The Compound Effect Summary

SMALL, SMART CHOICES + CONSISTENCY + TIME = RADICAL DIFFERENCE

The Compound Effect is the principle of gathering huge rewards from a series of small, smart choices. Small, seemingly insignificant steps completed consistently over time will create a radical difference.

Everything in your life exists because you first made a choice about something. Choice is at the center of all success and failure. It is what we choose that makes the biggest difference.

Too often we sleepwalk through our choices. We default to choices that our society and culture tells us we should do. And it's not big choices, but ones that you think don't matter or count for much that derail us.

• 95 percent of everything we feel, think, do, and achieve is a result of a learned habit.
• With enough practice and repetition, any behavior, good or bad, becomes automatic over time.
• That means that even though we developed most of our habits unconsciously (by modeling our parents, responding to environmental or cultural associations, or creating coping mechanisms), we can consciously decide to change them.
• The habits you indulge in could be compounding your life into a repeated disaster.

• Compound Effect: reaping huge rewards from a series of small, smart choices. Steps feel insignificant, results are massive.
• Doesn’t matter how smart you are. Just work harder, work smarter.
• Be the guy who says no. It’s no achievement to go along with the crowd.
• Ripple effect: Even one small change can have a significant impact.
• The Secret: hard work, discipline, good habits.

……. is “the principle of reaping huge rewards from a series of small, smart choices, made consistently, over a long period of time.”

Compounding requires enormous amounts of patience and faith.

Would you rather have (A) $3 million upfront or (B) one penny that doubles in value every day for 31 days?

Choose any one!!

To maximise your gains, the correct answer is (B). But it doesn’t happen quickly. After 19 days you’d still only have $5,243 and you might feel pretty foolish next to a friend who chose option (A).

It’s not until day 29 that the compounding gains of option (B) net you $3 million. And by day 30 your patience would have tripled option (A). (See figure)

Is "the principle of reaping huge rewards from a series of small, smart choices, made consistently, over a long period of time.” Compounding requires enormous amounts of patience.

For example: Would you rather have (A) $3 million upfront or (B) one penny that doubles in value every day for 31 days?

To maximise your gains, the correct answer is (B). But it doesn’t happen quickly. After 19 days you’d still only have $5,243 and you might feel pretty foolish next to a friend who chose option (A).

Everything in your life exists because of a choice you made. Every choice has an impact on your life’s Compound Effect. You can not sleep-walk through life and expect good outcomes.

Successful people aren’t more intelligent/talented, they just have habits that help them be more informed, knowledgeable, skilled, prepared, competent. 

It's your small (subconscious) habits and your (conscious) choices that in time compound to the person you are now. To change the future you have to change your habits and actions. 

If you were given a choice between taking $3 million in cash this very instant and a single penny that doubles in value every day for 31 days,

which would you choose?

Now, calculate independently and see the “magic” of compounding pennies.

1. Larry didn’t change his routine, he did like he was doing always.
2. Scott started making some small, seemingly inconsequential, positive changes like reading 10 pages of a good book per day, 20 minutes of podcasts, cutting 125 calories from his diet every day, and walking a couple of extra steps daily. No big deal of bravery or grand effort was done. Doable? Yeah.
3. Brad, makes some poor choices, he bought a big screen TV, so he can watch more of his favorite programs, tried out new recipes on the food channel, and installed a bar in his room which added a few drinks per week. Nothing crazy, Right?

The Compound Effect “is the principle of reaping huge rewards from a series of small, smart choices,” made consistently, over a long period of time.

For example, would you rather have (A) $3 million upfront or (B) one penny that doubles in value every day for 30 days?

If you have taken option (B) then - 

Day Money you have ($)

1 0.01

2 0.02

.

.

.

15 327.67

.

.

.

27 1,342,177.27

28 2,684,354.54

29 5,368,709.08

30 10,737,418.16

You can able to see the change after 28 days. It's the power of Compound Effect.

Habits are what can help us in shaping our future. Good habits can build us however bad ones can destroy us. Here are some strategies to leave bad ones.

A teacher and his young pupil were wandering in a forest. The teacher asked his pupil to pull up the sapling which was just sprouting from the ground. The pupil pulled it easily. The teacher again asked the pupil to pull up the sapling which was knee-high to the boy. With a little effort, the pupil pulled that too. Ultimately, the teacher asked to pull up a mighty oak which was so tall that the boy could not see the top. The pupil seeing this told that it is impossible.

"My boy, you just demonstrated the power that habits will have over your life!" the teacher exclaimed. The older they are,...

the bigger they get, the deeper the roots grow and the harder they are to uproot. Some get so big with roots, so deep, you might hesitate to even try."

Little decisions you make every day add up over time and can lead to big results.

Doing something regularly, even if it's small, is better than doing big things once in a while.

You reap what you sow; you can't get out of life what you're not willing to put into it.

Success isn't about doing five thousand different things well. Success is doing the right things well five thousand times over.

You do not need new information; you need a new plan of action.

The Compound Effect is the principle of reaping huge rewards from a series of small, smart choices.

Small Choices + Consistency + Time = Radical Difference

The most challenging aspect of the compound effect is that we have to keep working consistently for a long time, before we begin to see the payoff.

Option 1: You are offered $3 million.

Option 2: You are offered a single penny that doubles in value every day for 31 days.

After 31 days:

• If you chose option 1 - You have $3,000,000.00 (if you don't spend it)
• If you chose option 2 - You end up with $10,737,418.24. FUN FACT- on day 29, you will only have $2.7 million. You beat option 1 only on day 30.

Assume I gave your friend $3 million, and I asked you to save a penny for a month, with it slowly doubling each day. Which would you pick?

If you’ve come across this gambit before, you know picking the penny is the right option. Yet, why is it, in reality, a decision like this would be so hard to make? On day ten, you have $5.12 while your friend is still in the millions. Day 20, you’re still stuck with $5,243.

The real magic happens on day 29. You have 3million dollars, and your friend may have spent half his cash. Day 30, you have $10,737,414.24

This is the magic of the compound effect.

People don’t achieve who they are overnight, but because of a series of choices that they have made.

We humans often make bad choices because we love anything that provides us with instant gratification. If you immediately developed lung cancer, the moment you picked up that cigarette, I’m sure you wouldn’t think twice about stopping smoking for good.

Any awful habit repeated over a long period takes you one step farther away from your future goals. Similarly, every decent habit performed diligently over time pushes you a step closer.

it's not the fastest who wins the race but Slow and steady wins the race'. Because of the consistency.

Compound effect is the principle of reaping huge rewards from a series of small, smart choices.

At every point of time we have choice to choose go ahead or stop doing what we are doing. And what we choose at that point of time results in future.

The most interesting thing about compound effect is that even thogh the results are massive, the steps, in the moment, don't feel significant. This principle, we can use for improving health, relationships, finances, or anything , however the changes are very subtle.

These small changes offer littl3 or no immediate resuly, no big win, no obvious but in the long run, it creates great results.

Most of the people tripped up and give up so early because they dont see any immediate results.

But the reality is that even one small change can have a significant impact that causes an unexpected and unintended ripple effect.

Compount effect can also work in negative way and can create a ripple effect thay impacts our entire life.

SMALL, SMART CHOICES+CONSISTENCY=RADICAL DIFFERENCES