Think "value", not "cost".

I’ve been quite frugal my entire life.

Generally, it’s been a great trait, but it took concerted effort to shake loose the two separate concepts of “cost” and “value”. For the longest time, I would avoid “spending” money on things I didn’t see as essential. $25 for a book? $300 on an audio set? $1,000 for a course? No thanks!

This is the guy who, as a student, used to BYO red wine in 660ml soft drink bottles to pubs and spend 2 hours getting home from them on a nightride bus (or on foot) instead of 25 mins and $30 on a taxi.

It took some work, but I’ve changed.

I now look at the return, not cost.

Areas to invest abundantly include:

• Self education
• Personal development
• Coaching/mentoring
• Expert help/advice
• Time savings

The thought of spending thousands annually on books, courses, seminars, advice and help used to turn my stomach, but it was a combination of Brian Tracy, Jim Rohn, other authors and some of my mentors beating these concepts into me that turned the tide. As I started investing in myself, I saw returns orders of magnitude beyond the “cost”.

Given the incredible returns I’ve seen on self-investment I’ve set a benchmark of investing 10% of my income back into myself annually.

I think the self education, personal development, coaching/mentoring and expert help are pretty self explanatory: get the best professional help and education you can. I’d like to go a little deeper on one which was, and still is, my biggest battle of all.

TIME SAVINGS

Boy did it take some effort here. In fact, I’m still working my way through what is reasonable here. The further into life I get, the more I will leverage other people’s time (OPT) to free up my own.

You can make more money, but you can’t make more time.

Time is the stuff of life.

So within reason, it makes sense to seize opportunities to leverage other people’s time (OPT) where you can, especially if you’re not finding sufficient time in critical areas of life (health, family, happiness, business etc).

Imagine you’re working insane hours in corporate or on your business and making good money but you’re struggling to get enough exercise, unable to spend quality time with your loved ones and you’re making big sacrifices where you don’t want to to.

If you can free up a dozen hours a week by delegating–having meals home delivered, a cleaner look after your housework, a neighbourhood kid to do your yardwork, a helper from Airtasker to run your errands–whatever, you have free’d up 12 hours to focus where previously, you had no time.

Imagine, just for fun, you leverage OPT like this for 30 years.

12 hrs/week * 52 weeks * 30 years = 18,720 hours.

That adds up to more than 2 ENTIRE years of liberated time. Imagine the impact of that on your life and those in it, if the “new time” is used well.

Yes, there is a financial cost.

But as I said.

You can make more money.

You can’t make more time.

Food for thought.

- Steven

 

Great post. In regard to OPT, I think a pretty good approach is "This task will cost me $x/hr. Do I value my time to be worth more than this? Is there something that I can be doing that will generate more than $x/hr instead?

 

Yep. This is the measuring stick I use when making these calls.

 

I see this with folks looking to buy something cheaper, and they then jump in the car and travel halfway across Melb to save a few dollars.

Here's one for ya's; we had a guy come in (a skanky bogan tradie type) who wanted a puncture repair done on a tyre.

He asked me how much it would cost, I replied; "$25"

He said; "Mate, I can get 'em done over at Hastings for $10" (Hastings is a good 25 mins drive from here).

I said "Go for it" and off he went.

But, guess what happened? About an hour later, he came in again....

He said; "Couldn't be ****** garna Hastins"

Guess what I said; "No mate, I'm not doing yer puncture, now get out of my shop"

Jeez I felt good..it was worth the loss of $25.

 

Are you serious or just taking the ****?

 

Very good post.

Time is not money, you can not have a function of money producing time. On the other hand, money is quite literally time. Very few people truly care about the intrinsic value of money, BUT everybody enjoys the freedom, lifestyle and security that having money brings.

At the basic level, you can trade only your time for money, an example: unskilled labour for a $/hr rate. Expanding on this, the most successful people leverage other things to make more money in less time, for example: Money, knowledge, contacts, experience, assets, all make more money. edit: "right place right time" also makes more money, try figuring out where you can find the right place, right time, so your luck is more calculated.

At the top level, there are people with so much money + income generating assets, they earn more than they feel the need to spend, and they have the most free time.

In short the point I am getting at, apart from 100% agreeing with you, is that you may invest in any of knowledge, contacts, experience, assets, etc to help with your goals, and leverage these to help you free up time used trying to make money.

