The Compound Effect
Gresham Financial Book Club Series
Welcome to the Gresham Financial Book Club! In this blog series, we’ll cover the books that were instrumental to me when starting my business — and many of them have nothing to do with accounting.
Whether it’s growing your business, improving your health or making smarter financial decisions, these books can help you live and work better. They shaped my personal and professional philosophies, and I think you’ll find the lessons as valuable as I did.
Our first book is “The Compound Effect” by Darren Hardy. While the whole thing is full of relevant information, in this post, we’ll cover the chapter that most impacted me: chapter five, “Influences.”
To join the Book Club, read and share your thoughts on social media (@GreshamFinance)!
What is the compound effect?
The “compound effect” describes making small investments into different areas of your life that, when compounded over time, have a powerful impact. It’s like the financial concept of compound interest.
Even saving as little as $5 a week can turn into thousands over time — but if you wait too long to start, it can be hard to catch up. Similarly, making small investments of non-monetary resources, such as your time and energy, can exponentially improve your future.
Be aware of your influences
I believe in the power of influences, and so does Hardy. The people you read from, listen to and surround yourself with have a huge impact on your thinking and decision-making. This includes everyone from social influencers, podcast hosts and motivational speakers to your co-workers, friends, and spouse.
Hardy stresses the importance of having a “board of directors,” or network of trusted advisors, for each major area of your personal and professional life: one for family, finance, career, personal development and so on.
Why? The choices, habits, and momentum that are best for you as a business owner are often different than those that best support your health, friendships or family. Each area involves different priorities, goals, and mindsets, with a different path to success. Hardy explains how to leverage these boards to get the advice you need when you need it — from the people who know you best.
Don’t spend a lifetime on a three-minute person
Time is arguably our most valuable resource, and it’s one we often overlook. This chapter encourages you to think critically about who you’re spending your time with and what roles they serve in your life.
Hardy describes five different types of people: a three-minute person; a three-hour person; a three-day person; a person you’d take an extended vacation with; and a partner for life. You can have an important relationship with someone of each type — but if you’re spending a lifetime with a three-hour person, you might be on the wrong track.
When you’re compounding the interest gained through positive life decisions, you have more capital to give back, whether that’s financial, emotional, energetic or in terms of time. Through the positive flow of giving and receiving, you can have a happier home, build a better business and live your best possible life. But don’t take my word for it; check out the book today.
Want to learn how to build a better financial future to support these life goals? Set up a free consultation with me at Gresham Financial.
Isaiah Gresham | 07/06/2020