We Study Billionaires - The Investor’s Podcast Network - TIP182: The Compound Effect by Darren Hardy (Business Podcast)

Starting point is 00:00:00 You're listening to TIP. Hey, how's everyone doing out there? So on today's show, we cover a really great book written by a New York Times bestselling author, Darren Hardy. The name of the book is the compound effect. And the reason that we're covering this book is because Darren Hardy was the former editor at Success Magazine. And he has an enormous amount of experience interviewing billionaires and highly accomplished individuals. So his notes and his comments on this book are really profound, especially if you're the type of person who's always trying to improve. and add more success into your life. Also, his book is one of the top selling business and

Starting point is 00:00:34 success books on Amazon, and this was the case for an extended period of time. So, without further delay, let's go ahead and get started. You are listening to The Investors Podcast, where we study the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. All right, how's everyone doing out there? So like we said in the introduction, we're going to be covering the book, The Compound, effect, and this was written by Darren Hardy. I personally really liked this book. In fact, I might go as far as saying that this would be like a top 10 or top 15 book for me. And I'm curious, Stig, if you had the same opinion on this, did you like this as much as I liked it, or did you think

Starting point is 00:01:26 it was average or what? I'm curious to hear your thoughts. Well, I like the book in terms of the universal rules that he outlines. It's so clear that he's a great motivational speaker. And so whenever he explains something, it's never like, this is how you get wealthy. It's always like, it's not 10 times, it's not 100 times, it's a thousand times richer than before. And so I guess, like, if you like that, I know it could probably come out as a lot more skeptic than I want to. I think you need to know that before you were potentially reading the book. But I said before, like all the principles that he outlines for having a successful life, I think that's pure gold. and his mindset is just such an abundance of good advice and a good way of living your life. So I

Starting point is 00:02:12 definitely agree with you on that one. What I also liked about it is he's saying, how can you achieve success and use this compounding effect in order to achieve success? But he doesn't say what success is. He leaves that up to the person who's reading it to define what it is that they're trying to achieve. So like, you know, I think a lot of people immediately turn to think that it means financial success, but that doesn't necessarily mean what he's getting at here. A person who would read this, and this is going to help them achieve whatever it is that they're going after, whatever that goal might be. I'd also say this would be one of those books that I think would be really important

Starting point is 00:02:46 for a person to read multiple times. I think that this would be something that, you know, you should probably pull out every six months or every year and probably read this. And it's not a long book. This is, you know, like 150 pages, 160 pages. But it's just straight to the point. It tells you what you need to focus. on in order to keep nugging away and achieve what you want.

Starting point is 00:03:06 So what we're going to do for the book is we're going to go chapter by chapter and just kind of give you the highlights of what we read here. So the very first chapter defines what the compound effect in action is. And he starts off the book by stating this. He says, ever heard the story of the tortoise in the hair? He says, ladies and gentlemen, I am the tortoise. Give me enough time and I will beat virtually anybody anytime in any, and ever heard. any competition. And he says, why? Not because I'm the best or the smartest or the fastest. I'll win

Starting point is 00:03:40 because of positive habits I've developed and because of the consistency I use in applying those habits. I am the world's biggest believer in consistency. That's how he starts the book. And having read a lot of different books on these billionaires that we study and these success habits and stuff. I can honestly say this is one of the critical variables. This is one of the things that keeps coming up over and over again is developing good habits and then doing them consistently over and optimizing those habits. And that's how he starts off the book. And he says, in short, the compound effect is the principle of reaping huge rewards from a series of small, almost minuscule smart choices day in and day out. And that's what this book is about.

Starting point is 00:04:30 And he provides this great example with these three friends, Larry Scott and Brad. And in this example, they just have very similar casueristics. So let's assume that Larry keeps doing what he has always done. Now, Scott makes those small positive changes that Preston talked about before. Say he'll be reading 10 pages in a book about self-development. He will be cutting 125 calories per day by simply replacing soda with water. and then he'll also be walking an extra 1,000 steps. And then you have Brad, and he's the opposite of Scott here.

Starting point is 00:05:06 He makes a few poor choices, like he'll be buying a new big screen TV, eating more dessert, just say adding one drink more per week by going to a new bar. Not anything big, just small, consistent, bad changes in his habit. And the author did the math for us. So he said after month 10, there is no foreseeable difference. By month 20, there are some differences, but by month 31, the differences become quickly quite stark. Scott, the guy with good habits, he loses 33.5 pounds.

