MMA discussion on the theme of the book - The Compound Effect - Part 1

0:00Thank you for being on the podium, okay, start on, yeah, please. Thank you, MMA and Group Captain Vijay Kumar and Group Captain Venkatraman and the entire team for giving us this opportunity and I am always blessed to be here because it gives me the purpose to read a book, internalize a book and then kind of share it among all of you all. Also, I want to thank Ram Ki and Sandhya, my panelist for today. We've taken time to read the book so that we can dwell into that book in your midst. I've often wondered what differentiates say somebody like an Elon Musk and maybe some of us here,

1:10or most of us here. Does he have more hands than we have? Is he physically involved with something more than what we have? Is his brain twice the size of any of what we have? Or is there something that he possesses? Is there some secret that he has learned to unlock which we are still kind of on the journey? And I think that's what I am constantly in search of. How do we become better? And in that journey, I chanced upon this book, the title actually hit me in an airport lounge. I'm a chartered accountant as you would have seen during the course of Irona Financial Consultancy firm. So compounding is something that comes quite naturally to us. We're all constantly in the realm of compounding. But our compounding

2:14so far that I have understood is mostly in numbers in money terms. So we've constantly been talking about compounding of wealth, compounding of whatever, whatever, whatever. But when I stopped read the book, I found that he was talking about money too, but that was a very, very small component. And his concept of compounding was way beyond just wealth. So I picked up that book and I'm glad I picked up that book. But before I dwell into the book, I'm going to, I have a small five minute introduction which I will do, then I will take the panelists on board. Darren Hardy, as we speak today, is a 54 year young individual. He's an American author. He's a multi-millionaire, made his money through keynote speaking. He's an advisor to some of the most successful

3:15corporate executives in America. He's a former publisher of a magazine called Success. And he's a New York Times bestseller. He's written apart from compound effect. He's written a book called the entrepreneur roller coaster and leaving your best year ever. In compound effect, Darren Hardy argues that very small but consistent actions multiplied over reasonably long periods of time provides quite an extraordinary result in any area of work. Like I said, I largely imagined this from a monetary perspective, but the book is all about non-monetary aspects of how one can become much better in what they are doing, what they want to do in life. Provides practical ideas across a wide variety, I'm going to give a quick glimpse about

4:18what this book is all about. That no way kind of precludes you from please buying the book, please do buy the book. It's an excellent book to read. He says the choices that we make determine the destiny. And he's not talking about big choices. He says small choices that we make quite unconsciously on a day-to-day basis can eventually become a very large, for instance, if we are used to having a mid-morning coffee every day, he says, if you want to get into good health, if you knock off that mid-morning one coffee, which is quite inconsequential in any of our minds, he says, over the next 10 years, you will see significant difference in your health. Unfortunately, what many of us do is we avoid the coffee for maybe a couple of days and then go away ourselves again and say it's not working. So coffee is not the reason why my weight is not

5:22losing it. So he says small decisions, small choices are very, very important. When you make whether it's about health or money or a relationship, they compound over a period of time quite dramatically. So the thing to remember is you have to give time. He says habits are the engine. Good habits will propel you to great success over a period of time. Bad habits will do exactly the opposite of that. Habitat is nothing but a thing that you repeat quite unconsciously. You don't need to even think about it. It happens quite. Third, he talks about momentum. He says, can you do this action in a disciplined manner? We're talking about good health. January is coming up. I have a friend who runs a gym. He's super

6:22excited because he says we have a record number of people who will run in between the 25th of December and 5th of January and pay their annual subscription. And after the 15th of January, 90% of them will never see them again till the next December. So he's super happy with and he once told me I wish December came a couple of times a year. Gumentum is the ability for something to happen with discipline day after day after day. Can you do rain or sunshine and the author portrays a beautiful story of himself, his father, the coaches who run some of the most successful sports events in America. Michael Phelps, beautiful example of how over a 12-year period Michael Phelps talks about a 15-minute

7:24break that his coach gave him. You know, in 12 years, he can only remember that I'm so thankful that my coach gave me a 15-minute break and so significant. And that's why he won 28 swimming matters in Olympics. 28 matters. I don't I don't think there are countries which are 128 Olympic matters. One man, that's the power of discipline which builds because it leads to momentum. And of course, we all have heard this. Show me your friends and I will show you your destiny, right? We are the sum total of the five people who we hang out with. Hang out with smartest of people, you yourself will turn smarter and that's so important. Our forefathers have been smart about it. He talks about the same thing. And he says, please take responsibility for your life. We are 100% responsible for our life. If 536 o'clock this meeting has to start, we have to be here.

