The Compound Effect by Darren Hardy The Process Hacker

Table of Contents
Introduction .................................................................................................................................... 3
Chapter 1 – The Compound Effect in Action ..................................................................................... 3
The Magic Penny.................................................................................................................................................. 3
Three Friends ....................................................................................................................................................... 4
Action Steps: Put the Compound Effect to Work for You .................................................................................... 4
Chapter 2 – Choices ......................................................................................................................... 4
Taking Responsibility and Getting Lucky.............................................................................................................. 4
Your Scorecard: Your Secret Weapon.................................................................................................................. 5
Action Steps: Put the Compound Effect to Work for You .................................................................................... 5
Chapter 3 – Habits ........................................................................................................................... 5
Avoid Instant Gratification ................................................................................................................................... 6
Find Your Why-Power .......................................................................................................................................... 6
Goals .................................................................................................................................................................... 6
Breaking Bad Habits ............................................................................................................................................. 7
Building Bad Habits .............................................................................................................................................. 7
Action Steps: Put the Compound Effect to Work for You .................................................................................... 7
Chapter 4 – Momentum .................................................................................................................. 8
Routines ............................................................................................................................................................... 8
Morning Routine: Rise & Shine ............................................................................................................................ 8
Evening Routine: Sweet Dreams .......................................................................................................................... 9
Rhythms ............................................................................................................................................................... 9
The Power of Consistency.................................................................................................................................... 9
Action Steps: Put the Compound Effect to Work for You .................................................................................. 10
Chapter 5 – Influences ....................................................................................................................10
I. Input: Garbage In, Garbage Out...................................................................................................................... 10
II. Associations: Who’s Influencing You? ........................................................................................................... 11
III. Environment: Changing Your View Changes Your Perspective ..................................................................... 11
Action Steps: Put the Compound Effect to Work for You .................................................................................. 12
Chapter 6 – Acceleration ................................................................................................................12
Moments of Truth.............................................................................................................................................. 12
Multiplying Your Results .................................................................................................................................... 12
Actions Steps: Put the Compound Effect to Work for You ................................................................................ 12
Conclusion and Next Steps .............................................................................................................13

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The Compound Effect by Darren Hardy The Process Hacker

Introduction
In his book, The Compound Effect, Darren Hardy shows you how to harness the power of The
Compound Effect to create the success and the extraordinary life you want. The Compound
Effect is the strategy of being consistent with small, smart choices over time that will produce
significant results. This simple, fundamental principle will help you multiply your success, track
your progress, and accomplish your goals.

“Earning success is hard. The process is laborious, tedious, sometimes even boring. Becoming
wealthy, influential, and world-class in your field is slow and arduous.” However, you already
have the knowledge to succeed and don’t need any new information. Instead, you have “to
create new behaviors and habits that are oriented away from sabotage and toward success. For
more, Darren Hardy provides additional resources at The Compound Effect website.

Chapter 1 – The Compound Effect in Action

Many struggle to achieve success, because people seek instant gratification and cannot sustain
their results. In this chapter of the Compound Effect, Darren Hardy shows you how he is living
proof of the principle.

During childhood, the principle stemmed from his father’s core philosophy: “It doesn’t matter
how smart you are or aren’t, you need to make up in hard work what you lack in experience,
skill, intelligence, or innate ability. If your competitor is smarter, more talented, or experienced,
you just need to work three or four times as hard. You can still beat them!”

With enough time, Darren Hardy knows he can beat anyone despite not being the best,
smartest, or fastest. It is due to harnessing the power of the Compound Effect by developing
positive habits that he constantly applies to be successful in any arena:

The Compound Effect – the principle of reaping massive rewards from consistently making
small, smart choices over a long period of time

In the moment, the choices feel insignificant but will help you improve your health, wealth, and
relationships over the long term. Darren Harry captures the Compound Effect in this formula:

Small, Smart Choices + Consistency + Time = Radical Difference

The Magic Penny

Consistency is powerful over time. For example, suppose you had to choose between either (1)
$3 million in cash now or (2) a single penny that doubles in value daily for a month. In 31 days,
the first option would result in about $10.7 million. However, in the second option, you don’t
get close to $3 million until day 29 with $2.7 million. Then, you rapidly jump ahead in the next
two days.