Starting point is 00:05:42 He gets a promotion and a race, and his marriage is thriving. And then Brad, on the other hand, with the bad habits, he puts on 33.5 pounds, which is 37 pounds more than Scott. And he starts feeling sluggist, less confident about himself, probably also becoming less productive at work, more withdrawn from his marriage, and basically living to both unhappiness, both at work and at home. I really like this example in the book. He actually provides the detailed math of how he came up with this. But I think it tells you something about the consistency of having the habits. And also because whenever we are thinking, about changes in our life. We think about big changes, you know, at divorce or winning a lottery

Starting point is 00:06:32 or something like that, but that's not your life. Your life is all your habits, all the small changes you do on daily basis, either to your advantage or to a disadvantage. And this book is all about using those universal rules to your advantage. One of the things that I liked, and this kind of piggybacks on the Charles Duhigg theme of Keystone Habits, is that this compounding, impact, this ripple effect, that if you change one thing that it'll ripple off into other areas of your life. And that's kind of what Stig was describing there with the story. But I know in Charles Duhigg's book, he talked about how if a person tries to become healthier, how that actually rippled into all these other areas and they had all these other better habits because of that one

Starting point is 00:07:15 habit. He doesn't describe it that way in the book, but he kind of hints at that by this section that he calls ripple effects of your habits. So that's how he does. defines this compounding effect is that it's these small little things that you do day in and day out that are just slightly tweaking your habits and that in the long run it produces these massive rewards and interest, if you will, on the behavior. So in chapter two, this chapter is titled Choices. And what he says is every decision, no matter how slight alters the trajectory of your life, whether or not you go to college, whom to marry, to have the last drink before you drive, to indulge in gossip or stay silent, to make one more prospecting call or to call it a day,

Starting point is 00:08:04 or to say, I love you or not. Every choice has an impact in your life. And the result of all of those choices is what you have today. And so what I really like about this idea is he also gets at the fact, and I'm sure people have heard this before, that not making any choice is a choice as well. So if you decide to do nothing and just sit on your hands, that, in fact, is a choice. And that's going to also drive what path you're going down. So after stating that, he says, your biggest challenge isn't that you've initially been making

Starting point is 00:08:39 bad choices. He says, heck, that'd be really easy to fix. your biggest challenge is that you've been sleepwalking through your choices. And he says that a majority of the choices that people make, they have no idea they're making them on a daily basis. They're just habits that they're just almost like a programmed response. And I think there was a part in here where he quoted some Harvard, and I don't know if it was in the second chapter, but he quotes a Harvard PhD that did some analysis. and it was something like 95%, the choices that a person makes throughout the day are just completely habit-based. They're doing them just out of total habit.

Starting point is 00:09:20 Like you're driving to work, you're just making decisions, you're making choices that are completely subconscious for the most part. You're just putting on your turn signal. You open the refrigerator at this time when you walk down the steps. All of these things are just naturally happening because they're habits. And that's where he's saying you have to figure out what those things are and start taking control. of those habits. And I absolutely love this whenever he says that the day you graduate from childhood to adulthood is when you take 100% responsibility.

Starting point is 00:09:52 I think that's just such an important thing. And he even starts out this chapter by saying, if there's just one thing, just one thing you can take away from this book, it should be, it's your responsibility. And that's it. And I absolutely love that. He comes up with great examples saying, if you're late from work, don't blame the traffic. It's your responsibility to just leave earlier if there's a lot of traffic. If you co-worker messed up your presentation, is that your fault?

Starting point is 00:10:21 Well, you could have double-checked. Own your successes and your failures. Always point the fingers towards yourself. Because otherwise, you come into this mindset of being a victim, which is something he talks a lot about in this book, never ever be a victim. It's not about luck. Right? I mean, because that would be the next thing. Well, some people are lucky. And he debunks that by saying, well, 80% of US millionaires, their first generation. So yeah, you can make an argument

Starting point is 00:10:48 that the other 20%, you know, they're lucky. Sure, but the vast majority, they made it by themselves. They made it because they are person responsible for what they're doing. And he says, you know, yeah, you can get lucky, but that's more in terms of health issues or where you were born. And he has this formula in his book when he says, this is the formula for luck, if anything. And he says, preparation, which is the personal growth, plus attitude, which is your believing mindset, plus opportunity that good things are coming your way if you seize it, plus action, meaning doing something about it. That's luck.

Starting point is 00:11:26 Nothing more and nothing less. And I like how he lists this up because it always is easy to say, yeah, I'm just an old-gay-person or I wasn't born with a million dollars. So what? It's still your responsibility 100%. Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending three days in Oslo at the height of the summer. You've got long days of daylight, incredible food, floating saunas on the Oslo Fjord, and every conversation you have is with people who are actually shaping the future. That's what the Oslo Freedom Forum is.

