“Compound interest is the eighth wonder of the world,” Albert Einstein once remarked.  “He who understands it, earns it. He who doesn’t, pays it.”

1: Author and speaker Darren Hardy hired Kathleen as his assistant.  After hearing Darren speak at one of his workshops, she told him: “I heard you talk about saving 10% of everything you earn.  That sounds nice but I could never do that.  It’s totally unrealistic.”

She was making $40,000 a year.  By the time she paid all her bills and financial obligations, there was nothing left at the end of the month.

Darren offered to work with her, he shares in his book The Compound Effect

Her goal for month one would be to save 1% of her monthly income, or $33. ($40,000/12 = $3,333. 1% = $33).  She opened a savings account where she would begin depositing her savings. 

He began by teaching Kathleen how to track her spending.  After the first week, they reviewed what she had spent. 

Kathleen decided to bring her lunch one day a week instead of going to the deli in their building.  In month one, she deposited $33 into her savings account.

The next month, her goal was to increase it to 2% which she achieved by changing her cable service, an additional savings of $33 a month.  In month two, she deposited $66 into her savings account.

The next month, she decided to buy Starbucks coffee beans at the grocery store and make coffee at home rather than go to Starbucks twice a week.  

By end of the year, she was saving 10% of every dollar earned without noticing a significant change in her lifestyle.
Kathleen was amazed.

2: As often happens, a change in one area of life impacted other areas as well.  Kathleen calculated what she was spending on mind-numbing entertainment and began investing in her personal growth.  

After feeding her mind with several hundred hours of inspirational content and learning, her creativity started to soar.  “You become what you read,” the saying goes.  

Kathleen approached Darren with a proposal.  She was convinced there were opportunities to save money inside the organization.  He agreed to reward her with 10% of the money saved and 15% of new revenue.

By the end of her second year, she was earning more than $100K.  Eventually, Kathleen started her own business and now has over $1 million in assets.

3: The compound effect, Darren tells us, is the principle of reaping huge rewards from a series of small, smart choices.  
The key?

“I’m the world’s biggest believer in consistency,” writes Darren.

Small, smart choices + consistency + time = radical difference in our lives.

Reflection:  What is my most important goal right now?  What is one small action I will commit to doing consistently over time?

Action:  Do it.  Today.

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