THE COMPOUND EFFECT : JUMP START

YOUR INCOME, YOUR LIFE, YOUR

SUCCESS
BY DARREN HARDY

If you are given two possible options of

taking 3 Million Dollars in cash or A penny
that doubles in value every day for 31 days,
what choice would you make? Without any
deep thinking, almost everyone would go
for the first option considering these facts:
1. It seems like a whole lot of money
compared to the other
2. It does not require time as you’d get
it almost immediately
3. It is in cash.
However, if we should take a closer look at
these options and make use of basic
mathematics we learned in school, we will
realize that a penny that doubles in value
every day for the next 31 days is worth
almost 11 Million USD. Surprising? This
means that if you had chosen a penny per
day, you would be more than 7 million USD
richer than the individual who chose 3
million USD cash. The little penny over time
made the difference. This is what the
compounding effect is all about.
In essence, the compounding effect is the
act of attaining success starting with small
steps or actions. In the above example, the
small step or action was to accept a stipend
of a penny daily for 31 days while the
success was ending up over 7 million USD
richer than the first option.
The Big Idea of Compound Effect
Your decisions or choices + Your actions or
behaviour + repeated actions + Time =
Success.
Let’s explain each component with relevant
examples.
Choices/Decisions
According to Hardy, the only difference
between the broke, unhealthy and
depressed or the healthy, rich and
undepressed is the choices they made. Our
present state is a product of the decisions
we have made beforehand. For example,
what you have become today be it a doctor,
engineer, business owner, etc., is a product
of the choices you made while growing. In
essence, we can say that our lives are a
reflection of our choices. Take, for instance,
if you decide to lose some weight now, your
life will reflect that you have lost weight in
the future and that’s when you’d hear
people ask you questions like:
“You look slimmer; did you lose some
weight.”
“I like how you look now, much slimmer.”
How do you think they would be able to
detect that you decided to lose weight
some time ago? Because you have become
a physical representation of your choice.
There is a saying that states that success is
a product of the many good decisions you
have made while failure is the product of
the many good decisions you failed to
make. For your life to improve, there must
be an improvement in your decision
making, and for me, a good decision is
borne out of conscious and critical thinking.
I don’t know if this happens to you, but I get
to remember some of the things I did as a
kid, and I feel disgusted that I ever did
them. Can you relate? There was a time I
threw a stone a kid who annoyed me but
rather than the stone hit the kid; it landed
on the screen of a car. I knew there were
cars around, but I wasn’t conscious enough
to think of the possible outcome as I was so
angry at the young lad. That one decision
caused a lot of issues for me that day.
What I am trying to emphasize is that what
makes a good choice is the process of
taking out time to assess and analyse it.
What are the advantages and
disadvantages of each option? If I take this
step, would it work for me? Those and
many more are questions you should ask
yourself. The truth is that many people are
in their worst state today because they
made wrong decisions impatiently without
waiting to analyse the situation and
possible outcome. You can take a survey,
pick out some folks and ask them why they
are at this stage of their life. You’d notice
that a number of them would take you back
through memory lane. The rich and healthy
would tell you the choice they made that
brought about a remarkable change in their
life while the poor would tell you of the
choice they did not make that brought
about this pathetic life they are living. Our
life is the total of all the choices we’ve
made.
I have seen people that claim they don’t
make choices. That’s not possible. Your
decision to not make a decision is a decision
itself.
Actions/Behaviours
After making that choice of reading a book
weekly, losing some kg, hitting the gym,
saving some money, etc., your choices are
nothing but empty thoughts until it is
brought alive by your actions.
Your behaviour towards that choice you
have made is what matters in compound
effect. The folk that decided to read four
books per month has only decided to do it
until he starts reading those books. If you
decided to lose some weight, your decision
remains invalid until you begin to do the
necessary things that would help you lose
weight like dieting, exercising, etc. That’s
action!
Repeated Action/Habits
With time, after your actions become
repeated, it forms into a habit. For instance,
when you start saving, your mind has to be
very deliberate to save daily. Once you can
subject yourself to save daily, you would
become so used to it that it might even
become an involuntary action. For the
compound effect to work, you need to keep
doing that thing that would bring about a
change. You must be able to create routines
that would be habits beneficial to achieving
your goals. By routine, I mean something
you do each day without a miss, such that it
becomes as constant a brushing your teeth.
Hence, an unconscious action. Having
understood the component of Darren’s
formula, let’s go back to the first example I
mentioned in this piece.
If you are given two possible options of
taking 3 Million Dollars in cash or A cent
that doubles in value every day for 31 days,
what choice would you make?
Let’s analyse it together.
Assuming you go for the penny per day
payment while I go for the 3 million dollars
at once payment, by the second day, you
would have 2 cents while I would have less
than 3 million because I would be spending
from it already. By the 20th day, I would
still be enjoying my 3 million dollars except
if I’m a very lousy spender; meanwhile, you
would have acquired 5 thousand dollars. On
the 31st day, you one cent would have
grown to more than 10 million dollars while
I would be wallowing in the remnant of my
3 million dollars.
To get the point better, you’d see that we
both made a choice (the option we chose)
and we took actions. You started receiving
payments daily, I received my payment
once. It became a habit by getting used to
receiving your one cent daily. Meanwhile, I
was eating up my 3 million dollars. The
compound effect of your choice was way
more than what I collected in the first
place. Applying this example to our lives
more practically, that 3 million dollars I
collected are anything that brings instant
gratification or pleasure. It can be
overeating sugar, sleeping all day, drinking
a lot of alcohol, spending lavishly, etc.,
while the daily cent you received is the
small smart choice like going to the gym
regularly, reducing sugar intake, reading a
book weekly, taking long boring courses,
etc. The small smart choices would yield
way more than you can imagine just like the
cent yielded over 10 million dollars.
Patience in Compound Effect
Patience is the ability to wait for so long for
something desirable and to achieve the
results of Compound Effect; you must be
very patient. The one cent-daily-guy did not
get his money to transform in a day; rather,
it took him a while. This implies that most
of the actions you take would not effect
change immediately. For instance, if you
decide to lose a hundred calories daily, you
won’t see the effect of the 100 calories lost.
Instead, you would get to see the difference
much later.
Also, you cannot decide to build your
muscles today and immediately see results.
It takes time to see the result of discipline.
With the compound effect, Darren said in
his book that the most interesting part to
him is the build-up stage, that little step is
the joy whether it is towards your health,
finance, relationship, etc.,
In essence, there is no magical stunt you
can pull to make a success. The simple
answer is consistency and patience. The
best part of this is that it can be applied in
almost every part of your life. Also, it can
work in the opposite direction too. This
means that although the compounding
effect works for any situation, it can also be
used to achieve failure rather than success
and this happens when you make the
wrong choices. For instance, if you and your
friend decide to lose 100 calories daily and
your friend does not keep through to his
words but rather stopped the next day and
continued eating his junks and all while you
continued to the very end. In the end, you’d
have achieved success by growing slimmer
while your friend would have failed by
growing fatter. The same compound effect,
same choices but different actions and
habits.