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Starting point is 00:15:30 sign up for your $1 per month trial today at Shopify.com slash WSB. Go to Shopify.com slash WSB. That's Shopify.com slash WSB. All right. Back to the show. You know, whenever I was younger, my high school days, I was really, really bad at taking 100% ownership for anything that happened. It was just, I guess, for me, very easy to say, oh, well, you know, that happened over there because of this other person or, yeah, it was maybe a little bit of my fault, but it was always like partially my responsibility. It was never 100% of my responsibility. And one of the most difficult things that I learned whenever I showed up at West Point, the very first day was this idea of 100% ownership.

Starting point is 00:16:25 Because let me tell you, that was the thing that probably stood out more than anything that I learned those first couple days, the first year, the whole four years was this idea that no matter what happened to me personally, whether it was good or whether it was bad, it was 100% my fault or my responsibility. And, you know, it was weird because we would do these things called, duties. It was what they were called. Your very first year that you do these things called duties. And one of the duties that you'd have to do each week was all the laundry for the whole school was done. Like we'd have to send out this laundry in like these bags. And then the laundry

Starting point is 00:17:07 would come back. And then the freshmen, we'd have to sort the laundry. We'd have to prioritize it by the rank of all the students in our company, which was about 120 people in our company. We'd have to prioritize this laundry, and then we'd have to deliver it to all the upperclassmen in the highest rank to the lowest rank, and that somebody couldn't go out the door, and we were all stuffed in this room. We couldn't be out in the hallway or anything. We were stuffed in one person's room, so their room would just get destroyed with all this laundry in there. And then we had to deliver it to each person, and you couldn't deliver it out of order. So if I tried to take it to somebody who was, you know, 50 ranks lower than the number one guy in the company, we had the weight in the room. his laundry until that guy came back.

Starting point is 00:17:50 And so, long story short, we'd make tons of mistakes and we'd make all these airs. And you'd get stopped by these upperclassmen as you're like delivering. And he'd be like, why did this happen? And you're like, you know darn well. It was like maybe your buddy did something or he messed it up and he handed it to you wrong. But if you even thought about responding that it was somebody else's fault, you were just done. You were just dead. They were going to destroy you.

Starting point is 00:18:18 And, I mean, this is one example of like many that happened on a daily basis where you'd be asked a question about why you did or didn't do something and it might be 100% somebody else's fault, which you had to always say, sir, there's no excuse. I failed to do whatever it was. And then that was the reason why you were late. That was the reason why you failed to accomplish something. It always came back to why you failed to do something or why you might. have done something right. And so this experience for me totally manipulated the way I thought

Starting point is 00:18:54 before I went there. And I never really understood how powerful that lesson was until years after I had graduated. Because later on, you know, five, ten years later, and I'm looking back, I was having a conversation with my kids one time. And I was saying, well, you just have to take 100% responsibility for anything that happens in your life. And they looked at me like I was not. Like, well, what if somebody comes up and punches you in the back of the head? Like, how do you take responsibility for that? And I was just like, I don't know. I just do. Like, I shouldn't have been walking on that street. And they just looked at me like I was nuts. But, you know, in a person listening to this, they might think that's nuts. Like, that doesn't make any sense whatsoever.

Starting point is 00:19:35 But I think what Darren Hardy's getting in the book with this idea is that people who take 100% responsibility for every single thing that happens to them, they're always looking to improve because the thing that they're asking themselves, like, let's just take the extreme example. Somebody comes up and hits you and you don't even know this person. Like, the person who takes 100% responsibility would be asking themselves, what could I have done different? So that wouldn't have happened to me. And at the end of that question, they might come to the response of like, really, there was nothing I could have done. But by starting with, I'm 100% responsible for everything that happens with me, you go through that process of trying to optimise.

Starting point is 00:20:18 or figure out how you could have done something better. And when you don't start with that mindset, you'll never think that way and you'll never try to optimize because it'll always be like, well, you know, I wasn't irresponsible for any of this. It was all that other person. And you never go through that process of trying to optimize yourself. And so, I don't know. I'm a very, very firm believer of this owning 100% of everything for yourself because it forces

Starting point is 00:20:43 you to stop playing the victim card because there isn't a victim card in the pocket anymore. when you start thinking like this. But I think it's a strong leap for a lot of people to do. Say that your boss is mean to you. And you're like, just because it's me, it's not my fault. And perhaps you're right. But if that's the situation, it's your responsibility to find another job or it's your responsibility to be transferred to another department

Starting point is 00:21:07 or whatever that might be. It's always your responsibility. Because otherwise, you'll just fall into this role of being a victim. I want to say this, too. I think it's important for people to recognize. that everyone starts out life at a different starting point. There's some people that start life in a very easy upbringing. They have fantastic parents that have groomed them and trained them to think in a certain way,

Starting point is 00:21:34 and they go on to do really successful things. And then there's people that grow up in the worst possible circumstances you could ever imagine. I mean, I've seen this firsthand with my own eyes and some of the places I've lived in combat zones and things. and let me tell you, it's almost mind-boggling to think about the differences of where people start their lives. But I think this is what's really important. I'm not saying one is right and one is wrong or anything in between, but I think what people need to understand is I look at it like this. Some people, when they start their life, they have to climb a hill that is much steeper and other people don't. It's just completely flat.

