Many of us have heard of the massive impact of compounding when it comes to investing, and it is truly magical when you do the math. Even those in debt can testify to the way little interest amounts can become stumbling blocks to getting out of debt. Today’s book review shares on additional ways by which we can harness the impact of compounding effect for success.
The Compound Effect: Jumpstart your income, your life, your success is a book that takes you back to the basics of understanding that anything worth doing well takes a system of routines, the right habits and consistency, a lot of more consistency than short bursts of action to yield sustainable and accelerated results.
BOOK REVIEW: THE COMPOUND EFFECT|| DARREN HARDY|| VANGUARD PRESS|| 2010|| 173 PAGES
The book has 6 chapters; the first chapter introduces the concept of Compound Effect, whilst the other chapters address different strategies essential to activating the compound effect. The author ends each chapter with summary action steps for the reader.
Compound effect is the principle of reaping huge rewards from a series of small, smart choices. Interestingly, It can be applied to any area where you seek improvement, be it health, wealth, relationships, just about anything. The simplicity of the compound effect is both its strongest and weakest points – strongest in that, it is simple and subtle changes that can easily be followed through consistently; weakest in that, because it is simple and seemingly insignificant, with results that take a long time to see, it can be easily discarded as not working.
Compound Effect also rids you of your microwave mentality, your expectation of instant results.
Some points highlighted as necessary for activating the compound effect are;
Our CHOICES – The author explains that our choices don’t have immediate impact on us until they become habits that then call the shots in our lives and become difficult to uproot because of compounded effect over time – (NB: compounded effect can also be negative).
Our HABITS – He provides 5 strategies for eliminating bad habits and six techniques for installing good habits. He reminds us to be patient with both strategies as bad habits have had enough years to become automated, and new ones will need will also require time, effort, consistency and the grace to start over again when we fall off the wagon.
MOMENTUM – This is the core of the book. Big Mo as he refers to it, is the system of execution of all the above mentioned strategies and staying consistent with them for the long haul before they peak and go on a forward roll. He suggests using the power of a routine especially for your mornings and evenings (the only parts of the day that you may have control over).
The author reminds us not to allow the simplicity of our choices, habits and routine make us miss out of the benefits of a compounded effect on them in the long run.
Tosan take: I totally resonate with Beverly’s story, (a story about a lady who slowly started from brisk walking to running marathons from harnessing the power of compounding habits and actions) and though the value of compound effect is glaring in investing, I can now see how it affects our habit and sabotages our efforts at being successful.
My most important take-away from this is his secret weapon – TRACKING! Keeping track of every action or inaction in areas you’d like to work on or improve. I’ve immediately downloaded a tracking app to help me manage my morning and evening routines. I am looking forward to staying consistent and receiving Big Mo. when he visits. I also may just follow in Beverly’s shoes… literally!