8:32Mountrode is very rhombotraficar is a mountrode or it's raining. It's why he says, if you take responsibility automatically, your mind, your unconscious mind starts taking over and tries to work in a manner that you will succeed in life. If you're used to finding excuses, he says, your mind will also relax. So take responsibility, be consistent. And last, he says, true success comes when you hit the wall. In a parlance of marathon running, a wall is something that is quite insurmountable. If you know a 42 kilometer marathon run, usually the runner shouldn't have a problem till about 30-35 kilometers. They will manage even the best of runners. Around that time,

9:32they will hit what is called a wall phenomenon. The body physically will give up. We'll say, I cannot run anymore. They are only powered thereafter for the next, say 7 or 10 kilometers based on their mental strength. Their mind pulls the body back in moves on. And the author alludes to that saying that, can you accelerate beyond that point? Can you run beyond the wall? And that's where true success lies. An Elon Musk is a true proponent or the exponent. I mean, I'm not trying to exaggerate one individual, but I still remember when COVID broke out. And there was a lot of questions whether Tesla will and Tesla went through two quarters of very, very weak sales and deliveries. And they had a lot

10:32of problems in the factory. And then COVID broke out and people wrote off Tesla. They said, this organization is dead because they're going down the tube. And now with COVID, shipments have stopped. Supply chains are affected. They are going to go down the tube. What did Elon Musk do? Elon Musk built a room with a glass wall right in the center of the factory. And for the next nine months, didn't order that place. He sat, he slept, he worked out of that one room for the next nine months, made sure that Tesla moved back up to where it needs to be. So that's the wall that one needs to overcome. That's the commitment. That's the passion that one needs to kind of embody. And just giving this as an example, all in all a fantastic book

11:36in terms of giving this whole concept of how do we become, move to the next orbit of what we are seeking to be in terms of whatever we are, efficiency, money, relationships, all of it can move there. So that's what this book is about. I'm sorry for a little bit elaboration on this, but I thought it's good to get the context, but I'm going to go over to the my esteemed panel who I'm here, and I'm going to ask them. And I always, this session is not about reproducing this book. This session is about understanding the book from each of their rich experience in life. So, please help me as I invite them to. Sandhya is a fabulous motivator, come coach, come articulator. So I learn a lot every time I meet her

12:47and I interact with her, which she comes with rich experience. Thank you Sandhya for being here. And if you could give us your views on this book and your initial thoughts, then I will take it from it. Thank you. Honestly, I'm not a visual person. I'm an auditory person. I hear a lot than I read a lot. Since the book came from Babu and Babu always does and things only good for me, I truly believed there is something in it which Babu wants me to understand and learn. So I read the book thoroughly, all the six chapters including forward, preview, conclusion, index, everything, all in all. It was a fabulous book. Please, and this is coming from a person

13:48who does not have the habit of reading, but only hearing book. It's a fabulous book. The one thing which I want to share when I read the book, it truly resonated. It connected with certain experiences that I had. See, I'm a qualified dentist. I'm a dental surgeon. I did my bachelor's in dental and master's in dental surgery. In the bachelor's panel mode, there's a first year. After 12th, we join college. There is an exercise which is called you need to carve a tooth out of wax. I need to carve a tooth. A highly fine skill we need to use a sharp carver and we need to carve the tooth in a block of wax. And I was pathetic in it. I am not a creative person. By consequence, I joined the industry.

14:57The time always I will submit it late. I used to feel so scared of carving. I used to take three halves to carve a tooth on a single block. Exams were coming. Exams was in October. That time allotted was 45 minutes to carve a tooth. That was the time allotted for the exam. It was June and the exam was in October. June, July, August, September. I was a bright student. Otherwise, I was scared whether this practical of tooth carving will put my mark down. I didn't know what to do. I just asked my mother, my mother is a music teacher, Vina teacher. When they come for music class, she just doesn't start with the the day's lesson. She revises the entire fundamentals from Sarli Varsaydaat to everything,

16:00every class and then she goes. And I grew up seeing this that she revises everything, every class. I just picked up that June to September. Every day, I dedicated 20 minutes to sit and carve the tooth after I come back from college. That is it. I didn't analyze the results. I didn't see whether the tooth was beautiful. Nothing. Only 20 minutes, I dedicated to carve the tooth and I was able to complete the tooth carving in the 45 minutes during the final exam. So when I read the book, I found a similar experience which I have experienced during my college days and I'm talking about way in 1997. Don't guess my age. It was in 1997. So it is a very close experience which

17:02showed me anything you repeatedly do it regardless of how many hours, even for five minutes, 10 minutes, you repeatedly do it. It's 100% sure shot. You're going to be successful. So that message was coming out from the book like a flower blooming. It just the message was throwing it up. So a very strong message for the student community why nothing is considered to be hard. Nothing. We don't need knowledge. We don't need talent. We don't need great, great skill. The author says all you need is consistent practice every day regardless of how many minutes consistent practice every day you beat talent, you beat skill, you beat degrees, you beat the

