OCTOBER

2010
The Compound Effect
Multiplying Your Success, One Simple Step at a Time.
by Darren Hardy

Choose Wisely
Seemingly inconsequential decisions
shape your destiny.
QUICK OVERVIEW
The short but revealing book, The Compound Effect, examines the principle of reaping
huge rewards from a series of small, smart choices. Author Darren Hardy, publisher and
SUCCESS Books
editorial director of SUCCESS magazine, speaks candidly from his personal experiences
© 2010, SUCCESS Media
and from insights picked up by interviewing many of today’s most celebrated achievers. ISBN: 9780981951249
Hardy identifies two main challenges we face when it comes to reaching our goals. 174 pages, $18.00
First, the hype surrounding personal achievement today is extreme—and extremely
false. The sooner we can give up the notion that there is a quick fix or an insta-success
solution, the better off we’ll be. Second, we have the tendency to sabotage our success.
It’s unintentional, of course, but when we neglect to make positive choices consistently, we SUCCESS Points
lose momentum, and rather than soaring, we crash and burn.
From this book you will learn:
Hardy explains this simple truth: There aren’t 5,000 things one needs to do well to
be successful; there are about a half-dozen things that need to be done well, 5,000 times
over. This book brings clarity and focus to those half-dozen things and offers a specific • How small, seemingly
and real-life action plan on how to do them well. Master these fundamentals, repeat inconsequential choices
them consistently over an extended period of time, and the payoff will be extraordinary. impact your success
The six simple steps to success outlined in The Compound Effect will put you on the path
• Why you must take 100
to creating the success you desire and the life you deserve.
percent responsibility for
your life
APPLY AND ACHIEVE • How an attitude of
Hardy defines commitment as “doing the thing you said you were going to do, long
gratitude can change your
after the mood you said it in has left you.” Developing the habit of making positive choices
relationships
requires commitment, and it takes practice. Hardy explains that you build momentum
and see results when you get into a rhythm in which the behaviors necessary for achieving • How and why to get into
the success you desire are second nature. a routine
Download the Rhythm Register and many other free resources at
www.TheCompoundEffect.com/free and start tracking your progress. The tool

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 The Compound Effect

will serve as a visual reminder and help you stay focused on The essence of the Compound Effect is this:
the desired outcome and committed to your decision. Small, Smart Choices + Consistency + Time =

