40 pages • 1 hour read
Darren HardyThe Compound Effect: Jumpstart Your Income, Your Life, Your Success
Nonfiction | Book | Adult | Published in 2010A modern alternative to SparkNotes and CliffsNotes, SuperSummary offers high-quality Study Guides with detailed chapter summaries and analysis of major themes, characters, and more.
Chapter 2Chapter Summaries & Analyses
Chapter 2 Summary: “Choices”
Who we are consists of the choices we make. If we’re unconscious of this process—for example, we’re unaware of the rules of our upbringing that we’ve accepted unthinkingly—we can be victims of our unconscious choices. The Compound Effect works just as potently with negative decisions as with positive ones. By becoming aware of small choices that lead us astray, we can wrest control of the process and aim it toward what we really want.
People love to complain, and thereby miss out on appreciating others. Hardy shares that he once kept a “Thanks Giving” journal where, for a year, he recorded daily something good that his wife did. The experience greatly enhanced his appreciation for her, and their relationship entered a new, higher phase. One Thanksgiving, he presented it to her; she said it was the best gift she ever received.
A person in a relationship is 100% responsible for it. If we believe that some of a relationship’s outcomes are the other person’s fault, we abdicate our ability to improve it. This also is true of all outcomes in life: Things that go wrong don’t get repaired until we fix them.
People often believe that success is a matter of luck. In fact, luck is everywhere; what matters is taking advantage of it through preparation, attitude, recognizing opportunity, and taking action.
Once we take full responsibility for our lives, we must carefully examine the choices we’re already making. For anything we want to change—improving our finances, losing weight, or training for an athletic event—we should start by keeping a journal of all our spending, or our complete calorie intake, or every workout. This process, called “tracking,” is a simple task that makes us aware of our actions, good and bad, in pursuit of a goal. Done diligently, it compounds our understanding and our ability to improve any process.
During his early 20s, Hardy learned from his accountant that he owed a huge tax bill but had squandered his cash. The accountant had Hardy keep a notebook of every purchase for a month. The practice changed Hardy’s awareness of his spending; quickly he pulled back on frivolities. His savings increased, and the money he did spend on entertainment produced more enjoyment because it was now scarce.
Today Hardy uses tracking diligently on a number of daily processes to keep them on target. As he writes: “All winners are trackers” (33). This includes Las Vegas casinos, champion athletes, and anyone focused on success. It’s an “idiot-proof” way to improve performance. To start, track just one habit for a week, but be relentless and thorough. The perspective you gain will astonish you, Hardy says, and your behaviors will begin to change. After a week, reenroll yourself to track the process for two more weeks, for a total of three. After three weeks, it becomes a habit and will continue to serve you.
The money someone spends on a $4 coffee every workday for 20 years, if invested instead at 8% interest, would be worth nearly $59,000. It’s thus wise to consider that the $4 coffee actually costs $20; only if it’s worth that much to you today should you buy it. Making these choices now will lead to abundance later. Tiny differences—a golf stroke, a horse’s nose—separate the huge winner’s prize from the also-rans. Likewise, tiny shifts in habits, consistently applied, lead to big payoffs later.
Hardy mentored a chief executive officer (CEO) who never met 80% of his staff. The CEO agreed to an assignment: Thrice weekly, he was to walk to the desks of three people who deserved praise and compliment them, then make a note of the encounters in a logbook. The staff began to work more diligently, customer service improved, referrals and repeat business increased, and net profits grew by 30%.
Hardy’s office assistant wanted to save 10% of her salary, but expenses took up nearly every penny. Hardy worked with her to make small changes to her buying habits—boxing her lunch once a week, brewing Starbucks coffee at the office instead of buying it by the cup at the coffee shop, and canceling a magazine subscription she didn’t need—until, by year’s end, she was saving 10% at nearly no cost to her lifestyle.
She also shifted some of her entertainment cash into educational products, which inspired several profitable ideas for the company; she implemented them and doubled her income. Some years later, after she launched her own business, she possessed more than $1 million.
Waiting to start good habits reduces the number of years in which the Compound Effect can work. Investing regularly at a young age produces more money at retirement than does someone who starts in middle age, even if the middle-aged person invests for more total years. Beginning the process at any age is better than never starting, though, and small amounts, consistently invested, will grow surprisingly large with time.
Hardy mentored an overweight sales rep who wanted to look her best for an upcoming high school reunion. She also wanted to run a half-marathon alongside a friend but believed she could never do such a thing. Hardy had her walk one mile around her neighborhood three times a week for three weeks. Then she began jogging, a little at first and then more until she could jog the entire distance. Thereafter, she added one-eighth of a mile each day until, after nine months, she could run an entire half-marathon. In a ripple effect from the jogging, she lost 40 pounds, her relationships improved, she doubled her sales, and now runs full marathons. All of this was the outgrowth of small changes that she made in a consistent manner.
Chapter 2 Analysis
In Chapter 2, Hardy begins his deep dive into the substance of his system. The chapter focuses on two skills: assuming responsibility for one’s outcomes, and keeping journals that track problem behaviors with a view to improving them.
Hardy explores how to cultivate The Habit of Hard Work. Chief among attitudes that hold people back is blaming the world for one’s problems. Putting the fault on others, or on fate or bad luck, is an attempt to exonerate ourselves or to avoid making an effort. This has no power. Hardy suggests instead that we accept 100% responsibility for any situation we’re in and then fix it through hard work. This isn’t an attempt to condemn ourselves but to open our eyes to the ways we can improve through our own efforts.
Hardy isn’t saying that others aren’t responsible for their part in the success or failure of a mutual project. He is saying that each of us is completely responsible for the outcomes we desire. Other people in our lives are similarly responsible for the outcomes they desire. People often work together as a means of reaching goals, but if one of the parties fails in their obligations, this simply means they have fallen out of alignment. If possible, the team negotiates a realignment, repairs the damage, and continues forward. If not, the remaining team members are responsible for finding alternative ways and/or people by which they can achieve their goals.
Sometimes others can be difficult, or there’s bad weather, or our flight gets canceled, or we suffer an injury. Our job is to find ways around these difficulties. If it’s too late—our spouse leaves, we get fired, the deal falls through, we break a bone or get sick—we take inventory of any mistakes we made, make corrections, and move forward to quickly repair any damage.
We sometimes feel a sense of responsibility for the welfare of those with whom we work closely. This doesn’t obligate others to feel likewise toward us. If we insist that other team members share our motives, we become entangled in trying to control them or force them to obey. This is a form of blaming others for our failure to achieve our own goals. It is an excuse for complaining and a source of rancor and stress. When we abandon the desire to control, we can focus instead on the power of being responsible for our desired outcomes.
Hardy describes a method for making improvements through “tracking.” This involves keeping a journal of a specific activity—writing down, for example, every calorie consumed or every dollar spent or every mile walked—and noticing bad or good trends in our behavior and making appropriate adjustments. This system anticipates and corrects potential trouble before it happens, and it quickly repairs any ongoing problems. In gaining control over our behaviors, we assume responsibility for our outcomes.
This doesn’t mean that other people can run roughshod over us. If they misbehave, it’s our responsibility to take steps either toward clearing up the conflict or to find others with whom we can work harmoniously. It’s always on us to get the results we want. That attitude opens up many opportunities we wouldn’t notice if we indulged in blaming others.
