The Compound Effect Summary [Key Insights & Analysis]

The Compound Effect by Darren Hardy is probably my favorite book that I have read so far this year because of how simple and actionable the advice is. The advice in this book doesn’t suggest that you make tons of radical changes to your life at once but rather it suggests that you simply audit your actions to identify which behaviors and habits might not be serving you. Then the idea is to slowly introduce more positive habits that will lead you in the direction of your goals. The Compound Effect summary that you are about to read, dives into the nitty-gritty details and provides you with a roadmap for how you can implement this in your daily life. So if getting to the core message of the book in a fraction of the time sounds good to you then read on my friend!


Important Disclaimer

As with any of the books that I review, I strongly suggest that you go off and buy your own physical copy of The Compound Effect so that you can highlight it, mark it up, and make it your own. After all, that is how you retain the learnings and insights. Plus you can start accumulating an epic library that you can always go back and refer to later in your life, have as a talking piece for guests, lend resources to your loved ones, and much more…

This is what all of my books look like…

the compound effect summary page example

With that being said, let’s jump into it!


Special Message From Anthony Robbins

Value is dropped right away from the very first page in The Compound Effect.

As you might know already, I am a huge fan of Anthony Robbins and recently attended his Date With Destiny event in Palm Beach, Florida.

He is truly the world leader of self-development and that is because he focuses on what actions you can take to get real results.

He starts by mentioning that he and Darren started to take control of their lives from an early age by seeking out answers from people who already had the success they wanted in all aspects of their lives (the Compound Effect summary that you are reading will refer back to this topic a little later). The importance of seeking out mentors in all aspects of your life is a huge focal point in this book. Anthony Robbins then explains that the best way to get what you want is by giving that same thing to other people. So if you want more love, then start by giving more love to other people. If you want more success, then start by helping other people succeed.

The rest of the special message simply introduces the central theme of the book; that those little everyday decisions can either push you toward the life of your dreams or the life you most fear.


The Compound Effect Summary: Introduction

My big takeaway from the intro was that becoming wealthy and world-class in your respective field (whether that is business, relationships, or health) is a slow and tedious process. There are no “magic bullets” despite what these millennial “experts” want you to believe. I have heard this again and again, and the introduction simply reinforced this notion.


The Compound Effect Summary: Chapter 1

This chapter opens focusing on the reality that you can outperform people who are smarter and more talented than you by simply implementing and being consistent with the positive habits that you introduce into your life. It doesn’t matter how smart you are or aren’t, what you might lack in skill, intelligence or ability must be made up for in hard work and consistency. And injecting positive habits into your life will ensure you outperform other individuals who might be “more talented” than you on paper.

One of my favorite parts of this chapter is when Darren Hardy introduces the “be the guys who says ‘no'” philosophy, which he got from his father Jerry Hardy. Saying “yes” to everything and going along with what everyone else does is a one-way ticket to an average life. Average people make the same decisions, so if you want to be average then start saying “yes” to everything. If you want to be exceptional then start being selective. This applies to everything from who you spend time with, to what you do, etc…

In the rest of this chapter, the concept of The Compound Effect is introduced through the following formula;

Small, Smart Choices + Consistency + Time = RADICAL DIFFERENCE

This applies to saving money (a penny saved each day compounds into millions of dollars in a very short amount of time) but also to every other area of your life as well, which we will get into in the coming chapters.

Key Insight: Finding fault in others rather than looking internally to discover your own shortcomings and how those might be causing your poor results is the difference between succeeding and failing.

One potential challenge of The Compound Effect is that you will need to continue to apply these principles and habits on a regular basis for a while before you begin to see the payoff.

When people finally achieve success, they often become complacent and forget the behaviors and habits that got them to that level, to begin with. A good example of this is the children of the wealthy or someone who has amassed a ton of wealth and then slacks off.

Actionable Insights:

  • Write out what kind of excuses you might be using as an excuse for your current performance in life. Decide to make up for those in hard work and consistency.
  • Write out a list of 6 small things you can do to take your life in a positive direction (having a green juice every morning, going for a walk while listening to an audiotape once per day)
  • Now write out 6 small things you can STOP doing that might be hindering your progress (having one coffee in the morning instead of two, only having happy hour drinks 1 day a week instead of 3, etc…)
  • List out the areas on which you have been most successful in the past and decide if you have been taking them for granted lately (for me this was my ability to make marketing funnels and informational products that I have been neglecting).


Chapter 2: Choices

Every small choice you make becomes a behavior, which then becomes a habit.

Ask yourself what choices you are making daily that you didn’t actively choose to make. In other words, which choices are you making on autopilot that may not be serving you.

The unconscious decisions that we make are of the most concern.


The Relationship Appreciation Journal

Every day for a year log one thing that you love about your significant other. Doing this will force you to consciously look for the good in the other person. By focusing on the good (and not the negative) you begin to see your partner in a different light.

Relationships are not 50/50. Only when you are ready to take 100% responsibility for making the relationship work will it work.