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The Compound Effect by Darren Hardy The Process Hacker

Three Friends
Another example of three childhood friends illustrates the differences in results between those
who employed the Compound Effect and those who didn’t:

• Larry: He maintains the status quo and occasionally complains about nothing changing.
• Scott: He seeks self-improvement and implements small, positive changes into his life.
• Brad: He makes some poor diet and spending choices satisfying short-term gratification.

Scott uses the compound effect and becomes “an overnight success” while Larry still doesn’t
change. In Brad’s case, his bad habits have compounded negatively to cause growing issues in
his work, marriage, and health.

The Compound Effect only pays off with consistent work, discipline, and habits, so don’t expect
instant results and overnight successes. “Your only path to success is through a continuum of
mundane, unsexy, unexciting, and sometimes difficult daily disciplines compounded over time.”

Action Steps: Put the Compound Effect to Work for You

• List your excuses and decide to overcome them with hard work and self-development.
• Become Scott by taking small, positive actions to improve your life for the better
• Avoid being Brad by listing negative, poor behaviors that you can stop doing.
• List areas, skills, and outcomes in which you have had success and consider if you have
been taking these things for granted.

Chapter 2 – Choices
In this chapter of the Compound Effect, Darren Hardy helps you gain awareness and make
choices based on your goals and values. Recognize that the results in your life stem from
choices you made earlier. Each choice initiates a behavior that, over time, evolves into a habit.
Choosing poorly or not choosing can force you to make tougher decisions later.

Taking Responsibility and Getting Lucky

Many common, minute, and trivial choices can be destructive. We make choices unconsciously,
so it is difficult to consciously change our negative behaviors into positive habits. Thus, you
need to take extreme ownership for every action, lack of action, and reaction. Keeping that in
mind, you will get “lucky” through the following formula:

The (Complete) Formula for Getting Lucky: Luck is a result of the following components:
• Preparation – the practice and improvement of your skills, knowledge, expertise,
relationships, and resources, allowing you to take advantage of great opportunities
• Attitude – your belief or mindset of reframing all situations, conversations, and
circumstances as positive and fortuitous
• Opportunity – the natural occurrence of the luck that you create that comes quickly and
unexpectedly
• Action – what you are doing about the opportunities that come your way
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The Compound Effect by Darren Hardy The Process Hacker

From now on, you must be the master of your life by assuming responsibility and taking control.
Many others before you have succeeded in the face of great weaknesses and obstacles. Thus,
you should not complain or make excuses about the unfortunate circumstances in your life.

Your Scorecard: Your Secret Weapon

You need to measure something to manage or improve it. To take control of your choices, you
should track your behavior and gain awareness of your choices through the following steps:

1. Choose an area of your life where you want to succeed the most: “I am going to start
tracking _______________ on [date/month/year].”
2. Track every action in this one area for the next three weeks using a notebook or phone.
Three weeks is a great benchmark regarding habit formation.
3. Write every observation and behavior down every day, no matter what.

Tracking allows you to gain moment-to-moment awareness regarding the small things you are
doing right and wrong. In the beginning, act immediately and focus on one habit that you
believe will move you toward your goals. Then, once you start benefiting from the Compound
Effect, expand tracking to other areas in your life.

Action Steps: Put the Compound Effect to Work for You

• Think about a challenging life area, person, or circumstance and journal about what you
are grateful for.
• Contemplate parts of your life in which you are not taking full responsibility.
o List three ways in which you took the wrong action.
o List three ways in which you should have taken action.
o List three ways in which you had an adverse reaction.
o List three ways to take back responsibility for your life outcomes.
• Track at least one life behavior that you want to change and improve.