I
RADICAL DIFFERENCE
t’s time someone told it to you straight. You’ve been
bamboozled for too long. There is no magic bullet,
secret formula, or quick fi x. You don’t make $200,000 CHOICES
a year spending two hours a day on the Internet, lose 30 Our choices can be our best friend or our worst enemy. They
pounds in a week, rub 20 years off your face with a cream, fi x can deliver us to our goals or send us orbiting into a galaxy far,
your love life with a pill, or fi nd lasting success with any other far away. Think about it. Everything in your life exists because
scheme that is too good to be true. It would be great if you you first made a choice about something. Choices are at the root
could buy your success, fame, self-esteem, good relationships, of every one of your results. Each choice starts a behavior that
and health and well-being in a nicely clam-shelled package at over time becomes a habit.
the local Walmart. But, that’s not how it works.
We are constantly bombarded with increasingly sensational
claims to get rich, get fit, get younger, get sexier… all It’s the little things that
overnight with little effort for only three easy payments of inevitably and predictably derail
$39.95. These repetitive marketing messages have distorted
our sense of what it really takes to succeed. We’ve lost sight your success
of the simple but profound fundamentals of what it takes to
be successful. In essence, you make your choices, and then your choices
I’m tired of it. I won’t sit back and watch these reckless make you. Every decision, no matter how slight, alters the
messages derail people any longer. I wrote this book to take trajectory of your life—whether or not to go to college, who
you back to basics. I’m going to help you clear the clutter and to marry, to have that last drink before you drive, to indulge in
bring focus to the core fundamentals that matter. gossip or stay silent, to make one more prospecting call or call
My personal experience has proven that, no matter what it a day, to say I love you or not. Every choice has an impact on
you learn or what strategy or tactic you employ, success comes the Compound Effect of your life.
as the result of the operating system of the Compound Effect. Your biggest challenge isn’t that you’ve intentionally been
The Compound Effect is the principle of reaping huge making bad choices. Heck, that would be easy to fi x. Your
rewards from a series of small, smart choices. What’s most biggest challenge is that you’ve been sleepwalking through your
interesting about this process to me is that, even though choices. Half the time, you’re not even aware you’re making
the results are massive, the steps, in the moment, don’t them! Our choices are often shaped by our culture and
feel significant. Whether you’re using this strategy for upbringing. They can be so entwined in our routine behaviors
improving your health, relationships, fi nances, or anything and habits that they seem beyond our control. For instance,
else for that matter, the changes are so subtle, they’re almost have you ever been going about your business, enjoying your
imperceptible. life, when all of sudden you made a stupid choice or series of
Most people get tripped up by the simplicity of the small choices that ultimately sabotaged your hard work and
Compound Effect. For instance, they quit after the eighth momentum, all for no apparent reason? You didn’t intend to
day of running because they’re still overweight. Or, they stop sabotage yourself, but by not thinking about your decisions—
making contributions to their IRA after a few years because weighing the risks and potential outcomes—you found yourself
they could use the cash—and it doesn’t seem to be adding up facing unintended consequences. Nobody intends to become
to much anyway. What they don’t realize is that these small, obese, go through bankruptcy, or get a divorce, but often (if
seemingly insignificant steps completed consistently over time not always) those consequences are the result of a series of
will create a radical difference. small, poor choices.

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 The Compound Effect

For most of us, it’s the frequent, small, and seemingly to ask anybody who doesn’t say, “Of course, I take responsibility
inconsequential choices that are of grave concern. I’m talking for my life.” But then you look at how most people operate
about the decisions you think don’t make any difference at in the world; there’s a lot of finger pointing, victimhood,
all. It’s the little things that inevitably and predictably derail blaming, and expecting someone else or the government to
your success. Whether they’re bone-headed maneuvers, solve their problems. If you’ve ever blamed traffic for being late,
no-biggie behaviors, or are disguised as positive choices or decided you are in a bad mood because of something your
(those are especially insidious), these seemingly insignificant kid, spouse, or co-worker did, you’re not taking 100 percent
decisions can completely throw you off course because you’re personal responsibility. You arrived late because the printer was
not mindful of them. You get overwhelmed, space out, and busy? Maybe you shouldn’t have waited until the last minute?
become unaware of the little actions that take you way off Co-worker messed up the presentation? Shouldn’t you have
course. double-checked it yourself before delivering it? Not getting along
The Compound Effect works, all right. It always works. with your unreasonable teen? There are a countless fantastic
But in this case it works against you because you’re doing… books and classes to help you learn how to deal.
you’re sleepwalking. For instance, you inhale a soda and bag You alone are responsible for what you do, don’t do, or how
of potato chips and suddenly realize only after you polished you respond to what’s done to you. This empowering mindset
off the last chip that you blew an entire day of healthy revolutionized my life. Luck, circumstances, or the right
eating—and you weren’t even hungry. You get caught up and situation wasn’t what mattered. If it was to be, it was up to me.
lose two hours watching mindless TV—scratch that, let’s give I was free to fly. No matter who was elected president, how
you some credit and make it an educational documentary— badly the economy tanked, or what anybody said, did, or didn’t
before realizing you spaced on preparing for an important do, I was still 100 percent in control of me. Through choosing to
presentation to land a valuable client. You blurt out a knee-jerk be officially liberated from past, present, and future victimhood,
lie to a loved one for no good reason, when the truth would I’d hit the jackpot. I had the unlimited power to control
have worked just fi ne. What’s going on? You’ve allowed my destiny.
yourself to make a choice without thinking.
And as long as you’re making choices unconsciously, you
can’t consciously choose to change that ineffective behavior THANKSGIVING YEAR-ROUND
and turn it into productive habits. It’s time to WAKE UP and We’re particularly gifted in the finger-pointing department
make empowering choices. when it comes to our romantic relationships—you know, where
the other person is the one who needs to change. Let me explain
how something extremely simple, taking less than five minutes a
OWNING 100 PERCENT day, can literally change your life.
We are all self-made men and women, but only the A few years back, a friend of mine was complaining about
successful take credit for it. I was eighteen when I was his wife. From my observation, she was a terrific lady, and he
introduced to the idea of personal responsibility, and the was lucky to have her. I told him as much, but he continued to
concept completely transformed my life. point out all the ways she was responsible for his unhappiness.
I quickly understood how this concept could transform That’s when I shared an experience that had literally changed my
every area of my life. If I always took 100 percent responsibility marriage… and me.
for everything I experienced—completely owning all of my One Thanksgiving, I decided to keep a Thanks Giving journal
choices and all the ways I responded to whatever happened for my wife. Every day for an entire year I logged at least one
to me—I held the power. Everything was up to me. I was thing I appreciated about her—the way she interacted with her
responsible for everything I did, didn’t do, or how I responded friends, how she cared for our dogs, the fresh bed she prepared,
to what was done to me. a succulent meal she whipped up, or the beautiful way she styled
I know you think you take responsibility for your life. I’ve yet her hair that day—whatever. I looked for the things my wife

