The compound effect is the principle that success comes from a series of small, smart choices made over time. Alongside those choices sits another essential ingredient: consistency. Consistency is the virtue that stops us giving up. In the moment, the changes these tiny choices produce are so faint that it is easy to wonder why we are bothering at all. The end result, though, is astonishing.
To see how it works, imagine being offered a choice: $3 million in cash today, or a single penny that doubles in value every day for 31 days. Greed says take the cash. In fact the penny is the better deal. After 5 days it is worth 16 cents. After 10 days, $5.12. After 20 days it has reached $5,243 — still a long way from $3 million, and by now our conviction is starting to wobble. This is where consistency earns its keep. The days pass, and on day 31 that penny is worth more than $10 million. With its almost imperceptible daily growth, it has left $3 million far behind, and we barely noticed until the final few days.
That is exactly how the compound effect works. Lots of small changes lead to a surprising result. It can be applied to every area of life, from relationships to health to money. One word of warning, though: the compound effect works just as powerfully in the wrong direction. Bad habits create their own cascade, and it is quite capable of ruining our lives.
The trickiest part of the compound effect is that it only works if we work systematically and over the long term. All of us would like to see the results of our actions straight away, especially when those actions cost us something. But the compound effect pays out only if we keep doing the small, dull, unremarkable exercises, day after day.