18:04global competition and she says consistency is the tool. So the word that I pick up from the book is consistency. Thank you, Babu. Yes, Ramki, your thoughts on the book and your views. First of all, thanks, Babu and thanks, MMA for this wonderful opportunity. Incidentally, in the month of October, I was addressing a seminar and I got a gift. The book was compound effect. But as usual, I just kept it. I thought, no, I'll read it some other day when I'm traveling extra, but that didn't happen. But last month when Babu called up of some divine sources saying, go and Ipohad Padra, that kind of thing. So it's a great book. Really, a lot of things we read about habits. There are great books on habit, but this is the simplest one what I could be able to see.

19:11Just 150 pages also. As Babu said, clearly described, mostly it is a kind of story book. You will never see that as if you are doing something on the in terms of reading a book with so much of lectures or impractical things. All you could able to see is start with some kind of inspirations, etc. What I could able to sense is some we could able to as Dr. Sandhya has said, most of the thing we could able to resonate. In our life, we could able to resonate a lot many things. Some of the things, what it gave is a kind of, we can say, eye opener. This we were doing it. Now, probably I've left it when I reached a place, but a book talks about a particular restaurant which do great amount of business because of the hospitality of the

20:16team as well as the manager or the head. They lose that in a period of 18 months time. Just know loss the entire thing and become zero in 18 months time because that focus, that attention, what made them successful, that has completely gone out. That's something immediately stroked. There are some elements which we have innate in us, which takes us to the stage where we reach a particular point. We say we can qualify to be called as successful, but thereafter we lose that momentum. One, it gave us that alarm and something which could be able to resonate. That is something which I would like to know safe. In 2016, when GEO launched their services in India, one of my friend came and said,

21:18friend, why don't you look at their prepaid services? I was using postpaid. I was having two simplates, one for general usage and the other one for data, particularly for data, both were postpaid. And I said immediately my response was like that, prepaid that is not for us, just someone who is there, he uses just like that, prepaid may not be qualitative also, the signals may not be good. Why don't you try? I just kept quiet, but every day I reflect my conversations during the day. In the night I was thinking, yeah, the idea sounded good, so I went and checked their offers. I was paying about 1200 per month per plan at that point of time. What the prepaid plan costed was, little less than 200 per month. I subscribe for an annual plan

22:20for one of the simplates the next day. The financial planner in me woke up and he said that go and use that extra thousand rupees instead of spending just start a SIP, systematic investment plan. Just went to do that thing. In six, seven months I got more interested, I changed the other plan also, just went to do that thing. Now, this is my 10th year, I am just completing that SIP. I had, I have other SIPs, but just this is 10 years. My contribution net, contribution revenue is something close to 1.86 lakhs today. The value of that SIP is today 4 lakhs. I just noted that SIP as geo SIP in my portfolio. It is geo SIP, because many a thing I say, no, this is for my wealth, this is for my daughter's marriage, this is for my retirement, etc., etc., I put my goal, but this is geo SIP. This wealth is not mine, given by somebody,

23:27I just use that opportunity. And today, that story I could able to resonate that the opportunity is there with you. All you have to do is, you have to be prepared, you have to be, wait for that opportunity and you have to put that action, you have to take that action, that gives that result, which is radical, which is super natural, that is what we can call it. Thank you. Thank you. Often or non, one thing that stood out for me and I just wanted to share that learning out of this book is that whenever we see meet people, we make a decision. And in today's day and age of Zepto, where everything we want in five minutes, so we want

24:30whatever we want, we want it instant delivered. Now I've seen this and I've been equally person at this. So we get into an elevator and the elevator is designed to close in five seconds and you get in and you find that there's nobody else in the elevator. You will press the close button. You know, the elevator is designed to close in the next four seconds, but we don't have patience even for that four seconds to wait. So we go press that close the door button. All of us do. So in a scenario of that nature, the author alludes to scenarios and I kind of try to dramatize and think about what the alternatives are. So he says, there could be two individuals, one individual is reasonably knowledgeable. He's doing his vocation. He is asked to do one additional hour of work for which he will be paid 5,000 rupees every month. No additional knowledge needed,

25:39no additional capabilities need to be built. He will be paid that 5,000 at the end of the month. There's another person who is asked to spend that one hour every day for which he will need to keep upgrading his skills. Like many of us, right? Many of us in the last 12 months, 18 months have started trying to figure out what this AI is, what this chat GPTS, what this publicity is, right? So we're using a little bit more of our graces and updating ourselves, moving hopefully learning the new ways of what to wear this. So the second guy, second option given is you've got to constantly upgrade, constantly work more, use, learn more and use more. And for which that gentleman is given 10 rupees per week, okay? 5,000 per month, 10 rupees per week.

