How to Apply The Compound Effect

One of my favorite books is The Compound Effect by Darren Hardy, Publisher of Success magazine. It profoundly affected my thinking about how to make improvements in my life. I’m impatient by nature. If I decide I want something, I want it now. If I want to be a better speaker, I want to be world-class now. If I want to lose weight, I want to see the pounds melting off. The Compound Effect helped me make peace with the fact that change takes time. It also helped me realize that change can be dramatic if I put in place habits and apply them consistently over a long period of time. Small efforts, compounded over a long period of time, can yield amazing results.


We recognize the compound effect in personal finance. Small amounts invested consistently can compound to a large amount over time. For example, investing $500 per month for 30 years at a 10% return becomes over $1.1 million.

The Compound Effect applies to all areas of our lives. I’ll first discuss 3 principles mentioned in The Compound Effect and then 3 steps for getting started.

1. There’s no such thing as standing still The Compound Effect can apply positively or negatively, and there’s no in between. Either we actively apply positive habits that compound toward positive results, or our negative habits, or even lack of action, will compound in a negative way.

Our lives are like a down escalator. If we're standing still on a down escalator, we are going down. To go up, we have to fight against the downward motion.

2. Take personal responsibility  Before we can change or improve, we first have to take personal responsibility. Improvement is up to us and no one else. We will have setbacks and obstacles, but we can’t make excuses. We have to take full responsibility for our actions and their consequences

We can think of personal responsibility in terms of percentages. If you’re married, to what extent are you responsible for a successful marriage? 50%? What about the success of your company? It may depend on the size of the company and your role, but maybe 1% or 10 or 30%?

In The Compound Effect, Hardy argues that this kind of thinking is wrong. We need to take 100% responsibility for the success of anything we’re involved in. We need to act act like it’s completely up to us.

3. Obstacles are inevitable  As we take responsibility and move in a positive direction towards our goals, we will face obstacles.

I recently went to a speech by Chad Hymas. In 2001 he jumped on a tractor to feed the elk on his farm. He was in a hurry and ignored the tractor’s warning that the hydraulics were low. As he lifted a 2000-pound bale of hay with the front of his tractor, the hydraulics failed. The bale toppled on top of him, leaving him a quadriplegic.

He doesn’t let being a quadriplegic stop him from achieving his goals. By consistently applying daily habits, over time he has learned to function mostly on his own. He learned to speak so he could share his experiences and lessons learned, and he is now one of the most popular speakers in the world.

As we face challenges, we can continue on by sticking with our habits one day at a time. In the book Lone Survivor, the author quotes a senior officer speaking during the intense Navy SEAL training.

“First of all, I do not want you to give in to the pressure of the moment. Whenever you’re hurting bad, just hang in there. Finish the day. Then, if you’re still feeling bad, think about it long and hard before you decide to quit. Second, take it one day at a time. “Don’t let your thoughts run away with you, don’t start planning to bail out because you’re worried about the future and how much you can take. Don’t look ahead to the pain. Just get through the day, and there’s a wonderful career ahead of you.”

If we want to make positive changes, how do we get started?

First, we need to decide where we want to go To illustrate this point, Hardy quotes the exchange between Alice and the cat in Alice in Wonderland. "Would you tell me, please, which way I ought to go from here?" "That depends a good deal on where you want to get to," said the Cat. "I don’t much care where--" said Alice. "Then it doesn’t matter which way you go," said the Cat. "--so long as I get SOMEWHERE," Alice added as an explanation. "Oh, you’re sure to do that," said the Cat, "if you only walk long enough."

Where do you want to go? Do you want to lose weight or become a better speaker, spouse, parent, leader, or employee?

Second, establish habits  Once you decide where you want to go, establish habits that will get you there over time.  Jim Rohn said, “Motivation is what gets you started. Habit is what keeps you going."

If you want to lose weight, maybe your habit could be going without sugar 6 days per week while exercising 30 minutes per day. If you want to become a better speaker, join and actively participate in Toastmasters. If you want to improve your marriage, tell your spouse something you appreciate about him or her every day.

Our bodies and minds are structured for consistency over time. If you have a project that will take 20 hours, will you get a better result by working on it in one 20-hour stretch or 2 hours per day for 10 days?

Our bodies need 2000 calories per day, give or take. We can't eat 14,000 calories once per week or 700,000 calories once per year. Our bodies need to absorb the nourishment nourishment consistently over time.

I’ve applied the compound effect by setting habits in areas I want to improve in. I want to be a better writer and thinker, so I write a blog post once per week, which takes me just over an hour per week.

I want to be a better speaker and communicator, so I attend a local Toastmasters club every week and give a formal speech at least once per month, which takes about two hours per week.

I want to learn as much as I can, so I have a habit of listening to books or podcasts any time I don’t have to be focused on something else (while driving, while getting ready in the morning, etc). Over the last week I’ve listened to 3 books that are a total of 25 hours long (on double time so it only took me 12.5 hours).

The changes are frustratingly slow, even imperceptible day-to-day. Speaking has been particularly frustrating for me over the last few months as I’ve been involved in Toastmasters. Focusing on speaking has made me painfully aware of what a weak speaker I am. I wish I had started working on it earlier in my life, and I wish my efforts now were yielding quicker results. But it’s only been a few months. I know the effect over years will be dramatic and well worth the small amount of time that I’m spending on it now.

Third, stick to it.  The Compound Effect only works if applied constantly over a long period of time. Sometimes we think we can keep going on sheer willpower. However, Hardy argues that we don’t need willpower. We need “why-power.” We need a strong “why,” or reason for doing what we’re doing, that will keep us going through the obstacles and mundane routines.

Why do you want to lose weight? Is it enough to want to look better, or is it more powerful to want more energy to spend time with your kids or to avoid the early-age heart attacks that run in your family.

As we stick to it we will build momentum. Think of a merry-go-round loaded with kids. It’s hard to get started, but once it’s going it only takes a light push to keep it going. The momentum also makes it hard to stop

So go out there and build positive momentum in your life. Figure out what you want to accomplish, develop daily habits that will lead you towards your goals, and see the dramatic effects of your efforts compound over time.

Question: How has The Compound Effect helped you in your life?