The Investing Lifestyle
Because time is your most valuable resource
There are so many books about investing money.
It’s always been odd to me that we don’t apply those same rules to time.
You can always make more money. But, time? Time is something that’s consumed and then — POOF! — it’s just gone.
Forever.
Take your sister’s graduation or your best friend’s wedding. If you miss events like that — working in an office, somewhere — you don’t get a redo.
Take the healthiest years of your life. If you miss those — working in an office, somewhere — you don’t get to retire at 65, unreplace your hips, and do it all over again.
And, it doesn’t really matter how nice the offices are.
Once your time is up, it’s up. Do you really want to spend the majority of it working in an office, somewhere?
If not, here are a few principles from investing money that I try to apply to my time.
Barbell Strategy
Barbell strategy is an investment strategy that attempts to minimize risks and gains. It does this by focusing 50–50 on low-risk, low-reward investments and an equal amount of high-risk, high-reward investments. There are no moderate-risk, moderate-reward investments.
What does this mean for time? The risk with time is that the hours I put into doing something won’t give a good return on the time I invested in creating the content. Like spending 40 hours on a video no one watches. What is the point of that?! So, suppose I put effort into a project at work. In that case, it’s either a low-risk, low-reward effort (like spending a day making a video), or it’s a high-risk, high-reward project (like spending 4 months making a Udacity course). There’s no in-between.
Now, ideally, I can get the best of both worlds by creating an action plan of low-reward actions that can be bundled together into a high-reward project. To use my earlier examples, I might make the table of contents for a new course and then start writing blog posts for each video idea. If the reception of the blog posts is good, then I’ll do the extra work to bundle them as a course or other high-reward project, too.
If you’re a basketball fan, Moreyball is an example of this: Lots of 3 point shots, lots of layups, and very little in-between.
Start thinking about this from day 1: What are your low-risk, low-reward items that build up to high-risk, high-reward projects?
Opportunity Cost
Everything you say “yes” to means you’re saying “no” to EVERYTHING else you could be doing with that time. If you have one dollar, you can spend it on anything at the dollar store… but you can only spend it on one thing.
Understand that by saying “yes” to something, you’re saying “no” to everything else.
This is really difficult early in your career because we want to fit in and be successful, but we don’t know what’s a good opportunity and what’s a bad one. That’s why it’s essential to find mentors early who can point you in the right direction.
Sunk Cost
Many people decide that something is worth continuing because of how many resources they’ve already put into it. IE, I don’t want to break up with my horrible, no-good girlfriend because I don’t want the three years we’ve been together to have been a waste. That’s what’s called a “sunk cost.” The basic idea is that money, time, or energy you’ve spent on something isn’t coming back. But there is an opportunity cost, in the present, to continue investing in what you’re investing in.
If it’s not a good investment, you have to let it go. I’m really quick to bail on projects I don’t see a future in because I understand sunk costs.
Appreciation Cake
When it comes to analyzing your time, what you’re spending your time on has to be a good value now. Too many people invest in what they hope will be a good value later and bank on what’s called appreciation. Don’t make that mistake.
See, if an investment isn’t good for you now and you’re banking on some unknown future that’s not investing… that’s speculating. The future is hard to predict, so don’t bet on appreciation.
I call this appreciation cake because the cake is a lie. Make sure that the things you invest your energy into make sense now AND have a chance to appreciate in the future.
Pay Yourself First
Paying Yourself First is the most essential money concept to apply to time. Your time is your most important resource.
You’ve probably heard of Parkinson’s law: work expands to fill up the time you have allocated for it. That’s why it’s so easy to forget to work out, call your parents, or even eat a good meal.
Many people give that time to their job. But even beyond careers, most people give their time to other people’s projects, other people’s goals. Doesn’t it makes more sense to spend your most important resource on what’s important to you: YOUR projects, YOUR life, and YOUR goals?
I try to start my day off by working on what’s most important to me. Then when I go to work, I try to work on the projects that are important to me. This often includes projects I’m doing for people I care about. (For example, I’m writing this at 6 in the morning. Why? Because my mentor asked me to, and that’s important to me. Work emails can wait.)
I work on other people’s projects in the afternoon; that’s when I’ll respond to emails and put out whatever fires came out that day. Finally, when I leave work, I do things with other people: like grab drinks with friends, go on dates, or pursue other interests.
This lets me play without guilt because I know I’ve done what I feel like I needed to do early in the day.
Remember, in the same way you’re supposed to save some of your money before you can spend it, start paying yourself first by working on what’s important to you before other people can distract you.
Enter / Exit Strategy
You’ve got to know when to take an opportunity and when to leave one.
We’ll talk more about what makes an opportunity a good one in Big Wins, so here we’ll reason about Exit Strategy.
This is actually self-explanatory: When is putting your time into something no longer a good investment? Make a plan for this before you get into it.
For example, when I joined Google, I had a list of skills I wanted to learn, and I knew the amount of money I wanted to make while learning those skills. Once I had the skills, I knew I needed a certain amount of savings before I left to compensate for the lack of income.
If those conditions were met, that meant it was time for me to leave Google.
Having an Exit Strategy going in was really easy to plan for leaving Google.
One thing to note: things change! I ended up leaving Google earlier than I wanted to because of Charlottesville, VA, and the Trump presidency. I couldn’t plan for that, but… you plan for what you can and roll with the rest.
Because I already had an Exit Strategy.
If you liked this article, hit the recommend button below and share it with one person you think it could help.
Thanks!
-Carter
@carterthecomic