Chapter 3 – Habits
In this chapter of the Compound Effect, Darren Hardy helps put your choices to work with
positive behaviors that, repeated over time, build good habits. Aristotle wrote, “We are what
we repeatedly do.” Merriam-Webster defines a habit as follows:

Habit – “an acquired mode of behavior that has become nearly or completely involuntary”

We are habitual beings, as research shows that “95 percent of everything we feel, think, do,
and achieve is a result of a learned habit.” We are born with instincts, but with enough
repetition, good or bad behaviors become automated unconsciously in our habits. The most
successful people consciously form positive habits to their benefit to be more knowledgeable,
capable, and prepared.

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The Compound Effect by Darren Hardy The Process Hacker

Avoid Instant Gratification

The primary issue with bad habits is providing instant gratification that typically outweighs your
ability to reason with the negative long-term consequences. Instead, Darren Hardy tells you to
become aware of the negative habits that compound into significant problems. Breaking bad
habits is difficult, and willpower is not enough.

Find Your Why-Power

Instead, use why-power to connect your actions and goals to your purpose, values, and dreams.
In Start With Why, Simon Sinek, your why will provide the meaning and motivation or
emotional rocket fuel to take significant action in your life and work.

“When the reason is big enough, you will be willing to perform almost any how.” Your why
needs to be meaningful internally beyond any external financial, social, and material goals. The
access point to your why-power is through your core values:

Core Values – define both who you are and what you stand for

Your core values can help you filter all of life’s demands, requests, and temptations, making
sure they’re leading you toward your intended destination. Defining your core values also helps
make decision-making simpler and more efficient. When faced with a choice, ask yourself,
“Does this align with my core values?” If it does, do it. If not, don’t, and don’t look back.

People can be fueled by hate and anger just as much as love and happiness. Sometimes, an
enemy, negative emotion, or bad experience can motivate you to succeed. Enemies and bad
moments can give us the reason to confront adversity with courage.

Goals
Paul J. Meyer, a mentor of Darren Harden, has said, “If you are not making the progress that
you would like to make and are capable of making, it is simply because your goals are not
clearly defined.” The most successful people establish a clear, compelling vision for why before
determining how. After, they define and write down their goals to work toward the vision.

Goals are essential, and if you want to have a full life, you must master how to set and achieve
goals effectively. First, consider all aspects of your life for setting SMART goals: career, finances,
health, relationships, etc. Then, you should ask, “Who do I need to become?” Jim Rohn has
said, “If you want to have more, you have to become more. Success is not something you
pursue. … Success is something you attract by the person you become.”

Achieving goals requires the following formula:

You à Choice (decision) + Behavior (Action) + Habit (repeated action) + Compounded (time) =
Goals

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The Compound Effect by Darren Hardy The Process Hacker

Breaking Bad Habits

These are five strategies for breaking bad habits:

1. Identify Your Triggers: With your list of bad habits, identify the who, what, where, and
when of the triggers.
2. Clean House: Remove everything in your environment that enables bad habits, even if
your family thinks it is unfair.
3. Swap It: Attempt to replace, delete, or swap your bad habits with less harmful or
healthier alternatives.
4. Ease In: Take smaller steps into unraveling your deep-rooted habits over time.
5. Or Jump In: Or really commit and change many bad habits at once to transform your
lifestyle.

Run a Vice Check: Every three months, pick a vice and abstain from it for thirty days to prove to
yourself that you are still in charge of the bad habit. If you find it tough to abstain for the
month, it may be a bad habit that you should remove from your life.

