Over the past 10 years, we’ve been living in one of the best stock markets in history. The stock market is close to an all-time high as I write this.
When I started investing in 2010 I recognized that the way to build wealth wasn’t just compound interest, it was accelerating the rate of compounding.
The primary message of my first book was to invest early, often, and as much as you can. While the early and often help, it’s really the as much as you can that makes the biggest difference.
Why? Because it creates The Flywheel Effect.
While he didn’t invent it, Jim Collins popularized the idea of the “flywheel effect” in his book Good to Great. Using this principle, he explored how consistent, well-aligned actions, when repeatedly executed, can lead to significant business growth and success.
Once the flywheel starts turning, you need to apply consistent effort to keep it moving. Over time, the cumulative impact of these consistent efforts starts to compound.
As the flywheel continues to turn, it gains momentum and becomes increasingly efficient.
At a certain point, the flywheel becomes self-sustaining and generates its own momentum.
It requires less effort to maintain the same growth rate as it did during the initial push. As the flywheel spins faster and faster, the business can achieve accelerated growth and success. The energy generated from earlier efforts contributes to this increased momentum.
If you would have invested $1,000 on the day this newsletter started in May 2015, even with inflation so high the past few years you would have the following today:
- Nominal Return: $2,371.05
- Nomial Return with dividends re-invested: $2,772.50
- Inflation adjusted return: $1,823.26
- Inflation adjusted with dividends reinvested: $2,130.38
It’s never been easier to invest, just like it’s never been easier to create and consume content.
The way we consume content evolves every time a new technology is introduced.
Ever since Gutenberg invented the printing press, each of these technologies has allowed content to spread farther and faster than before.
At the same time, it has allowed more people to create and share their content.
Few among us argue that increased access to more information is a bad thing. I definitely wouldn’t. Without the internet, I would never have been able to achieve Financial Independence or become an entrepreneur.
Google, YouTube, social media, and online communities provided the tools and information I needed to build a business. The opportunity we all have is incredible.
But because anyone can create content, content has become less valuable.
There were one or two trustworthy sources for a particular type of information in the past.
They gained a reputation for quality content and information that allowed them to stay relevant for generations. In some cases, they still exist; think of properties like The New York Times, National Geographic, or Mastering the Art of French Cooking.
Consumers still respect these sources because of the quality they committed to long before we were born.
Today, it is much more challenging to create a brand that lasts because:
- there is so much more competition
- trendy content tends to spread faster and is easier to create
- most people have a short-term mindset
Think of breaking news. You can still read a story at a legacy paper like The New York Times or The Washington Post, which charge money for access to their reporting.
Or, in most cases, a quick Google News search will return thousands of results for the same story on any number of outlets.
In this environment, it’s not the most quality story that attracts the most attention; it’s the one that gets out first.
Or take TikTok. More young people report wanting to be social media influencers than any other profession. They all have the opportunity, but at what cost?
The nature of TikTok is that it is ephemeral. You must constantly and consistently produce timely content to attract an audience.
Your videos can live forever, but your audience can only grow if you keep creating.
How many TikTok videos produced in 2024 will we be watching next year? Let alone in twenty years?
If you want to build a business or a brand that can last and allow you to achieve the true freedom that comes from not having to trade your time for money, you need to make your content work for you.
This is true whether you run a media business, like I do, or if you run a product business.
You need to create a message that sticks, lasts, and can spread from person to person without you having to do anything.
The longer and farther your message spreads, the more viable your business becomes.
This is part of The Flywheel Effect.
When you create evergreen content that continues to appear in Google or YouTube searches and that people continue to share–even long after you’ve actively promoted it–you create a Flywheel Effect in your business. This is where sustainable growth comes from.
When I started Millennial Money, my first posts were about big-picture topics not linked to any specific technology, headline, or trend.
Even today, a huge portion of the traffic to that website and the money I make comes from ten posts I published over five years ago.
I also still get editors and producers from national media outlets who reach out to me because they read my story. It’s still doing work for me now almost 10 years later.
People still find this content because it’s still relevant to their lives. I did that intentionally.
I have never been interested in chasing the next trend or trying to go viral. It’s not worth the energy and doesn’t correlate to long-term success.
Focus on the timeless and human. Lean into your story. It’s your competitive advantage.
It is tempting to follow the crowd when you’re a new entrepreneur.
You hear stories of people making tons of money in a short amount of time by capitalizing on a trend or opportunity. But what you don’t hear is what happened before or after.
Ninety-nine percent of those people either never made that much money again or have to grind themselves into the dirt to keep chasing the next big thing.
That’s not freedom. It’s just another way of trading your time for money.
I encourage you to check in with yourself and be honest: What are you creating that lasts?
If you really love trend spotting and cashing in quickly, that’s fine. But I imagine if you’re reading this, you’re likely not one of those people.
You want space in your life; you want to make money without thinking about it all the time; you want to create a business with momentum that you can ramp up or down at any time.
What’s your flywheel?