The Formula For Getting Lucky

Preparation (personal growth) + Attitude (beliefs/mindset) + Opportunity (a good thing coming your way) + Action (doing something about it) = Luck

Preparation: You can be prepared by constantly upping your game and investing in yourself. This includes improving your skills, knowledge, relationships, etc… So when opportunities arise you are ready to take advantage of them.

Attitude: Based on your mental state, you can see situations as opportunistic and beneficial or you can see them as oppressive. The distinction simply depends on your mental attitude.

Opportunity: These are unforced opportunities that arise in your everyday life. Trust me, you have these in your life right now but you might not have been able to recognize them because of your preparation or attitude.

Action: You need to act on the opportunity (that’s a no-brainer).

In bad business dealings, relationships, whatever, losses are your own fault.

A partner screwed you over? Your fault for not doing enough due diligence on their personality prior to engaging in a partnership with them. Ignoring red flags is a personal choice that you make.


Tracking Your Choices

The first step to taking control of your life is by tracking what you are doing right now. Until you do an audit of your current behaviors and choices, you cannot enact change.

Step #1: Pick an area in your life you want to improve

This can be wanting to improve your finances, relationships, etc… But pick one area and get a good picture of where you are right now. Next, picture where you want to be. What does your future self look like when you have achieved this?

Step #2: Track every single choice you make in this area

Get a journal that is solely dedicated to tracking these choices. This will force you to become conscious of your decisions.

If you want to track your finances, then every time you make a purchase, you must write it down in your journal. Do this for three entire weeks to build the habit.

Here is what my tracking journal looks like…

the compound effect summary - tracking journal

I also scribble a bunch of other notes down on the page below my expenses so don’t mind those!

Again, I can’t stress the importance of buying a physical copy of The Compound Effect for yourself so you can mark it up and make it your own. Summaries will only take you so far.

Keep in mind, every time you spend a dollar today it’s like spending 5 dollars in 20 years. So a $4/day coffee habit ends up costing over $50,000 in 20 years.

Time is a huge factor in The Compound Effect. Every day you wait to make changes results in a massive amount of squandered gains down the road.

Key Insight: Your current life situation is the result of your moment-to-moment choices.

Actionable Insights:

  • Which area do you struggle with the most in life? Write down what you grateful for in these situations. Force yourself to see the good!
  • Where are you not taking 100% responsibility in your life?
    • What are three things you have done in the past that messed things up?
    • What are three things you should have done but didn’t?
    • What are three things you can do right now to take responsibility?
  • Start tracking a behavior now (like in my journal image above)


Chapter 3: Habits

Key quote: “We are what we repeatedly do” – Aristotle

Key insight: A daily routine built on good habits is the difference that separates the most successful people from average people. It’s not rocket science.

The Instant Gratification Trap

Most of us have become enslaved to bad habits because our need for instant gratification turns us into non-thinking zombies.

The issue is that the payoff from instant gratification normally far outweighs the long-term consequences of your actions. In order to counteract this, you need to find your “why power” because your choices are only meaningful when you link them to your deepest desires and motivations. You must know WHY you want something otherwise you will give up. To do this, you must look beyond money and financial motivation.

You must determine what your core values are in order to harness your “why power”. When your actions do not align with your values, you will live an unhappy and frustrated life.

People can be motivated by something they want or don’t want. The fear of becoming that which you truly despise can be a very powerful motivator.

How Goal Setting Actually Works

In order to achieve your goals, you need to have them vividly mapped out and clearly defined. The most successful people in the world all have mapped out their goals and visions in excruciating detail. As humans, we only experience what we actively look for. Humans operate with a goal-striving mechanism (something I discuss in my Psycho-Cybernetics Summary). So when you define your goals in vivid detail, you give your brain something to look for and focus on.

Make sure to consider all aspects of your life (not just business and finance). This should include all fundamental areas to human happiness like; health and well-being, spirituality, love and relationships, and lifestyle.

It’s crucial that you ask yourself the question, “Who do I need to become?”.

It’s not enough to pursue the things you want. You need to become the person who attracts those things into their life.

My favorite part of this book is in this section where Darren Hardy describes what he did to find his dream woman. He made a list of all of the qualities, personality traits, and physical traits he wanted in a woman. And then he asked himself the question, “What kind of man would a woman like this be attracted to?”. And he then self-analyzed where he measured up and where he fell short. You have to get clear on who you need to become to achieve what it is that you most desire.

Identifying Your Behaviors

The life formula: Choice (decision) + Behavior (action) + Habit (repeated action) + Compounded (time) = Goals

It’s imperative that you identify the behaviors that will help you accomplish your goals.