Starting point is 00:22:14 And for those people that are climbing the very steep hill, you can look at it. at it from this perspective, you're being groomed to handle some of the most difficult situations possible. So if you can work your way out of that, once you do start getting some momentum and moving forward, it's going to make the comparison to the person who had the flat surface from the start that much easier once you do break through. But I think one of the key things to break through, even though that you had a disadvantage from the start, you can get to that same level, it's going to be harder. It's absolutely going to be harder. But you can get to that same level. And when you do get to that same level, you're going to blow past them at such a clip and

Starting point is 00:22:54 such a speed that it's going to make them look like they're standing still. So you could almost say that it can be an asset, but it's very hard to overcome and it's very hard to get the momentum going from the start. And that's what's really difficult. But I think that this mindset, 100% ownership is such a vital piece to success, whatever you define success as. Yeah, and I think that's a good transition to chapter three, which is called Habits. And Preston was already hinting at momentum, which is the fourth chapter, and how to get that, whether or not you have a handicap from day one. So chapter three starts off with a story that I just absolutely love.

Starting point is 00:23:33 It says a wise teacher was taking a stroll through the forest with a young pupil and stopped before a tiny little tree, a little sapling. And he looked at the pupil and he said, pull up that sapling there. Pull it right out of the ground. And so the pupil went up and just pulled the sapling right out of the ground real easy. And so the wise teacher walked over to now like a little bit more of an established sapling. It was a little bit taller, maybe like up to his knees or his waist. And he says, pull that small tree out of the ground.

Starting point is 00:24:04 And so the pupil goes and he just kind of pulls it straight out without much of a fuss. he goes over to yet another tree and this one's like up to his shoulder and he says pull this one out of the ground and he grabs a hold of it and he's kind of yanking and twisting and doing like you know the thing that you always got to do

Starting point is 00:24:20 when you got to pull a tree out of the ground and it's a little bit difficult and then all of a sudden the roots kind of snap and you pull it down and you fall on your butt and so the wise teacher says all right come on over here and he stands in front of this massive oak

Starting point is 00:24:32 that you know he's looking up and it's just like reaching towards the sky and he says pull that out of the ground and of course the people pupil just kind of smiles and starts laughing. And his point is this. He says, some of your habits get so big with the roots so deep, you might hesitate to even try pulling it out of the ground. And whenever I think about people that are in their 50s, 60s, 70 years old and you try to teach them or maybe have them form a different habit than what they're used to doing, that's

Starting point is 00:25:06 almost like an impossible task. That's like trying to pull an oak out of the ground. And I think anybody hearing that story can quickly realize that if you're in your 20s, 30s, 40s, maybe your 50s, if you're not trying to change a habit that you know is a bad habit that's causing pain in your life, man, you got to get to work on that thing fast because it might get to the point where you just start laughing and saying, yeah, that's not changing. So the thing here is that, Changing your habits, regardless of what age you are, can be extremely difficult. And they're very difficult if you're older, just for the same reasons that we've talked about. And so he says that the solution to changing a habit needs to start with the why.

Starting point is 00:25:53 And I'm going to pass it over to Stig to explain what the why is all about. So I guess for me, chapter three was probably the best chapter, because it's about habits. And for people listening to the podcast, they know how big billionaires too are on habits and forming the right habits. So for me, that was kind of like Charles Stuhigg's book, compact version of that here in chapter three. The best point that he has, it's about the why power. And just to explain what the why power is, is that to achieve something, you will need to have a reason to do so. You know, why should I do this? Like, why should I get up from my couch?

Starting point is 00:26:33 Like, there should be a good reason for you to do so. Otherwise, you simply won't do it. And he comes up with this example where it was something like very, very dangerous, jumping up a cliff or going into burning a house or something like that. And he said, I would never do that for 20 bucks. Why would I do that? It's super, super dangerous. But he said, of course, I would do it to save my cat.

Starting point is 00:26:57 I wouldn't hesitate a moment. I know it would be extremely dangerous, but my Y power, but going into that burning house is just so much stronger. And I think that's such an important concept for everyone who sets a goal. Because we can all set a goal of losing 50 pounds or become a millionaire in five years. You know, yeah, that's great. But if your Y power is not good enough. So what can you do if you lose those 50 pounds? Can you play around with your kids?

