From: alexhormozi
Goodwill, defined as positive sentiment and influence over a person’s behavior, can compound significantly faster than money itself [00:06:33]. This concept highlights a strategic approach to wealth accumulation and business development.
Nature of Goodwill
Goodwill represents having a positive sentiment and a degree of influence over another person’s behavior [00:06:37].
Goodwill Compounding
Unlike money, which grows at a slower rate, goodwill, being based on audiences and human connections, can compound at an accelerated pace [00:06:53].
- Rapid Growth If one person holds goodwill towards you and shares your offerings with another, this can double or even 10x your goodwill within a matter of 12 weeks [00:06:39]. Achieving a 10x return on money in the same timeframe is highly improbable [00:06:48].
- Strategic Focus Recognizing that goodwill can later be converted into money, a strategic shift in focus is recommended: prioritize growing goodwill (e.g., building an audience) over immediate monetary gain [00:07:02].
- Tax-Free Growth Building an audience and accumulating goodwill is a tax-free compounding vehicle [00:07:09]. The conversion event into money can be chosen at a future date [00:07:13].
- Audience First Focusing on the audience and fostering goodwill will lead to significantly faster growth than any direct monetary endeavor [00:07:16], with the option to translate it into money when desired [00:07:21].
This principle ties into the broader importance of compounding and patience in accumulating wealth and the significance of reputation and compounding for maintaining demand and goodwill in business. It also reflects the impact of long-term investment in relational capital.