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was doing that touched me, or revealed attributes, characteristics, permanently, the poor habits that continually take you off course
or qualities I appreciated. I wrote them all down secretly for the and give you exact guidelines on how to, identify first, then install
entire year. By the end of that year, I’d filled an entire journal. the success habits you need to take you in the direction of your
When I gave it to her the following Thanksgiving, she cried, goals, dreams and ambitions. But I will outline for you here the
calling it the best gift she’d ever received. (Even better than the beginning key—awareness.
BMW I’d given her for her birthday!) The funny thing was that I’m about to walk you through one of the single greatest
the person most affected by this gift was me. All that journaling strategies I’ve ever used in my personal development. This
forced me to focus on my wife’s positive aspects. I was consciously strategy helps me take control of the choices I make throughout
looking for all the things she was doing “right.” That heartfelt the day, causing everything else to fall into place, and leading
focus overwhelmed anything I might have otherwise complained to behaviors and actions that shepherd my habits into line like
about. I fell deeply in love with her all over again (maybe even dutiful, loyal minions.
more than ever, as I was seeing subtleties in her nature and I learned the power of tracking the hard way, after I’d acted
behavior instead of her more obvious qualities). My appreciation, like a colossal idiot about my finances. Back in my early twenties,
gratitude, and intention to find the best in her was something I when I was making a lot of money selling real estate, I met with
held in my heart and eyes each day. This caused me to show up my accountant. “You owe well over $100,000 in taxes,” he said.
differently in my marriage, which, of course, made her respond “What?!” I said. “I don’t have that kind of cash just lying around.”
differently to me. Soon, I had even more things to write in my “Why not?” he asked. “You collected several times that;
Thanks Giving journal! As a result of choosing to take a mere certainly you set aside the taxes that would be due on that
five minutes every day or so to document all the reasons why I money.” “Evidently I didn’t,” I said.
was grateful for her, we experienced one of the best years of our “Where did the money go?” he asked. “I don’t know,” I said, a
marriage, and it’s only gotten better. sobering confession, for sure. The money had passed through my
After I shared my experience, my friend decided to keep hands like water, and I hadn’t even noticed!
a Thanks Giving journal about his wife. Within the first few Then my accountant did me a great favor. “Son,” he said,
months, he completely turned around his marriage. Choosing to looking me dead in the eyes, “you’ve got to get a grip. I’ve seen
look for and focus on his wife’s positive qualities changed his view this a hundred times before. You’re spending money like a
of her, which changed how he interacted with her. As a result, she drunken fool, and you don’t even know how to account for it.
made different choices about the way she responded to him. The That’s stupid. Stop it. You are now seriously in the hole. You
cycle perpetuated. Or, shall we say, compounded. have to earn more money that you’ll owe additional taxes on just
to pay for your back taxes. Continue this, and you’ll dig your
financial grave with your own wallet.” I immediately got the
SUCCESS OR FAILURE IS A HABIT message.
Aristotle wrote, “We are what we repeatedly do.” Webster Here’s what my accountant had me do: carry a small notepad
defines habit this way: “An acquired mode of behavior that has in my back pocket, and write down every single cent I spent for
become nearly or completely involuntary.” If you’ve been living thirty days. Whether it was a thousand dollars for a new suit or
on autopilot and allowing your habits to run you, I want you to fifty cents for air to fill up my tires, it all had to go down on the
understand why. And I want you to let yourself off the hook. After notepad. Wow. This brought an instantaneous awareness of the
all, you’re in good company. Psychological studies reveal that 95 many unconscious choices I was making that resulted in money
percent of everything we feel, think, do, and achieve is a result pouring out of my pockets. Because I had to log everything,
of a learned habit! We’re born with instincts, of course, but no I resisted buying some things, just so I didn’t have to take out the
habits at all. We develop them over time. Beginning in childhood, notepad and write it in the dang book!
we learned a series of conditioned responses that led us to react Keeping a money log for thirty days straight cemented a new
automatically (as in, without thinking) to most situations. awareness in me, and created a completely new set of choices
In chapter three I outline specific strategies on how to uproot, and disciplines around my spending. And, since awareness