Starting point is 00:27:26 Is that your Y power? or if you got that million bucks, like could you quit your job and start your dream business or whatever it is? Because before you have that, it's just not going to happen. And I can see that for myself in one of the jobs I had. I really like my job.

Starting point is 00:27:42 I really like my boss. And yeah, I wanted to start my own company at some point in time, but why now? It was a dream, but I really didn't have a good why reason to do so. And there was a rotation, and I got a new boss.

Starting point is 00:27:57 exactly the same department and everything just became extremely toxic for me. Of course, I didn't blame myself. It was always my boss's fault and not me. I didn't take personal responsibility at all, even though I should. But the point in terms of this chapter is, now I had a Y power. Now I came home just as late. And before, whenever I was happy about my work, you know, I would just be hanging out with my friends or watching TV or whatever. But now that I was displeased with my job, even though I came home at the same time, I had the same energy level, I still forced myself to figure out how can I start my own business? And it's just because of that simple factor. I had a reason to do so. Because that is what's happening when you have this why power.

Starting point is 00:28:41 This is where your attention goes and without your energy and time. It's kind of like giving yourself a new set of eyes. And I know it sounds very spiritual, but I think anyone who has really had a reason to do something very badly, suddenly see how the stars sometimes align. So after hearing Stig talk about the Y's, I think what we're really getting at here, which is I think maybe even a deeper level than the Y, is like, what is your fundamental goals? Like, you're on a boat and you're steering this boat somewhere. Like, what is the destination? And I think for a lot of people out there, they're just kind of like the sail isn't even set.

Starting point is 00:29:24 And they're just kind of flapping around in the wind and it's just blowing them all over the place. And they're not really steering the boat anywhere. They're just kind of along for the ride. And wherever the wind blows them is where they're going. And I think what a lot of people need to ask themselves is you got to start with where am I going. Like what's the destination? Like what's the big destination? Like what is it that I'm trying to solve here?

Starting point is 00:29:49 What's my end state? And if you can't define that very clearly, then you're just kind of, of flapping around in the wind out there. And so, like, I would charge people, like, you know, you're probably listening to this in your car or whatever, but when you get back, pull out a piece of paper and write down the five things, like, where you're going. Like, what is it that you're trying to accomplish in life? What is it that you're trying to do? Because whenever you know that, all the other whys will fall into place and they can be subnested underneath of those big, overarching goals that you're trying to achieve. And I think that that is just so important for people

Starting point is 00:30:28 to do. And I would argue, I would have no idea what percent of people literally have no idea what their goals or their end states or what it is that they're trying to achieve. I think they're just going day by day and whatever comes their way, they just kind of take it. All right. So chapter four is titled Momentum. And he refers to momentum as Big Moe. He keeps saying Big Moe in the book, but in general, he talks about this idea that whenever you start doing things consistently and you've set up goals and you're saying, I'm going to achieve this, and I'm going to do this for 30 minutes every day, at this time, I'm going to do X, Y, and Z and you kind of get in this rhythm. What you do is you start building momentum behind that thing that you're working towards.

Starting point is 00:31:14 and he has a picture in the book of a kid on a playground with like those merry-go rounds or you can kind of start spinning. And you know how they're kind of hard to get going, but then once they start spinning, they get going faster. And then after you get that thing moving so fast, like it's kind of easy to keep it going, the speed that it's going. He says that's what it's like when you set a goal, whenever you do these small things every single day built through habit loops,

Starting point is 00:31:44 that you're consistently doing it over and over and over again. And what you do is you build up this momentum. And then once that momentum is moving, like it's really hard to stop you. And so in the book, he says, a couch potato has the momentum to continue to be a couch potato. But a person who has this success rhythm continues busting their butt

Starting point is 00:32:08 and ends up achieving more and more and more and they just keep achieving at a faster clip because they've got these success loops and these success habits in place. And so you have to figure out what is it that I can design around my lifestyle that I can start building these success loops and success habits to gain this momentum because once that momentum gets going, it's really hard to stop. But at the same time, it's very hard to get it going. And he uses a water pump.

Starting point is 00:32:38 If you've ever used a water pump, like it takes forever. If you just keep pumping and pumping at first, like no water's coming up and it just feels like your arm's going to fall off and then all a sudden the water starts coming out. And if you stop pumping, it goes the whole way back down and you got to do it all over again. But if you just keep gradually pumping it once the water starts coming out, you can just keep that momentum going. And he says that's exactly what success is like once you start achieving it. You have to keep doing it. You have to stay in that rhythm. He has this beautiful example of the rocket ship that uses more fuel the first minutes than the rest of

Starting point is 00:33:12 the journey because it has to break free from the pull of gravity. And that is especially true if you're born under unlucky circumstances. You call it that. But then what happens is that once you're pulled free of gravity, you can glide into orbit because you have that momentum. And that's also why it's so important not to break the consistency. Say that you want to lose weight. And then you just slip one day and you binge eat 10 burgers.

