrong.
What you do after you have done your best creates victories. Lou Holtz.
Lance Armstrong in Tour De France. Bad weather is perfect attacking weather because other riders don’t like it.
Don’t wish it were easier; wish you were better.
When you hit the wall is when you are separating your new self from your old self.

Multiplying your results.
Just a little more effort can add exponentially to your output.
Reps done after your max do not just add to results, they multiply results.
Do more than enough.

Beat the expectations.
Example: Oprah giving everyone in her audience a car.
You can do more than expected in every aspect of your life.
When can you go for “Wow!”?

Do the unexpected.
What’s popular is average.
Common things deliver common results.
McDonalds, Coca Cola, etc.
Ordinary is okay, but why not go for extraordinary?
Example, hand written Thanksgiving cards instead of Christmas cards. Writing down what he appreciates about each person.
Example: Richard Branson marketing of Virgin brands.

Ensure your success by going all-in and all-out.
Author uses what he calls a “shock and awe” campaign.
Pull out all the stops.
Example: trying to get a job.
Be aggressive.
Make an impression.
Do the unexpected to have your voice heard.

Doing better than expected.
Find the line of expectation and then exceed it.
Always do and be better than expected.
Your reputation for excellence multiplies your results in the marketplace many times over.
Nordstrom return policy.
Find as many opportunities for wow as you can.

Conclusion

Learning without execution is useless.
Motivation without action leads to delusion.
Learn less; study more.
After reading stop to digest, contemplate, act, review and improve on anything.
Knowledge is the potential for power.
If you try to implement all of the ideas at once you will become paralyzed.
What we lack is real growth, improvement and development.
Read, listen, summarize key ideas and write out how you are going to implement them, now act, review and improve. Then act again, review and improve.

Author suggests a study and growth plan under these time parameters.

21 Days
Pick a new discipline, behavior or habit you want to form.
Only work on one or two new habits at a time.
That is a minimum of 17 New disciplines and habits that you can form in a year.
That will revolutionize your life.
We are one or two habits away from a major transformation.

90 Day
Pick a theme of growth and commit to work on it for 90 days.
Quarterly theme for your life and business.

3 Years
It takes about three years to get good at anything you set out to improve.
Don’t expect to be an overnight success, there is no such thing.

5-7 Years
Time it takes to develop mastery.
You can become world class at almost anything with deep focused study.

Author’s motivation and core value in life is significance. His desire is to make a positive difference in other people’s lives.

Take immediate action on your new ideas and insights!
To get different results you have to do things differently.

Questions from the author.
Look back on your life five years ago. Are you now where you thought you would be 5 years later?
Have you kicked the bad habits you vowed to kick?
Are you in the shape of wanted to be?
Do you have the cushy income, the enviable lifestyle and the personal freedom you expected?
Do you have the vibrant health, abundant loving relationships and world class skills you intended to have by this point in your life?
If not; why?
Simple: choices! Time to make a new choice. Chose not to let the next five years be a continuum of the last five. Chose to change your life once and for all.

Let’s make the next five years of your life fantastically different from the last five.

No more excuses! Refuse to be fooled by the latest gimmick or become distracted by quick fixes.

One last valuable success principle.
Whatever you want in life, the best way to get it is to focus your energy on giving it to others.
Confidence = help someone else feel more confident.
Hopeful.
Success = help someone else obtain it.
You become the biggest beneficiary of your own philanthropy.
If this book helped you, give a copy to five people you want to help be more successful.

My Action Steps After Reading

• Started writing down my goals annually at minimum.
• Downloaded and completed all of the worksheets on the compound effect website.
• Purchased and used Living Your Best Year Ever Journal all year. Now a regular part of my routine.
• Gave copies of this book to several friends
• Improved relationships. Developed peak performance partner and expanded several associations. Limited several other associations.
• Started listening to and reading more books.
• Started daily routine of reading material related to my industry.
• Created a growth plan as outlined in the conclusion.
• Making better choices.
• Eating healthier.
• Re-read the book (four times in total)

Related Book Summaries

• Self-Help Book Summaries
• Book Summary: Essentialism
• The Wisdom of Success Book Summary
• Book Summary: Choose Yourself!
• Book Summary: Awaken the Giant Within

Hope you enjoyed this and got value from my notes.
This is my 6th book read in 2016, 69th in 2017, 102nd in 2018, and 12th in 2019.
Here is a list of all my book summaries.

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