"The Compound Effect" by Darren Hardy

Book Summary:

“The Compound Effect: Jumpstart Your Income, Your Life, Your Success” by Darren Hardy is based on the principle that everyday small decisions shape your destiny. The little decisions you make on a daily basis, will either take you to the life of your dreams or to disaster.

Darren Hardy shares lessons learned from his personal experiences and lessons from some of the most successful people on the planet, including Richard Branson, Warren Buffett and many more.

Here are a few things readers will learn from this book:

  • How even the smallest actions can lead to a radical positive result over time.

  • How to break your bad habits (some you might be unaware of) that are derailing your progress.

  • The real, lasting keys to motivation--how to get yourself to do things you don't feel like doing.

  • How to capture the elusive, awesome force of momentum.

And much more.

Author Bio:

Darren Hardy has been a leader in the personal growth and success industry for more than 20 years. He has led three success television networks and for eight years, Darren led the rebirth of SUCCESS Magazine as its publisher and founding editor.

These positions have given Darren unprecedented access to interview, investigate and publish the stories of the most successful entrepreneurs and business leaders in the world, including Richard Branson, Steve Jobs, Elon Musk, Jeff Bezos, Mark Zuckerberg, Howard Schultz, Steve Wynn, Jack Welch and many more.

Businessman, publisher of SUCCESS magazine and author Darren Hardy.

Businessman, publisher of SUCCESS magazine and author Darren Hardy.


1) Use the Compound Effect to your advantage

The Compound Effect is the principle of reaping huge rewards from a series of small, smart choices. What’s most interesting about this process to me is that, even though the results are massive, the steps, in the moment, don’t feel significant.
— Page 9

Darren Hardy starts the book with a story about a magic penny.

If you were given a choice between getting $3 million in cash today or a single penny that doubles in value every day for 31 days, which one would you choose?

Darren points out that the majority of people would take the $3 million today because it not only looks like the better deal, but it also takes a lot longer to see the payoff for the magic penny.

In fact, the Compound Effect of the magic penny is invisible for much of the time.

For instance, if you picked the magic penny and your friend took the other option, on day 10 your friend would have $3 million in cold, hard cash, while you would have only $5.12.

On day 20, you would have $5,243, which is a lot better than $5 but still nowhere near the $3 million dollar mark.

By day 29, you’ll have $2.7 million, almost as much as your friend’s $3 million. However, it isn’t until day 30, that your magic penny bet pays off and is now worth $5.3 million. On day 31, the very last day, your penny doubles again and is now worth a total of $10,737,418.24.

About three times more than your friend’s, now tiny, $3 million prize.

It’s only near the very last few days that the Compound Effect turns visible and people see why the better choice was the Magic Penny.

This is the power of the compound effect:

Small, Smart Choices + Consistency + Time = Radical Difference

Let’s look at another example.

Suppose your friend puts away $250 every month into an IRA (that grows 8% each year) after getting their first job after graduating college at age 23. You, on the other hand, don’t start saving until you’re 40.

By the time your friend hits 40, she’ll never have to invest another dollar and will have more than $1 million by the age of 67. You, on the other hand, will have less than $300,000 in your account, even though you invested $27,000 more than she did.

Don’t waste another day waiting to start a good habit, the earlier you start, the sooner you’ll see a positive outcome.

Don’t waste another day waiting to start a good habit, the earlier you start, the sooner you’ll see a positive outcome.

Both you and your friend made a small and smart choice by putting away money for retirement, and both of you were consistent with putting away $250 each month, so why did your friend have nearly three times as much money in the end?

It’s because she were able to use time to her advantage. The Compound Effect multiples your efforts so the more time you invest into a good habit, the greater outcome you’ll see.

2) Own 100% of your life

Everything in your life exists because you first made a choice about something. Choices are at the root of every one of your results...In essence, you make your choices, and then your choices make you. Every decision, no matter how slight, alters the trajectory of your life.
— Page 23

Darren Hardy goes on to say that choices can be our best friend or our worst enemy. They can deliver us to our goals or send us into a galaxy far, far away.