Building Bad Habits

These are six techniques for building good habits:

1. Set Yourself Up to Succeed: Create your environment and lifestyle that allows your new
habits to thrive.
2. Think Addition, Not Subtraction: Choose positive actions to “add-in” to enrich and
replace your negative actions.
3. Go for a Public Display of Accountability (PDA): Inform your friends, family, and
coworkers about your habits to be held accountable.
4. Find a Success Buddy: Seek out an accountability partner to motivate each other and
work on your habits together.
5. Competition and Camaraderie: Organize a contest tracking a particular habit amongst
friends, family, or work colleagues.
6. Celebrate: When you complete your habits for a week, month, or quarter, you should
enjoy the victory and reward yourself.

Building good habits and breaking bad habits requires patience. Research shows that it requires
attention and consistency over time to form neural pathways to engrain the new positive habit.
Habits do not form overnight, and setbacks do occur, so just keep trying. For more on habits,
check out the books, Atomic Habits (book summary) or The Power of Habit (book summary).

Action Steps: Put the Compound Effect to Work for You

• Identify the three best habits that help your most important goal.
• Identify the three worst habits that don’t help your most important goal.
• Identify the three new habits to develop to align you to your most important goal.
• Determine the why behind your goals to make them concise, compelling, and inspiring.

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The Compound Effect by Darren Hardy The Process Hacker

Chapter 4 – Momentum
In this chapter of the Compound Effect, Darren Hardy helps gain momentum and break away
from the average person. Everything you have learned in the first three chapters gets multiplied
with the momentum. Let’s begin with Newton’s First Law:

Newton’s First Law (Law of Inertia): “Objects at rest tend to stay at rest unless acted on by an
outside force. Objects in motion tend to stay in motion unless something stops their
momentum.”

It can be tough to gain momentum and adapt to change. You must take small actions with slow
progress. Eventually, your newly formed habits become established, momentum builds, and
your results compound. When you get momentum, it will be difficult to stop, which is indicative
of why some people are really successful.

Routines
To capture the momentum well, you can create a system in the form of a routine:

Routine – “something you do every day without fail”

You should incorporate your new mindset and habits into daily, weekly, and monthly routines
to have powerful, everlasting change. Routines can encapsulate healthy behaviors in a
sequence that is automatic and efficient. Routines that are predictable and followed will allow
you to achieve the most significant goals.

To create an effective routine, you must determine what healthy behaviors and habits to
implement. For example, the most successful people bookend their days with morning and
evening routines that support their performance.

Morning Routine: Rise & Shine

In the Compound Effect, Darren Hardy shares his morning routine, which grounds him in
essential habits and prepares him for the day:

• Wakes up at 5:00/5:30 AM and hits snooze to have 8 minutes for:

o Expresses gratitude for what he has and tunes his mind to think abundantly;
o Send love to someone in his life and wish them the best; and
o Visualize his most important goal and decides three daily actions to work on it.
• Gets out of bed and makes coffee.
o Stretches for about 10 minutes.
• Reads something positive and instructional for about 30 minutes.
• Works with focus and no distractions on the most important project for an hour.
• Calibrates his day for 15 minutes.
o Reads his five-year, annual, quarterly, monthly, and weekly goals.
o Reviews his top three Most Valuable Priorities (MVPs) for the day.

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The Compound Effect by Darren Hardy The Process Hacker

o Asks If I only did three things today, what are the actions that will produce the
greatest results in moving me closer to my big goals?
• Opens email only to assign and delegate tasks.
• Gets back to work on MVPs.

Evening Routine: Sweet Dreams

Also, Darren Hardy shares his evening routine, which wraps the day and prepares him for sleep:

• “Cashes out” of daily performance by asking:

o Referencing the daily plan, what tasks got accomplished?
o What other tasks need to be added based on what happened during the day?
o What tasks are not necessary anymore?
• Logs new ideas, epiphanies, or insights into his journal.
• Reads about ten pages of an inspirational book before bed.

If you keep taking the same action, you will eventually get bored and plateau. Thus, you need to
change it up and challenge yourself to maintain momentum. For example, you can try new
activities or hobbies or change your routines to generate different results.