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Starting point is 00:37:22 I had the opportunity to do an internship at NASA. And I worked in the astronaut office at NASA. And this was with my degree. I did an aerospace engineering degree. And so they gave me this awesome. opportunity to go down there and work in the astronaut office. Well, when I was down there, I had a couple astronauts that asked me if I'd like to go on a flight with them in their simulator. And I was like, well, yes. It was like, well, who the heck wouldn't want to do that? So this was the

Starting point is 00:37:53 coolest experience ever. So we go into the simulator. This is at Johnson Space Center in Houston. And they take me into this room. It was a large room with like this simulator on like hydraulics. And the simulator starts when you climb in, you kind of lay down on your back because I don't know if people think about this, but when the shuttle launches, this is before SpaceX and all that kind of stuff. This was decades ago. But the space shuttle is upright. And so the crew is literally sitting on their backs when everything starts off. And so like in the simulator there I am sitting next to there was, I think there was three or four astronauts sitting beside me. And then you had the captain and the co-pilot there. in front. So I could see them in front of me and then I had a bunch of astronauts sitting right next to me in like the back seats. And this is how it is in the real space shuttle. So in the simulator, it starts, you know, shaking and it goes through like this simulator. And there's like a small window right to my left that I could look out and I could see everything there. Like, you know, it wasn't the best graphics, but it was, the graphics were decent. And so the spaceship starts

Starting point is 00:38:58 shaken. And I can see, and they showed me this before we started, they said, there's your speed. And it's going to be in mock, like the speed of sound. It's going to click off by the speed of sound of how fast you're going. And so we took off and, I mean, it was probably a minute or two minutes into the sequence. And it's hard for me to remember the exact measurements here. But I want to say like two minutes or two minutes and 30 seconds, we had left from Florida and we were like halfway across the Atlantic Ocean in like two and a half minutes or something like that. It was totally nuts. And so as the ship kept going in the simulator, mind you, this is in a simulator. As it kept going, I was watching the air speed. And the speed was like going pretty slow. Like you could see

Starting point is 00:39:45 it went Mach 1, then you were going Mach 2, then you were going mock 3. And the speed was going up and we were probably like Mach 10. And then all of a sudden the speed just started going like exponential because it was just like clicking down. It was like Mach 9, Mach 10, mock 11, mock 12, mock 13, 14, 15, 16, 17, 18. And it just took off. Like once we got up to orbit and we started hitting orbit, the speed just went crazy. And it just started clicking by in like what felt like just seconds, you were going another mock faster. And whenever the thing hit orbit, I don't remember what the mock was, but it was really fast. And it goes around the Earth. The shuttle at that orbit went around the Earth every hour and a half. So every 45 minutes, you had sunlight and then another 45

Starting point is 00:40:39 minutes it was total darkness. It was mind-blowing. It was the coolest thing ever. And the reason I'm telling the story is to get at the momentum piece. This thing was moving, although it was fast, it wasn't going really fast until the very end as you were just coming out of the orbit. And then everything, you went double the speed in just a couple seconds. And it was just fascinating to see the impact of what momentum looked like in that situation. It was just fascinating. But anyway, what a great story. As a pilot, now that, and I flew helicopters after this experience. And so, like, I had a checklist on my left leg and I had another checklist. One was like for my personal notes and then one was like how to fly the aircraft. For the astronauts, they had

Starting point is 00:41:22 checklists on their arms. Both arms, they had checklist, like multiple checklist on each leg. And then they had these rods that they would pull out of their flight suit. Okay, like they would unzip a portion of their flight suit and they'd pull out this rod and then the rod would extend. And then they were throwing switches because we did emergency procedures whenever I was in the simulator with them. They would start throwing these circuit breakers and switches with these rods because they couldn't reach the switches because they were so buttoned down. inside of the cockpit, it was just so fascinating to watch them go through these emergency procedures. And one other thing that was really cool was on their checklist, every page had Velcro.

Starting point is 00:42:03 Because once they hit orbit, what happens is all the pages open up and they can't keep track of what page they were on. So every single page in their checklist is Velcroed. It was so cool. It was the neatest thing ever. Now that I'm done, we're going to go back to the book. I apologize if I board people and got off topic here, but now we're going to go back to the book. No, that was a really cool present, especially for all of us. We have no clue what's going on in NASA, but just know that they're doing a bunch of really cool stuff. That's how we're able to describe.

