The Digital Nest Egg and the Power of Compounding

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I’ve been thinking about how much the practice of building a digital nest egg and building a retirement nest egg have in common. This comparison was first presented to me by a client, and I was just mad that I didn’t think of it myself :). However, it’s a great analogy.

Building a digital nest egg and a retirement nest egg both require an ongoing investment and a long-term perspective to achieve the end goal.

When you develop a retirement portfolio for a client today, you typically create an investment strategy that is mapped to the client’s long-term retirement goals. To successfully achieve the goal, most likely you’ve allocated the assets properly and adjusted for your client’s risk tolerance.

In addition to building the foundation for the nest egg, you probably also guide your client to continue to invest in their nest egg on a consistent basis, and re-balance the portfolio as needed.

Consistently adding to the investment portfolio helps the client to take advantage of that magical principle that we call “compounding”.

Invest early and invest often.

There are uncertainties to navigate with along the way with the retirement investment strategy such as portfolio volatility, interest-rate risk, political and economic events. There are also taxes and inflation to contend with.

Helping your client stay on track to achieve their desired goal with the least amount of risk is critical to the process. You as the advisor clearly understand the challenge of keeping clients invested and focused on the goal through all the ups and downs.

You also understand that the client is not going to see immediate results. Investing for retirement is a long game.

The Digital Nest Egg

Your digital nest egg needs a strategy that is mapped to your goals as well.

Your digital assets (website, blog, content, social media profiles, email programs) need to be properly allocated and optimized to mitigate risks and create the most linear path to success.

Compounding works for your digital nest egg too!

If you build your digital portfolio but don’t add to it consistently and re-balance as needed, chances are you’re not going to achieve your goal.

Add content to your digital portfolio

The core of any powerful digital nest egg is a blog. Without the blogging component, you have nothing to add to. Your professional financial blog serves as the core of the digital portfolio. The blog provides the opportunity for the ongoing investment of content, and it’s the digital asset that you have ownership and control over. (You can’t own your social media channels, you can only rent them)

Your blog content will be publicly discoverable and accessible 24/7 online and on any and every mobile device. Search engines and social networks value FRESH content.

To successfully add to your digital nest egg and experience the effects of compounding, you need to add fresh content to it consistently.

Don’t add packaged financial marketing content developed by marketing departments or stock article libraries! Learn how to develop and add unique, useful, personalized content to your blog that your ideal clients can learn from and benefit from.

Unfortunately, there is not much power in a handful of blog posts.

In order to leverage the power of compounding, blogging has to be an ongoing practice. It’s both an art and a science. It requires constant optimization and improvement (similar to re-balancing that investment portfolio)!

You must also market your content to make sure that it gets consumed by your ideal clients.  Developing a trusted community via social networks will ensure that your blog content gets greater visibility. You will also learn from your community whether or not your message is on target.

It’s the compounding effect of blogging that makes it such a powerful force in growing your online visibility and influence.

Don’t Give Up

Anyone who blogs consistently will tell you that the results are invisible at first. It takes time to cultivate a following and a loyal community of people who can either become your clients or become advocates for your business.

Over time, your digital nest egg will become a powerful asset that pays dividends in ways you can’t even fathom today.

The longer you wait to start building your digital nest egg, the more expensive and difficult it will be. We’re already seeing this in social media. No longer can you simply post updates on social networks and get visibility or engagement without a paid strategy.

Invest early and invest often.

Most financial bloggers will give up before they ever see the benefits. Then again, most won’t build a digital nest egg through unique content because it’s hard to do.

Would you tell your clients to throw in the towel on their retirement nest egg? Would you tell them to stop adding to their portfolio on a consistent basis? Would you tell them to bail when the markets swoon and all hope is lost? Would you tell them to focus on short-term performance?

No, you wouldn’t.

There is 100% certainty that by investing in your digital nest egg, you will have a better probability of achieving your long-term goals than doing nothing.

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About Stephanie Sammons

Stephanie Sammons is the founder and CEO of Wired Advisor™. She's been named one of the Top 25 Social Media Experts You Need to Know by LinkedIn and a Top Financial Industry Blogger by RIABiz. As a CFP® and former 15-year financial advisor, Stephanie combines her "in the trenches" industry knowledge with her extensive digital marketing experience to teach financial advisors how to win and keep clients in a wired world. Follow Stephanie on Twitter and Google+.

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  • http://justinbrand.com.au/ Justin Brand

    This is a great analogy for advisers. My blogging journey has only really just started (http://justinbrand.com.au/blog/ ) but I’m already finding other benefits in addition to creating a set of content to be used as a resource and to attract search engine traffic.

    By practicing writing every day, you find your voice and authenticity (I’m all about Steven Pressfield this week, after reading Turning Pro and Do the Work – highly recommended for advisers starting to blog).

    I once remember hearing a blogger (maybe it was Michael Hyatt) say that when he was asked what he thought of something, he answered that he didnt know as he hadnt written about it yet. Putting your thoughts in writing and publishing it on the net for (potentially) all the world to see does make you research and refine your ideas. Not just the ones you write about, but the ones you communicate to clients every day.

    • http://www.stephaniesammons.com/ Stephanie Sammons

      Thanks so much for sharing, Justin. I absolutely can’t say enough about Steven Pressfield and his amazing book “The War of Art”. Life-changing isn’t it?

      • http://justinbrand.com.au/ Justin Brand

        Agree – I just started reading War of Art last night.

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