Young Upstarts

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[Review] The Compound Effect

The book “The Compound Effect” is based around a very simple principle: that little, everyday decisions have, in the long run, very significant impact on your life. Just like how compound interest over time can lead you to financial prosperity or gain, author Darren Hardy – who is the publisher of SUCCESS Magazine – distils some of the fundamental ideas around compounding for achieving success in business, relationships and more.

Here are two key lessons that can be gleaned from the book:

Track everything.

Hardy shares that winners are those who track every single thing in their lives, so that they keep their goals in sight.

It works because it brings moment-to-moment awareness to the actions you take in the area of your life you want to improve. Likewise, you can’t make the most of who you are – your talents and resources and capabilities – until you are aware of and accountable for your actions. You cannot manage or improve something until you measure it.

Tracking your finances, for example, shows you where you are overspending.

Momentum matters, but pick the right habits.

Having momentum is great, but it can also go the other way:

(M)omentum works on both sides of the equation – it can work for you or against you. Since the Compound Effect is always working, negative habits, when left unchecked, can build up steam and send you into a tailspin of “unlucky” circumstances and consequences.

The obvious is to then pick the right habits, and work towards them. After all, the worst thing you can do is build momentum when you’re headed the wrong way!

There’s nothing really mind-blowingly original in “The Compound Effect“; most of us are already cognizant of the lessons within, it’s just a matter of whether we choose to actually implement them in our lives. But the book serves as a good reminder of how the little things in life can catch up with you if you’re doing it wrong, or that a little bit more effort in a particular area of your life can pay huge dividends in the future.

Daniel Goh is the founder and chief editor of Young | Upstarts, as well as an F&B entrepreneur. Daniel has a background in public relations, and is interested in issues in entrepreneurship, small business, marketing, public relations and the online space. He can be reached at daniel [at] youngupstarts [dot] com.

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