Starting point is 00:42:31 So thank you for sharing some of the details of how the inner workings are. So one of the things you might take away reading this book is his five-step checklist of how to invite big moan or how to get momentum, if you like. So the first step is to make new choices based on your goals and values. And then the second step is to putting those choices to work through new positive behaviors. So you can almost see like how we're going through the first chapters of the book. Number three, repeating those healthy actions long enough to establish new habits. And number four, building routines and rhythms into daily disciplines.

Starting point is 00:43:13 And of course, to round this off at the fifth. step, staying consistent or long enough period of time. And the best example I could come up with here was not for me, but it was actually based on my wife, who I will now shamelessly brag about. And I think she speaks six or seven languages like really, really well, and then she has some languages on the side. And people's immediate comment whenever they hear that or anyone that comes up, which is a lot more modest about than me, by the way.

Starting point is 00:43:45 It's typically something like, oh, wow, you're so lucky that you're bombed the right talents to learn many languages or something like that. And I see where people are getting that from because they might have learned a second language in school for, you know, two years and then that's it. And they forgot anything about it. But that's not what she's been doing. So she's been extremely consistent about forming the habits. And now she's just to use one of the metaphors really gliding into orbit here. Like, whatever she does whenever she wakes up and what she does whenever she goes to bed is just to focus on learning languages. That's what she does, like preferably an hour, sometimes shorter.

Starting point is 00:44:29 But she always does something, even if it's just learning two new words. She has this saying, two cents in her piggy bank. It's just all about forming those habits. Because one of the points that Hardy talks about here is that your mind works subconsciously. And it keeps on working, even if you're asleep. So if you start your day doing what's important, which to my wife is learning a new language before she goes to work. If you do that, your mind still works. And if you do that just before you go to bed, when you sleep, you just absorb that. And apparently you just need to do that for 33 years. If anyone's interested in that. I can totally vouch for Stig's wife. She can. speak six languages. You know, you hear a lot of people say, oh, yeah, they can speak six or five

Starting point is 00:45:16 languages or whatever. And usually it's like they can maybe speak three really well. And then the other two are like, they can say hello and goodbye. But with Stig's wife, this is 100% legit. My wife's Korean. And the first time we met Stig and his wife, and Stig's wife's from Denmark, the first time we met Sophie, she just like started talking to my wife in Korean. And I was like, holy moly, This is crazy. And another funny story. We were in Korea, Stiggin myself and both of our wives, and we were riding up an elevator in a department store.

Starting point is 00:45:48 And these two little Korean girls came in, and they said something in Korean. And Stig and I just kind of looked at each other like, I don't know what they just said, you know? And then Sophie out of nowhere says something back to them in Korean. And I looked at Soviet. I said, what did you just say to those little girls? And she says, oh, they said to each other that they wished that they could talk to me. And then I responded back to them and I said, yeah, I can talk to you.

Starting point is 00:46:12 Just talk to me in Korean. And whenever Sophie said this to them, they both went, whoa, they just couldn't believe it. But yeah. And as a side note, Stig's wife also has a PhD in economics. So. Yeah. Hey, whatever I can to shamelessly break. And I just did.

Starting point is 00:46:30 So I guess that's the best way of rounding off chapter four. She's way more impressive than both of us combined. That's for sure. Oh, by far. By far. All right. So, sorry for all the stories. We're going way off on a tangent. Usually we'd like to think we're fairly focused whenever we're going through book reviews, but today might be a little bit different. But I think it kind of relates to this last one where we're talking about Stig's wife, and it's about influences and surrounding yourself with people that are going to take you to a higher level. And, you know, we had talked about this on a show one time. It was with the real vision guys, I believe. And I didn't know that this idea came from Jim Rowan. And for anybody who doesn't, know who Jim Rowan is unbelievable success author. I highly recommend anything that he writes. In fact, Tony Robbins attributes most of his start and most of his success to Jim Rowan. But anyway,

Starting point is 00:47:20 Jim Rowan evidently said, you need to figure out who you spend most of your time with, the top five people in your life that you spend the most time with. And understand the good attributes and the bad attributes of those people. And more importantly, before you identify who those five people are, you need to think about who are five people that you really admire and why. And then you need to marry those two lists up and you need to determine, are these people that I spend most of my day with, do they have the same characteristics of the five people that I admire? And if not, why? And whenever you can kind of come to that analysis and you think, well, why am I hanging out with this person who makes fun of me every time I'm with them and who encourages me to do these

Starting point is 00:48:13 habits that are not good habits? Like, why do I have that person in my life? And what can I do to slowly start moving away from that person and attracting another person into my life that is going to take me to where I want to be and who I want to become? And the way he explains this is he's saying you should ask yourself who you friends really are or who you surround yourself with. And then you should categorize them as either an engine or an anchor. So is it someone who is pushing you in the right direction or is that person holding you back? And then you have to make the hard choice of taking out quite a few people who is not good for you.

