How to Build a Life of Maximum Return

As I grow up and try my hand at this whole “adult” thing, I’ve been putting a lot of thought and energy into the idea of investments. Whether it’s stocks or real estate, passive or aggressive, dividends or no dividends, simple or complicated, there are an endless number of strategies and theories that claim to be the best way to invest. The more I do my homework, the more conversations I have and the more I ask myself what I truly want out of life, I’ve begun to realize that the theories that steer the way we invest also steer many other areas of our lives.
Investing can be thought of as putting our resources to work for us in a way that yields a return in the future. But what are those resources? Is it only our money? Or can it refer to our energy? Our time? Our relationships? Our attention? I believe that those resources — the non-monitary ones - should be invested as well.

Investment Vehicles

When we’re considering where to invest our money, we’re looking for maximum return with minimal risk. So we weigh our options: stocks, bonds, funds etc. Which vehicle will carry our money the farthest without wrecking us along the way? When it comes to our energy, we can ask ourselves the same questions. Where can we invest our energy that will yield maximum results? As an example, is it better to spend our energy lifting weights or digging a ditch? While both might build strong muscles, digging a ditch might actually provide benefits beyond strength. It might drain a yard so a house doesn’t flood. One investment of energy yields greater returns.

Diversify, Diversify, Diversify

As in real estate where the three keys are location, location, location, the three keys to investing are diversify, diversify, diversify. We don’t want all of our investments in one stock because if that stock crashes, we lose it all. If, however, we hedge our bets by investing in multiple industries, chances are, they won’t all crash at once and we’ll survive. We might lose a bit, but not all. So what does it look like to hedge our bets in our own lives? Let’s use time as an example. If we work on commission, we’re likely to make more money if we spend more time pursuing leads. So we could work 14 hours days and it would be a highly-profitable expenditure of our time. But what happens when we get fired? We have nothing left because it’s all been sacrificed at the alter of this job. So we diversify. We spend some time with our family, some with our friends, some staying physically active, some learning a new skill and some enjoying the park with our four-legged friend. Diversification is key.

Dividends

In investing, some stocks will yield dividends and some won’t. Dividends are little pieces of the pie that are given out to the shareholders when the stock is doing well. When we’re investing, sometimes we don’t want a company to give out dividends because that means they’re not reinvesting that money back into the company which could lead them down a path to failure. Other times, dividends are a fantastic little surprise in our bank account if the company can afford it. In our lives, relationships often fall into one of these categories. If we’re expecting dividends on a regular basis, it can exhaust the relationship until it’s running on empty. Sometimes, we have to invest in the relationship, expecting nothing in return and let it grow. And then when we ask for that favor, it’s not forcing them to run on empty — it’s happily given from a storehouse of abundance and security.

Equity

When we’re building a business from scratch, we can think of equity as the initial investment to get the business off the ground. Let’s say we put $10,000 into the business at the beginning and, over time, we grow it into a $100,000 business. We’ve 10x-ed our business (congrats!). If we bring in a CEO and retire to the beaches of Thailand, we still own that business. The equity we invested hasn’t gone anywhere — it’s still ours despite not managing it any more. As it grows to $1,000,000 under the leadership of our new CEO, our investment just got larger and it’s still ours. Are we investing our thought into something that builds equity? Here’s a great example: if we’re watching football, our attention is being invested in something that yields equal returns. Two hours of attention for two hours of entertainment. If, however, we invest our attention in a documentary, it can yield exponential returns. Two hours of attention for two hours of education in the form of entertainment (if you’re in to that sort of thing) that will stick with us for the rest of our lives.

Investing our money is an important part of building and retaining wealth. However, it isn’t just limited to our money. It extends to every resource in our lives. How we invest our finite resources from time to energy will determine how “wealthy” we’ll be in life. Will our lives overflow with healthy relationships, enjoyable experiences and profitable ventures? If we invest wisely, they will.