Rhythms
After creating a routine with your daily behaviors and habits, you want it to occur in a rhythm:

Rhythm – a strong, regular repeated pattern of movement or sound

This rhythm can only be achieved through planning, which then generates momentum. Then,
you can have your disciplines work together in harmony on a weekly, monthly, quarterly, and
annual basis. Once scheduled, you don’t have to think and simply execute your plan. You can
track your rhythm with the Rhythm Register:

Rhythm Register – tracks your daily habits to help you make progress toward your goals;
download a copy here

When starting a new habit, we tend to overdo our actions in the short term due to excitement
or wanting to succeed. As a result, we tend to think of rhythms in the next week, month, or
quarter. Instead, we should think of success for the long term and set up a sustainable rhythm.
The Compound Effect is the positive results you want to experience in your life—will be the
result of smart choices (and actions) repeated consistently over time.”

The Power of Consistency

Consistency is crucial for success. Momentum is lost quickly due to inconsistency, as it requires
time and energy to repeated start and stop. You may fall short of your goals due to running out
of personal resources. Maintaining consistency will allow you to progress toward your goals.

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The Compound Effect by Darren Hardy The Process Hacker

Action Steps: Put the Compound Effect to Work for You

• Create morning and evening routines to ground and prepare for your life and work.
• Write down three life areas in which you lack consistency and how it has hurt your
progress. Then, commit to staying consistent in the future.
• List key habits on your Rhythm Register critical for making progress toward your goals.

Chapter 5 – Influences
In this chapter of the Compound Effect, Darren Hardy “discusses the many influences that
(mostly unknowingly) can help or hinder your ability to succeed.” Although these influences are
prevalent and influential, you should manage them to your advantage.

I. Input: Garbage In, Garbage Out

If you want to perform at a peak level, you need to consume high-quality nutrients and
information for your body and mind, respectively. However, it is much harder to protect your
mind from terrible information, so ask yourself:

• “What are you thinking about?”

• “What is influencing and directing your thoughts?”

The answer is “whatever you’re allowing yourself to hear and see.” Your mind is like an empty
glass that the world will inevitably fill it with dirty water:

• Dirty Water – the negative, unproductive, and unnecessary information that consists of
sensational news, mind-numbing sitcoms, dramatic politics, etc.

Instead, you should be conscious of what you intake and flush it out with clear water:

• Clear Water – the positive, inspirational, and supportive information that consists of
personal growth and development, skill development, stories of successful people, etc.

Here are two methods to flush using clear water:

1. Stand Guard: The media can take your mind hostage and hinder your creativity,
productivity, and focus. Therefore, put yourself on a media diet by avoiding the news
and filtering the information that will help you in your personal and professional life.
2. Enroll in a Drive-Time U: Your car is a great place to learn while you drive. You can “gain
knowledge equivalent to two semesters of an advanced college degree—every year.”
Thus, you should download your phone with informational audiobooks and podcasts.

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The Compound Effect by Darren Hardy The Process Hacker

II. Associations: Who’s Influencing You?

Research shows that the people that you regularly associate with correlate to about 95 percent
of whether you will succeed or fail in life. First, you should avoid or limit the following
associations:

• Dissociations – these people are negative, bring you down, and refuse to grow, so you
should completely break from them in your life
• Limited Associations – these people require a time limit, so determine how much time
you can “afford” to be influenced by them

Instead, you should surround yourself with people who represent and positively influence the
life you want. This third group is those with who you should expand your association:

• Expanded Associations – these people “have positive qualities in the areas of life where
you want to improve;” and improve your relationships by asking yourself:

o “Who has the type of relationship I want?

o How can I spend (more) time with that person?
o Who can I meet who can positively influence me?”