Actionable Insights:

  • Identify your top 3 goals and make a list of the bad habits that might be sabotaging your progress
  • Identify your triggers for these bad habits
    • Example: If you only drink when you hang around certain people then stop or limit the time that you spend around them
  • Remove all temptation
    • Example: If you want to drop drinking coffee then throw your coffee pot out the window (not actually though, the garbage will do just fine for disposal).
  • Replace the old, unproductive habits with new habits
    • Example: Instead of drinking alcohol during happy hour, replace it with sparkling water with fresh lime to have the same sensation.
  • Replace habits gradually
    • You don’t need to quit coffee cold turkey (although you can). But it might be easier to slowly switch off of it bu first switching to decaf.
  • Sometimes it’s helpful to radically change everything at once


Chapter 4: Momentum

Momentum is a very real thing and can work for you or against you (if you allow it to). I am not going to go into the physics of momentum and the power a moving car has from a stationary car because I think you probably already understand that basic concept.

You need to create new routines that support your habits and choices to allow momentum to work in your favor. A routine should be built on good daily habits and combined with daily discipline.

Actionable Insights:

  • End your evenings with journaling a reflection of the day that just passed (What insights did you gain? What went well? What needs to be worked on tomorrow? I also include any random thoughts, feelings, or memories that I want to record/focus on from that day)
  • Before I fall asleep I close my eyes and imagine a purple light shooting out from my heart and from in between my eyes (third eye I think they call it?) into the universe. I project my desires, visualize who I want to become, send love and support to the people I want to see thrive, and think of all the things that I am grateful for. This takes all of 60 seconds and any worry from the day I might have had instantly evaporates and I sleep like a baby.
  • My morning routine needs some work if I am being completely honest with you. I typically rush off and get the workday started asap. But I am working on starting the day the same way I end it – with gratitude and appreciation.
    • Outline the three big tasks that you want to get done for the day
    • Review your weekly, monthly and yearly goals to ensure you are staying on track

You need to develop routines that keep you running in the direction of your goals like a well-oiled machine. The more you stop and start, the longer it will take to get to the end destination.


Chapter 5: Influences

External focuses have a massive impact on our behavior – both good and bad. There are three types of influences that affect us:

  1. Input (what you feed your mind)
  2. Associations (who you spend your time with)
  3. Environment (your physical surroundings)


Input: Control What Goes In

If you are spending hours a day watching the news or scrolling through Instagram, then you really aren’t in control of what you are feeding your mind. These media outlets are experts at feeding your mind extreme content to get a reaction out of you. When you consume this type of media, are you feeding your mind with messages of success, joy, and happiness? Probably not.

You should control your media consumption. Here are some examples of how to do that:

  • Turn off the radio during your car drives and put on an audiotape about a topic you want to learn more about.
  • Unfollow all of those Instagram accounts that don’t add value to your life (or even better, delete it altogether)
  • Don’t buy cable TV


Associations: Who is influencing you?

Key quote: You are the average of the 5 people you hang around most

The behaviors and habits of the people you admire will start to work their way into your everyday routine if you spend enough time around those people. The same will happen if you hang around people who have bad habits.

Actionable Insights:

  • Write down the five people that you spend the most time with
    • What do their average relationship, health, and bank balance look like?
    • Decide who you need to spend less time with and who you need to spend more time with

Find someone you admire and ask them to be your performance partner. Every Friday have a 30-minute call where you go over each other’s wins, “aha” moments, insights, and challenges from the week. Find someone who can be brutally honest with you and give you the feedback that you need to improve. No sugarcoating.

Additionally, you should be investing in mentorship (you don’t necessarily need to pay in dollars for this). People love helping and giving back. You just need to ask and show that you are committed to executing on their advice and won’t waste their time.


Environment: Shifting Perspectives

Focus on what you can achieve today and nothing else. Constantly thinking about unkept promises, pending commitments, and unfinished tasks will stall your momentum. Focus on what you can control now.

Take control of your physical surroundings. Being in the hotel/residence lobby of the wealthiest building in your city and working from there, you are going to feel motivated by your surroundings. As opposed to spending your time in a basement in an uninspiring environment.

Go to showings of your dream house even if you can’t afford it.

Chapter 6: Acceleration

This chapter is fairly straight forward. You can compound your results by going above and beyond. For example; if you want to make more money your results will be even more significant in 20 years time if you invest two dollars per day as opposed to one. If you do 15 reps instead of 10 at the gym you will improve faster than other people. Always try and go above and beyond what people expect of you.

Actionable Insights:

  • Where in your life can you do more than what is expected of you?
  • Ignore the average things and do the unexpected things that make people say “wow”
  • Dress one step above what you think the dress code will be


 The Compound Effect Summary: Conclusion

So by now, I hope you understand what I meant when I said that this is one of the best books that I have read this year. It’s a super simple, actionable, and practical read that will give real results. I’ve seen results already and I am only a week in. When I was writing The Compound Effect summary I wanted to inject some of my own experiences into the summary to help you grasp certain concepts so I hope you enjoyed that aspect.  I strongly suggest you pick up a hard copy for yourself so you can take notes and add it to your epic library of books.

Buy The Compound Effect Here

Leave a Comment