Starting point is 00:48:55 Unfortunately, he didn't come up with any good formula of how to do that. I think that would be actually a very interesting thing. But I think we can all find people in our lives that does not have the proper influence on us. And sometimes we allow people to take us down that we shouldn't. So if we talk about something like health, you know, you might go out and you might be eating very unhealthy food and you might be getting quite a few beers. And that's probably fine. And you'll be like, yeah, this is just happening once. But there are two problems with the first one is you lose momentum, which we talked about before

Starting point is 00:49:31 when you do. The other thing is, if it happens way too often, if that's happening with all your five best friends and you're meeting often, how will you maintain that healthy lifestyle? Or if you're meeting up with coworkers, coworkers who are holding themselves and you back, and all you're talking about is all the things that they don't like about the company, it's never a conversation about how to advance in the company or how to improve yourself. So it's just all those small not just not the big things, all those small choices of who you surround yourself with that results in the big things at the very end. So I guess to me, that was my

Starting point is 00:50:09 key takeaway from chapter five. I think it's important to also say that some people will maybe make the excuse that, well, I don't have access to insert, name it, whoever you, you would like to bring into your top five. I don't have access to that person. And what Darren Hardy talks about in the book, he says, you know, Jim Rowan for me was one of the top people, most influential people in my life. And he says, my interaction time with him was just a couple meals together, a couple random occurrences where we were doing an event together. But outside of that, I really had no other interaction with him at all. How I became so close with him as I've read his material so many times and I've studied his material so much that he basically became one of my top five because

Starting point is 00:50:59 he has inserted him through media, through books, audio books, whatever into his life. And so I think that that's really important for people to think about that if there is a person you want to bring into your inner circle and you, there's no way you're going to get access to them, you can still do it by reading or reading or listening or whatever that is and make that a daily habit that you bring that into your life and you can still have that kind of access. At the end of the day, you attract good things in your life and you also attract bad things in your life.

Starting point is 00:51:31 And if you don't meet the right people, I would say it's 100% your own responsibility. There's this saying that it's not about making a million dollars. It's about becoming that person that's required to be a millionaire. that's the important thing. So what Darren Hardy says in the book, and this is an exact quote that he says, and I think this is such a good quote. He says, if you want to have more, you have to become more. Success is not something you pursue.

Starting point is 00:52:02 What you pursue will elude you. It can be like trying to chase butterflies. Success is something you attract by the person you become. So what he's saying is if you want to attract successful people into your life and whatever you define success as, you have to start with yourself and start changing yourself so that you can become that way and then those people will be attracted to you, not the other way or out. If you go out and you try to basically capture those people and pull them into your life, it'll never work.

Starting point is 00:52:36 All right. So in general, I really like this book. And I think that this book is for the person. If you're young, if you're in your 20s, I think this is a really, really important book for you to read and probably read twice. It's simply because of all the books at Stig and I have read, I think that this does such a good job at summarizing a lot of the key points of like some of the critical factors that we've uncovered through all these books that we've read, and you kind of get it all in one small little 150 page book. So I'm a very big fan of this.

Starting point is 00:53:10 I think that Darren Hardy did a great job writing this and it's very concise. It's right to the point and hits the stuff that's really important. And if you take this book and you actually do the stuff that he says in this and you focus on working on your habits, listing out what your goals are and like working towards that a little bit at a time, man, you're going to see such big results. This is going to be such an important book in your life if you take the time to read this. So I really like this book. I give it definitely two thumbs up for sure.

Starting point is 00:53:39 I think like if there are two things you will take away from this book, it should be always take 100% person responsibility. Always, always, always, especially when it's not your fault. That's the time when it might seem the dumbest are most unfair, but that's really the point in time where you should take 100% responsibility. And the other thing is consistency. Now, that's not the same as not creating something that is horrible, a toxic relationship, for instance, but consistency of something you know that is completely aligned to your values and your goals. All right. So that's all we really had for the book. So I hope you guys enjoyed the review of the compound effect. Go ahead and check out the show notes. We'll

Starting point is 00:54:19 have some of our notes in there. We'll have links to the book if you forget. And we'll have everything there for you. All right, guys. That was all that Preston and I had for this week's episode of The Investors Podcast. We see each other again next week. Thanks for listening to TIP. To access the show notes, courses or forums, go to theinvestorspodcast.com. To get your questions played on the show, go to AskTheinvesters.com and win a free subscription to any of our courses on TIP Academy. This show is for entertainment purposes only. Before making investment decisions, consult a professional. This show is copyrighted by the TIP network. Written permission must be granted before syndication or rebroadcasting.

We Study Billionaires - The Investor’s Podcast Network - TIP182: The Compound Effect by Darren Hardy (Business Podcast)

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