There are three specific expanded associations that you should seek:

• Peak-Performance Partner – “someone as equally committed to study and personal

growth as you” that you trust and gives brutally honest feedback; ask each other:
o “How do I show up to you?
o What do you think my strengths are?
o In what areas do you think I can improve?
o Where do you think I sabotage myself?
o What’s one thing I can stop doing that would benefit me the most?
o What’s the one thing I should start doing?”
• Mentorship – a relationship in which the individual with more experience, knowledge,
and connections teaches and guides a more junior person; one should be willing to
teach and be taught
• Personal Board of Advisors – your advisory group of “people who have achieved the
success you want to create in your own life” to reach out to “solicit ideas, run thoughts
by them, and ask for feedback and input

III. Environment: Changing Your View Changes Your Perspective

To be successful, your environment should be positive and work to support your growth and
goals. Further, you should declutter your environment of both physical and mental clutter so
you can be productive. When shaping your environment and every area of your life, “you will
get in life what you accept and expect you are worthy of.”

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The Compound Effect by Darren Hardy The Process Hacker

Action Steps: Put the Compound Effect to Work for You

• Determine what media and information negatively impact your life and replace them
with positive information content.
• Determine the people that you need to dissociate from, limit your association, and
expand your association.
• Choose a peak-performance partner to hold each other accountable.
• Determine the three areas of your life that you want to improve and find mentors to
help you in these areas.

Chapter 6 – Acceleration
In this chapter of the Compound Effect, Darren Hardy shows you how to take everyone you
have learned and accelerate your result. Also, you will face moments of truth and can use the
Compound Effect to break through to achieve greater success.

Moments of Truth
Lance Armstrong has written, “There is a point in every race when a rider encounters his real
opponent and understands that it’s himself.” He refers to the “moments of truth” or obstacles
that high performers face. However, these obstacles are typically mental and should be seen as
opportunities. So when you hit the wall, Jim Rohn has said, “Don’t wish it were easier; wish you
were better.”

Multiplying Your Results

Real personal growth occurs from how you overcome obstacles or expectations by:

• Overcoming Obstacles Well: Identify as being the toughest competitor and “go above
and beyond” when you encounter challenges or hit the wall.
• Beating the Expectation: When you do “enough” or reach an expected level of
accomplishment, raise your standards and exceed what is expected.
• Doing the Unexpected: Determine what is popular or average and take different, more
powerful actions as “common things deliver common results.”

In your own life, look for extraordinary opportunities to do better and multiply your results.
Rise to the occasion to “go a little further, push yourself a little harder, last a little longer,
prepare a little better, and deliver a little bit more.”

Actions Steps: Put the Compound Effect to Work for You

• Identify moments when you encounter obstacles and strategize how you will overcome
them with tenacity.
• Identify three significant areas in your life where you can beat the expectations and
strategize how you can create extraordinary outcomes.
• Identify three significant areas in your life where you can do the unexpected and
strategize how you will differentiate yourself.

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The Compound Effect by Darren Hardy The Process Hacker

Conclusion and Next Steps

“Learning without execution is useless. Motivation without action leads to self-delusion.” In his
book, Darren Hardy presents “The Compound Effect as a tool that, when combined with
consistent, positive action, will make a real and lasting difference in your life.”

Darren Hardy poses these simple questions from pondering about your life five years ago:

• “Are you now where you’d thought you’d be five years later?”
• Have you built great habits and developed the skills you wanted?
• Have you broken the bad habits that you committed to getting rid of?
• Are you in the physical health and shape you desired to be in?
• Do you have many loving relationships and an excellent partner?
• Are you living your ideal lifestyle with the income and freedom you wanted?

If not, you should ask why? Darren Hardy says that it starts with a simple choice to change your
life and incorporate The Compound Effect. For more, get your own copy of the book here or
check out the additional resources at the book’s website.

If you have any further questions or need additional help, feel free to send me an email. Also, if
you want more Process Hacker content, check out our blog posts on Productivity, Habits, and
Resources.

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