Money is a vanity metric
"Lean Analytics" for real life. Disclosure, this article can change your work and life goals.
I’ve decided to life hack my life to a more fulfilling life using my growth hacker mindset. In this essay, I will draw guidelines to help us to achieve it.
"If you have a piece of data you can not act on it, it's a vanity metric."
If you have enough money to buy a beach house in a piece of paradise that you would love to spend time and enjoy. How much time could you enjoy it?
If you can’t see yourself enjoying as much, you desire your time in this ideal house. The money is a vanity metric. But the house is a vanity metric too.
If your answer is one weekend a month during the summer, well you don’t need to buy the house in the first place, you can rent it. But let’s don’t miss the point.
It’s not about if you should buy houses, rent or use Airbnb. It’s about to figure it out what you want and what you really can do about it and how.
How can I use one piece of metric that will help to guide me from where I’m to where I want to be.
"A good metric drive you to do things differently based on its information"
I was running the entrepreneurial life as marathons in running mills. Pursuing the wrong metric. Money was a metric completely disconnected with my “Why” and my purpose.
So what do I want?
Let’s me line out something; every person is different and what I’ve figured it out work best for me, not necessarily will fit you well.
Said that what I want to accomplish in life is what I call…“Empowering freedom.”
I’ve coined it to describe the state of living with enough personal power of choice and liberty to live regardless of worrying about resources, time or space. Some people would call it financial freedom. I think there is a significant overlap but aren’t the same thing. I’ve met several financially free people. And all they were is financially free, and nothing else.
And during my lifetime, a bank account balance as a thermometer to ensure how successful I’m on freedom and power acquisition showed itself as a terrible metric. I’ve made some, I’ve lost some. But I’ve always been in the middle of a trap.
A useful metric is:
Comparative trough time.
A ratio or rate.
Change the way you behave.
I started to design some noticeable changes and start to model my $/working hour ratio. As a ratio for measure my success. There was way better. Indeed, still intrinsic related with money and work. And not so much with power and freedom. So I couldn’t use as a compass to see when the needle is moving while I’m getting closer to my goal.
Eureka, what about mensure my $/working hours ratio. Mensure my $/free hours ratio. That simple sound brilliant.
Except when I’ve needed to work a lot more hours while I’ve designed the hall operation of the Growth Team (mine new venture that helps other entrepreneurs to grow their venture way faster.) I just realized that I was working more. So I wasn’t going to the direction of more freedom, but the mine $/free hours rate was improving.
This metric was too easy to trick.
So I started to dig deeper, looking to my The One Metric That Matters.
And after some iteration, I discovered!
I call it the money/freedom ratio:
[(monthly net income / monthly worked hours)*(720- monthly worked hours)]*1000
Whatever I do that impact this metric closer to 100 it will bring me forward to life with more power and freedom. However, the far it is from 100 it always indicate that I should to improve something in my life/work.
And to determine what is wrong, I've chosen some indicators that support the One Master Metric, they are:
Monthly Worked Hours = the lowest the best
Monthly Sleeped Hours= bad>8<bad
Monthly Net Income/Monthly FreeTime Ratio = Bad>10<good
Monthly Net Income/Monthly Working Hours= Improve your $ make capabilities >100 < Improve your liberation capabilities