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 The Compound Effect

and positive behaviors compound, I found myself being more

proactive with money in general, putting away more for
retirement, finding areas to save where there was clear waste,
The essence of the Compound
and enjoying the fun quotient of money—“play money”—all the Effect is this:
more. When I did consider shelling out for entertainment, I did Small, Smart Choices +
so only after a long pause.
This tracking exercise changed my awareness of how I Consistency + Time =
related to my money. It worked so well, in fact, that I’ve used RADICAL DIFFERENCE
it many times to change other behaviors. Tracking is my go-to
transformation model for everything that ails me. Over the years
I’ve tracked what I eat and drink, how much I exercise, how I want to offer a word of caution: When people get started in
much time I spend improving a skill, my number of sales calls, a new endeavor, they almost always overdo it. Of course, I want
even the improvement of my relationships with family, friends, you to feel excited about setting up a rhythm for success, but you
or my spouse. The results have been no less profound than my need to find a program that you can absolutely, positively do in the
money-tracking wake-up call. long term without renegotiation. I don’t want you thinking of the
Since your outcomes are all a result of your moment-to- rhythms you can do for this week, month, or even the next ninety
moment choices, you have incredible power to change your life days; I want you to think about what you can do for the rest of
by changing those choices. Step by step, day-by-day, your choices your life. The Compound Effect—the positive results you want to
will shape your actions until they become habits, where practice experience in your life—will be the result of smart choices (and
makes them permanent. actions) repeated consistently over time.
As a society we don’t seem to lack the ambition to start.
We start new diet programs, join gyms and begin all sorts of
ROUTINES AND RHYTHMS New Year’s resolutions. What most people lack is the follow-
A routine is something you do every day without fail, so that through. Not just starting, but staying. Not just beginning, but
eventually, like brushing your teeth or putting on your seatbelt, continuing… long enough to have the Compound Effect kick
you do it without conscious thought. Of all the high-achievers and in and catapult them to extraordinary results, making visible
business owners I’ve worked with, I’ve seen that, along with good the accumulated effect of the many seemingly inconsequential
habits, each has developed routines for accomplishing necessary choices, behaviors and habits performed over time. The key to all
daily disciplines. It’s the only way any of us can predictably regulate this is consistency.
our behavior. There simply isn’t any way around it. A daily routine If there’s one discipline that gives me a competitive advantage,
built on good habits and disciplines separates the most successful it’s my ability to be consistent. Nothing kills the Compound Effect
among us from everyone else. A routine is exceptionally powerful. quicker and with more certainty than a lack of consistency. Even
Once your daily disciplines have become a routine, you want good, passionate, and ambitious people with good intentions
the succession of those steps to create a rhythm. I want to share can fall short when it comes to consistency, and predictably
with you something I created for myself that helps me keep track find themselves at ground zero over and over again and wonder
of the rhythm of a new behavior. I call it my “Rhythm Register,” why. Winning the race is all about pace. Be the tortoise—the
and I think you’ll find it extremely helpful. If you want to drink person who, given enough time, will beat virtually anybody
more water or take more steps each day or acknowledge your in any competition as a result of positive habits and behaviors
spouse more affectionately—whatever behavior you’ve decided you applied consistently.
need to move toward your goal—you’ll want to track it to make I challenge you to adopt these philosophies in your own life—in
sure you’re establishing a rhythm. You can download the system your daily habits, disciplines and routines. Giving a little more
(and a number of other extremely useful tools) for free at www. time, energy, or thought to your efforts won’t just improve your
TheCompoundEffect.com/free. results; it will multiply them.

