Make 55 Percent More Money – Part 1
We recently did a couple of posts about project selection – how to choose the projects that are best for you. First, we talked about knowing if you should invest your money in a project. Then we integrated the value of our time into the project selection methods.
Now we want to extend that concept. We hear a lot about the right mix of assets when it comes to investing in our retirement portfolios. But we don’t often think of the activities we perform – how we invest our time – as a mix of assets.
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Investing time like a venture capitalist allocates money
We should because the things we do should add value to our lives or we shouldn’t do them. So we want to approach our investment of time like it’s a portfolio … specifically, a venture capitalist’s portfolio.
A venture capitalist invests in a bunch of companies. Then they see how they perform and make decisions. If a company is hitting its marks, they keep funding it. If not, they don’t. They are constantly allocating money to the companies that look like they will generate the greatest return.
We can use this as a model for how we invest our time.
Find your highest value mix of activities
We’ve come up with a four-step process to determine those activities which deserve more of our investment of time and those tasks that should get less. So we can make more money without investing more time.
Step 1: List all the activities you perform.
Step 2: Place a dollar value on each of those activities.
It’s relatively easy to figure out the value of activities that make you money, but what do you do with those tasks that don’t? You want to look at two scenarios:
- How much would it cost to pay someone to do it for you?
- How much could you make in that time?
For example, spring is about here. It will be time to get out the lawn mower. For the sake of simplification, we’ll ignore the cost of owning and maintaining a mower. Say you could find someone to mow your yard for $50. In that time, you could earn $75 after-taxes. Under these assumptions, mowing your own yard costs you $25.
Step 3: Rank your activities from high to low.
Step 4: Create a portfolio of activities that generate the highest return.
Just like a venture capitalist, you want to invest more time in those activities at the top of your list. You want to “fund” the winners (i.e. invest more time in them).
To find the time for those activities, look at the bottom of your list and find ways to eliminate or delegate those tasks. One by one, you’ll find more time to invest in your higher value activities.
Limitations
Admittedly, there are limitations to this process. Some activities cannot be measured with money. Going back to our example about mowing the yard, you may really enjoy that task.
It also doesn’t account for the fact that you need some down time to recharge. This is definitely a quantitative, not a qualitative, process.
This was the set-up. Next time we’ll discuss an example so you see how powerful this process can be. You’ll see how to make 55 percent more money without investing any more time.
Thanks so much for stopping by our site today. Until next time, here’s to your bigg success!
Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00327-021009.mp3