26:49And I'm asking you this question, as a rational human being, which option would you choose? All of us will choose the 5,000. Don't tell me the 10 rupees option, right? But I'm going to read the numbers for you as it goes. The only thing, only trick is because the person on the other side 10 rupees is upgrading himself. So his rate of earnings are going to go up at the rate of 10% every week, okay? That's the thing I didn't tell you. But even then, I think 90% or 99% of us will choose because 5,000 yengge 10 rupees per week. If 5,000 is per month, 10 rupees is per week. But I'm going to read the numbers for you so that you start understanding why compound effect is a very important concept to think about the next time you make a financial decision, non-financial decision also. So in this event, at the end of first month,

27:55a 10% compounded 10 rupees becomes 51 rupees at the end of month one. And his friend, who has chosen the other option, has walked away with 5,000, right? So now the family is thinking, oh, this guy is a loser. 51 rupees, where is 51? Where is 5,000? Month two, the 51 rupees is moved to 126 rupees. His friend has made 5 plus 5, 10,000 rupees. So still a loser. Month three, 126 is become 235 man, he has taken a raw deal, no way. His friend has got 15,000 on the other end. Goes on month on month at the end of 12 month, his friend has made 60,000. But thanks to a little bit of compounding, this option two person has 15,541 still looks like a bad deal, right? But at the 16th month, the friend has 80,000

29:07rupees. And the option two person has 86,000 rupees, almost the same, same money. 24th month, option one, the guy who's collecting 5,000 rupees every month, has one like 20,000 rupees. Can anybody guess what the second person will have in a sketchy? Yeah, any, any other guesses? 22 lakhs. So that's what compounding does. Many at times, because we as human beings have this urgency for quick results, we take decisions that benefit us in the very, very short term, not necessarily looking at the long-term effect. And many of these long-term effects can be quite

30:14extraordinary. And this book to me was a wake up call of such nature that if you're willing to invest and not concerned with immediate benefits. I don't know whether you heard of this Marshmallow experiment. This happened in the US where small kids, five-year-old kids were given sweets that they could eat. But if they could hold off eating the sweets immediately, five minutes later, they would be given one more sweet. They would be left to themselves. And if they're able to hold on to their urge to eat that, they would be given one more sweet. And the Marshmallow experiment continued for many decades, almost 80 years, eight decades it continued. And one of their findings is that kids who had the ability to hold off were the willpower five-year-old kids.

31:18We're not talking about others, five-year-old kids who had the ability to withstand the temptation of eating that Marshmallow for just five minutes made bigger success in life than kids who immediately grabbed it. So the point which I'm trying to make is that even a five-year-old kid, the journey of life, the trajectory of choices that one makes even at that age kind of matters. But I'm going to pause here and get Sundya again here and tell me one or two topics out of the book or this thing about the book that you think resonates and contrasts with current learnings that you have. One particular topic that really contrasts from today. I do a lot of programs in institutions for college students and 11th, 12th students I've been doing.

32:25The author says to start a task you need motivation. Continue the task you need only discipline because the motivation is like a spark. It fades away. It goes off. How do you continue the task for which you need discipline? So that's a formula he says. The formula what the author says is for any task. Say for example in the case of a student who decides to study a particular topic he needs to decide decision which comes as a choice. He can choose to study, choose not to study whatever it is the decision taken. The right decision taken will accumulate to give the right behavior. He takes the book, he opens the book, he focuses. So the right decision will lead to the right behavior.

33:32Heated right behavior will become the right habit every day at 5 o'clock. He takes the book, opens it and it becomes a habit. Habit is a behavior where you don't put any effort voluntarily. It is automatic. It becomes a habit. Repeated habit it becomes the second nature of the person and that decides your destiny. So this is the formula right decision which becomes the right behavior that turns into the right habit. If consistently we follow the right habit your future is secured, you are definitely you are having a success. So this is the formula. So when I go to 11th, 12th class students the one question which they ask us when the school reopens we are very happy I take the book and study. But when they still some test yes I get motivated and I study. When the exam is

34:37nearing that fear of exam yes I study but in between in between the test in between one exam to another exam I am not motivated to study. What would I do to study where because they don't study only when they have continuous pressure they are motivated to study otherwise they lose this habit of getting into study where I find a beautiful solution or an answer that the author says and that is called the why power the why power why do you want to study why do you want to do this job why do you want to practice charted accountancy why do you want to be a photographer why do you want to run MMA when that why the purpose if it is very deeply clear strong then you don't

35:40need external motivation the fire is automatically inside the one wonderful lesson if you Babu has to ask me when you take a decision or a habit separate your feeling from it and your your and your your your running. Babu has to ask me when you take a decision or habit separate your feeling from it and your your