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 The Compound Effect

ACTION STEPS
Get more out of this SUCCESS Book
Summary by putting what you’ve learned
into action. Here are a few questions and
thoughts to help you get started.
1. Identify three choices, maybe even unconscious ones,
that might be moving you away from your goals.
2. Where in your life are you not taking 100 percent
responsibility? Write down three things you can start
doing right now to take responsibility for the outcomes
of your life.
3. Pick an area of your life you are frustrated with. For at
least three weeks journal all the goods things you can
about this area.
4. Start tracking at least one behavior you’d like to change About the Author
or improve.
Darren Hardy is the publisher and editorial
5. Plan for success. Schedule a regular time for the
behaviors you want to incorporate into your life (e.g., director of SUCCESS magazine. He has been a
exercise, date night, listening to personal-development leader in the personal development industry for 16
audios), and make doing them part of your daily and
weekly routine. years, having led two personal-development-based
television networks—The People’s Network (TPN),
6. List three areas of life in which you are not
consistent enough. and The Success Training Network (TSTN).
7. Go to www.TheCompoundEffect.com/free to download Hardy is a product of the principles he reveals in
the Rhythm Register to help you permanently cement The Compound Effect. As an entrepreneur, Darren
the success disciplines you need in order to achieve
your greatest ambitions. was earning a six-figure income by age 18, more than
$1 million a year by age 24, and he owned a company
producing $50 million a year in revenue by age 27. He
Recommended Reading
If you enjoyed this summary of The Compound has mentored thousands of entrepreneurs, advised
Effect, why not add the book to your personal many large corporations, and serves on the board of
success library? Here are a few other books you
may enjoy: several companies and nonprofit organizations.
He is a popular keynote speaker and appears
7 Strategies for Wealth & Happiness by Jim Rohn
regularly on national radio and TV shows.
No Excuses! The Power of Self-Discipline
by Brian Tracy © 2010 SUCCESS Media. All rights reserved. Materials may not be reproduced in whole or in part
in any form without prior written permission. Published by SUCCESS Media, 200 Swisher Rd., Lake
Mojo: How to Get It, How to Keep It, How to Get Dallas, TX 75065, USA. SUCCESS.com.
Summarized by permission of the publisher, SUCCESS Books, 200 Swisher Rd., Lake Dallas, TX
It Back if You Lose It by Marshall Goldsmith 75065. The Compound Effect by Darren Hardy. © 2010 by SUCCESS Media.

Page 6 SUCCESS.com SUCCESS BOOK SUMMARIES