The Compound Effect explains that making small improvements, over time, will result in life-changing results.
Let’s play a little scenario; pretend someone offered you the following;
You put in 30 minutes at the same time every day, push your skills, and show Improvement. At the end of the first week, you’ll get $10, with a 10% raise at the end of each week. if you consistently put in the same time day after day.
Or, you were offered $5,000 to put in the same amount of time but you don’t need to do it on a consistent basis and you don’t need to improve your skills, you can just use your existing skill-set.
Now, which would you take?
The Compound Effect in Action
Let’s say you took the first option and your friend takes the 5 thousand dollars.
You start putting in a small amount of consistent work each day after an entire month of daily effort, you’ve made $51.01, meanwhile, your friend is cashing a check for $5,000. After the second month, your friend is rubbing it in your face.
He just made $10,000 not needing to push himself and here you are working day after day for a petty $125.81 up to this point.
Your family starts suggesting that you should take the other offer is it still on the table but you don’t get discouraged, you believe in what you’re doing and you know the hard work will pay off one day.
After the third month, people are getting downright angry with you. You have only made $235.24 they think you’ve made a stupid decision and beg you to take the other offer. But, you ignore them and keep proceeding.
A year goes by you only have $15,541 to your friend 60,000 he’s living a comfortable life and doesn’t really have a care in the world.
Meanwhile, people openly ridicule you for giving up such a great opportunity to make easy money. Only after 16 months, do you make the same amount of money as your friend. Your friends and family only have one thing to say, it’s about damn time.
After 16 months of putting in the time day after day, and receiving a 10% increase at the end of each week, only now are you starting to see significant results. The next month you make $40,000 in one month. The month after that you make $59,000. At the end of that second year, you have accumulated just over $2.2 Million dollars. An average of 1.1 million per year to your friend’s $60,000 a year. Your family and friends are dumbfounded. Your friend can’t help but think, he’s missed out on something significant.
Sure he is comfortable with $60,000 a year but is filled with regret.
What the story illustrates is that small unsexy but smart decisions made consistently every day that are in alignment with your big Vision, lead to seemingly incomprehensible and incredible results. Results that you can be truly proud of.
Author Darren Hardy calls this the compound effect. Darren Hardy is a multi-millionaire. He has interviewed 6 successful entrepreneurs a month for his magazine, Success, and he’s found that almost all self-made success uses The Compound Effect. He says what’s most interesting about this process to me is that even though the results are massive the steps at the moment don’t feel significant, the changes are subtle they’re almost imperceptible the small changes you make every day offer no immediate results, no big win, and no I Told You So pay off. So Why Bother?
It’s hard not to think this way when we lived in a culture that promotes what Darren Hardy calls a microwave mentality. We expect instant downloads fast food and same-day shipping. To stay true to the compound curve. We need to trade the need for immediate results for immediate alignment with our core values.
Darren says your core values are your guiding beacon. Your personal GPS. They act as the filter through which you run all life’s demands requests and Temptations. Make sure they’re leading you towards your intended destination. Getting your core values to find and adequately calibrated is one of the most important steps in redirecting your life toward your grandest vision.
When you know that what you’re doing from moment to moment and that the choices and decisions that you’re making from moment to moment and aligned with your core values, you stopped needing to have instant results show up in your life. You are content in knowing that you were becoming the person that you want to become.
To discover your core values within your work setting complete the following exercise:
Think of someone successful within your field or the field you want to work in that you respect, then ask yourself, what key attributes most contribute to their success. When I do this exercise, I think of people that are curious, love learning, and teach themselves to produce great things in the world. There for, my core values in work, are learning and creating things that challenge the status quo. Now it’s my duty to know if my actions are in alignment with my core values. So I need to monitor every single choice that I make while working.
Darren Hardy says that most of us are sleepwalking through our daily choices. Half the time we’re not even aware that we’re making them. To make sure that I am aware of my choices, during my work hours I started writing down every work-related decision that I make. At the top of each hour, I write down what I focused on in the last hour. Then at the top of the page, I write down my core values of learning and creating I then objectively cross out every decision that I made that doesn’t align with my core values. This exercise has sharpened my focus.
I start to notice things that aren’t in line with my core values almost immediately, knowing that I’m making small decisions that are moving me towards the person I want to become, is enough quiet my mind from wanting to see instant results.
The act of aligning each work decision with my core value provides me with the reassurance and motivation to stick with my daily pursuit of achieving a compounded, incredible result in my life.
Sometimes, knowing that we are making good choices isn’t enough. To know that we are on the right path, the compound path, we need to focus and measure the percent gains and not the net gains.
In the initial example, if I would have focused on the net income I was making each month, and how petty it was in comparison to my friend then I would have given up. By focusing on a month-by-month percentage return, the month-over-month gain I was achieving each month, I developed the certainty to stick with it.
So during your Pursuits, actively measure the percent gains and focus on your momentum. If your efforts are producing month-over-month or week-over-week improvements, and your daily choices are aligning with your core values then you need to be patient. We humans routinely overestimate what we can produce in a week but we vastly underestimate what we can produce in a few months, or years with the same effort.