Every decision, no matter how small, can change the direction of our lives.

That is why it’s so important to own 100% of your life.

The author writes that too many people point fingers, play the victim, blame the government or expect someone else to solve their problems; that is not owning your life.

People that don’t own their life will say:

  • I was late to an important meeting because of traffic.

  • My co-worker messed up the presentation, not me.

  • My teenage son and I don’t get along because he’s a jerk.

However, people who do own 100% of their lives will say:

  • I should have left my house 30 minutes earlier to make sure I wasn’t going to be late.

  • I should have double-checked the presentation a few days before the due date to make sure the work was excellent.

  • I should read parenting books about teenagers and try to bond over common hobbies.

See the difference? (This lesson is also found in “Extreme Ownership” & “12 Rules for Life”)

Darren writes that “You alone are responsible for what you do, don’t do, or how you respond to what’s done to you...If it was to be, it was up to me.”

This empowering mindset revolutionized his life.

It’s easy to blame others, make excuses, say that the economy isn’t doing well or the President is doing a bad job, but none of that victimhood mentality will help you succeed in life.

You can’t control the world or other people, but you can control yourself.

3) Avoid the Trap of Instant Gratification

Why are we so irrationally enslaved by so many bad habits? It’s because our need for immediate gratification can turn us into the most reactive, nonthinking animals around.
— Page 59

If you took a bite of a Big Mac and immediately fell to the ground from a heart attack, you’d probably never eat one again in your life.

And if you smoked a cigarette and all the sudden your face was wrinkled and your teeth turned yellow, you’d likely quit smoking forever. Or if you ate a piece of ice cream cake packed with chocolate and frosting, and it added 30 pounds to your frame, saying “no thank you” to dessert next time would be a piece of cake.

The problem, however, is that all of these actions involve an instant sense of gratification and your mind doesn’t concern itself about the long-term consequences.

Having a burger, smoking a cigarette or eating cake, provides us with pleasure and there are no apparent negative effects at the moment.

But, as Darren Hardy mentioned earlier, the Compound Effect is always in motion, for both good and bad habits.

Even the smallest change can have a huge difference.

For instance, imagine a plane leaves from Los Angeles to New York City. If the nose of the plane is just 1% off, the plane will end up about 150 miles off course and will arrive in either Albany, New York or Dover, Delaware.

Even a small change, such as a 1% change in direction, can result in a completely different outcome. Make sure your habits are taking you in the right direction.

Even a small change, such as a 1% change in direction, can result in a completely different outcome. Make sure your habits are taking you in the right direction.

The same goes for habits. A single bad habit may not look like much at the moment, but over time it can lead you miles off course from the direction of your goals and the life you desire.

There’s a great quote in the book by leadership expert John C. Maxwell that says, “You will never change your life until you change something you do daily. The secret of success is found in your daily routine.”

So look at the actions and habits you take every day and ask yourself, “Is this bringing me closer to my goals or away from them?”


There’s a reason this book is a New York Times, Wall Street Journal, and USA Today bestseller, it’s because this book is incredibly insightful. Darren Hardy does an excellent job of teaching readers the amazing impact of the Compound Effect and provides several analogies that really stick in the reader’s head.

The shocking part is that this book is only about 160 pages. There is no fluff or guff. It’s pure gold. I would recommend reading this book at least twice and make sure to highlight important passages, jot down notes and write down steps on how you can start changing your life for the better.

Definitely get this book, it will be going into my Book Hall of Fame.

Rating: 5/5 stars

If you’re interested in reading the book, click here or on the image below.

If you’ve enjoyed this book, here are three similar great books: 

For literally a few dollars and hours of time, a book will give you an enormous amount of valuable information that can help you in life. It’s practically highway-robbery. So take advantage of this and read as much as you can.

If you want to check out my list of recommended books, you can find that here.

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