People always speak about the compounding effect of investments in money, e.g. $1.00 today is worth $1.07 by next year, whereas if you invest that $1.00 next year, it is worth $1.00. What about the compounding effects of investing in yourself, everything is best the sooner you start it, whether it is your knowledge, fitness, side business, relationships, lifestyle, etc. Everything may compound and its always best to start sooner rather than later.

 

Great thread and couldn't agree more.

 

I hope you didn't do this...it was an opportunity to build a more loyal customer!

That $25 could have cost you .....$300 service...

 

I've been a go-getter all my life. I prefer DOING THINGS and making money in order to free up time to spend on my hobbies, family and friends. I prefer this over making mathematical assumptions on time-saving strategies.

 

I think the point, mathematical or not (generally you figure it out in your head in < 1 sec anyway), is you're prioritising your time from simple avoidable tasks to high value tasks. Valuable can be in a monetary sense or in an emotional sense (time with your family, holidays, general happiness etc) depending on your priorities.

If you had to spend a day cleaning up a site or you could pay someone $10/hr to do it for you, what would you do? If you pay someone to do it for you, you now have a full day free with your family or you have a full day free to earn $50/hr or $1000/hr.

The figure are arbitrary in this case but the point remains the same.

You only have 24hrs in a day. If you want to get the most out of it (monetary or emotional), you have to leverage other peoples time even if there is a cost associated with it.

 

I was waiting for that response.

You are probably 100% right, and I burned a bridge. He probably told another 25 of his skank mates down at the pub too, so I lost all of them as well. (thank god). Honestly; that demographic of blokes are more of a hindrance than a help to our types of business....want stuff done, but pay nothing.

We get em all the time; come in for quotes to do work on their rigs, but the rigs are clunkers worth zip, and of course; the repairs are what they are. They equate the likely cost of the repair to the value of their rig. It doesn't work that way, so they end up wasting your time, and theirs.

A bit of background infill - this bloke had only ever been to my shop one other time previously, for a similar "steptoe" type visit; swap a second hand tyre from the wreckers on to an old rim he got from somewhere else for the "VS" (or older)....never seen him before or after for anything that resembled a transaction that was worth the time....certainly not a service or a new set of tyres.

If you haven't heard of "steptoe" before; it was from the old English series from decades ago called; "Steptoe and Son":

https://www.google.com.au/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=steptoe+and+son

It's a case of common decency and courtesy that these blokes never seem to have. He should have simply kept his mouth shut and not mentioned his "you beaut deal" miles away, and just gone there, or copped it sweet and paid the price we charged with no smart arse remarks.

The price we charge for a puncture has been the same for 6 years, by the way...so we are not exactly out of touch with the market on price.

 

I agree, however would like to note that this is useless unless you DO use that extra time well.

 

Look, I get it! You don't like the pain in the neck customers. I don't like them either BUT............you seriously can not treat them like that. Sadly, I feel that this is part of why your business is trading so badly.

Serve them all with a smile and a good attitude, and they will come back. Not all of them, and certainly not the ones that have a long memory. Treat the customers right, and you will gain loyalty. If you can't do that, then you seriously need to find someone else to talk to the customers, while you go and belly ache in the lunchroom. Just make sure it's soundproof!

 

Definitely. That's why I said it

 

Good thread.

My time has x value on it. If I can get a task done by someone else for less like cleaning the house then it is a no brainer. I can then use that time to either make money or recharge.

 

If I was a normal customer in there and saw that carry on from an owner or even an employee I'd never be back and I would talk about how bad it was.

And that is the flow on effect.

 

Yup. Certainly nothing to be proud of or happily gloat about but everyone has a different POV I guess...

 

Yes, I am the same. In fact, there are certain businesses I won't go to based on hearing, or being subject to the bad attitude of the person up front with the customers. In fact, I will drive out of my way to avoid them.

I remember at our first PPOR, there were two corner stores. One on our street, about a 5 min walk, and one just up the road, around the corner, a couple of minutes more. We NEVER went to the nearest one, as the service was exceptional at the other one, and we weren't the only ones. You could see all the customers in the mornings, walking straight past the closest shop.

We have our family doctor, who is around 20 minutes away from where we live now. There's plenty of others around, and some of them very good, but the service isn't. There's a brilliant one just up the street. I know! I've been there! But I can't get in to see him, and it's not because he's so brilliant, it's because of the stupid system they have to see the doctors. You have to go in, first thing, make an appointment for later in the day & come back. No pre-booking, and if you aren't waiting there before they open, you've got buckly's of getting to see him. It's a medical centre! In fact most of the local ones are, and I hate them.....so I travel. He's retiring this year, so got to find someone else.