5 Reasons the Compound Effect can Change Your Life- A Book Review

One of my favorite books of all time is The Compound Effect by Darren Hardy. [1] It taught me to recognize that seemingly small decisions in my life have a profound effect on the type of person I'll become. Essentially, these tiny decisions day-in and day-out will compound, having significant implications on my personal health, wealth, and relationships with others over time. This is one of those reads that will forever change your outlook on life, at least that’s what it did for me, and is highly recommended.


The Power of The Compound Effect as it Relates to:


1) Finances

One of the best examples for taking a deeper look at Mr. Hardy’s argument can be made when looking at finances. $10 to most, is a fairly small sum of money. However, if you were to make a goal of saving $10 everyday for 20 years and investing it in a no-load index mutual fund, your $10 will compound to a spectacularly large amount. In fact, if we factor in a conservative rate of return of 6%, you’d be worth more than 140k! As you can see, small actions compound over time having major effects down the line.



This theory isn’t only applicable to finances. In fact, it tends to ring true for nearly every aspect of your life. Let’s take a look at some others:


2) Weight Gain

Gaining 2 lbs a year for 20 years means your 40 year-old self is 40 lbs heavier than your 20 year-old self. That’s a drastic change. This means your lugging around 40 lbs of excess cushion which is putting unnecessary stress on the discs in your spine, hips and knee joints. This predisposes you to early onset degenerative disc disease and osteoarthritis, not to mention you are on a trajectory where you may develop type II diabetes.



Since 3500 excess calories equals one pound, if you figure out ways of reducing your annual caloric intake by 7000 calories you can avoid this excess weight. These means consuming 20 calories less per day or burning these calories off through regular exercise. Identify areas of your life where you can implement these small, but consistent, changes and trust me, your back and joints will thank you in the future.


3) Your Relationships

Similarly to nourishing your body with healthy food and regular exercise in order to sustain optimal health, you have to nourish your relationship with your significant other regularly so it too can flourish.


Make sure you are doing the little things each day to cultivate the best relationship

possible. Show each other respect, gratitude and affirmation. Express what you’re feeling both good and bad on a regular basis so things like resentment and anger don’t compound over time as well.


Remember, small breaches in your relationship are easy to repair if they are addressed on a regular basis. When they are neglected over the span of a decade you run the risk of these seemingly tiny problems morphing into relationship-ending catastrophes.


4) Mastering any Skill

If you are interested in mastering a new skill, it's important to recognize that taking very small steps toward your goals on a consistent basis is integral for reaching this level of mastery. This was explained fantastically well in Malcolm Gladwell's, Outliers, which shows that it typically takes 10,000 hours of practice to develop mastery in most fields. [2]

If this is the case, you can set a plan in motion for learning to, let’s say, master playing the piano over a span of 20 years. By keeping our 10,000 hour rule in mind, this means you would have to play 500 hours per year over this span of time. Breaking it down further, this is just under 1.5 hours of practice time per day and is certainly an achievable feat. Once again, small, but consistent steps, can have profound effects in your life taking you to new levels of mastery that may not have seemed possible 2 decades prior.


5) Developing a Growth-Minded, Health Conscious Network

They say you’re the average of the 5 people you hang out with most. Now I want you to think about your network and see what relationships you are investing most of your time in. Are the values of those individuals aligned with your own? Are they making good health choices or ones that are self-destructive? Do these relationships nourish you and make you a better person?



I’m not saying that you need to overhaul your network and stop spending time with family or friends, but it’s important to recognize that these relationships will impact your life dramatically and how you make decisions on a regular basis. For instance, if you surround yourself with active, health-conscious people, you will likely become more health conscious as well. Conversely, if you surround yourself with people that have destructive habits like overindulging in alcohol, it is likely that you too will participate in this behavior.


It’s important to notice that your network will influence your behavior in a manner that will also compound with time. Therefore, it’s important to surround yourself with people that bring you up, have similar values, and contribute to your life in a positive manner. If not, you can take small steps toward developing new relationships that can best serve both parties.


The Compound Effect Will Stand the Test of Time


I believe the teachings in this book will ring true for many years to come. Recognizing the dramatic effects that seemingly small life decisions can have on your life can certainly be used to your advantage. Through careful planning and preparation you will be well-equipped to set yourself on a trajectory toward becoming the best "you" possible by taking small, consistent steps in a positive direction.


References:


  1. Hardy, D. (2011). The Compound Effect. Vanguard Press.

  2. Gladwell, M. (2008). Outliers: The story of success. Little, Brown.


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