Maximizing your returns on investments
In 2022, I made a couple of big business investments: I invested in advanced training and I hired a company to help with building my website. When I thought about spending money on these things, I asked myself, “what will I get back from these expenditures?” I wanted to think about my return on investment. In business, when you invest money into something, you want to ensure that you get at least as much, and hopefully more, than you put in. In business, this is a simple and common way to think about how we spend our earnings.
Yet, in our personal lives, we rarely think of the using our money as an investment (unless we’re actually using it for investing, like in the stock market or in real estate). Think about that last thing you bought. Did you think about whether you would get some return on what you put into it? Probably not. It wouldn’t be a common way to think.
When thinking about returns in our personal lives, the goal is not to ensure you get a monetary return for every dollar you spend (such that you have no joy in life). The goal is to reconsider how you’re using your money and to be mindful that you are using it in a way that enhances your life – monetarily or otherwise.
Money represents actions. Our actions are demonstrations of our values. Are we using our money to enhance our values? To live the lives we want to live? Thinking about returns on investments in our personal lives is thinking about whether you are getting joy, or pleasure, or enhancing your life in some way. If the way you are using your resources isn’t enhancing your life, think about whether there is a better use of your hard-earned money.
When you look over your spending, think about whether these “investments” – what you spend your money (and time) on – enhances your life. If not, reconsider the way in which you do spend your money (and time).
If you go out to lunch with a friend and spend $20, you shouldn’t expect to get $20 or more dollars back. But what do you get? Perhaps a meaningful experience with someone you care about. Perhaps you leave feeling fulfilled or connected. Perhaps an excellent meal. Now, what if you, just in a hurry because you forgot to pack your lunch, spend $20 on lunch for yourself? What is the return for you? I’m not saying one is better than the other. I’m just asking you to consider what the spending represents for you.
Why is this important? Our resources are finite. We don’t have unlimited time. We don’t have unlimited money. We don’t have unlimited energy. We must be deliberate in the way we use what we do have and do our best to ensure that the way we use our resources amplifies what we care about and leaves room for more of what we care about.
What are ways you might “invest” or think about how you use your resources? You can invest in learning - taking a class, reading, or being part of a community that you enjoy. You can invest in your health by staying active, eating well, and keeping up with routine doctor and dentist visits. This health should also include mental health – taking time for yourself to do things you enjoy, be with people you love, and being mindful. You can invest in prioritizing quality time – spending your time in a way that leaves you fulfilled rather than drained. You might invest in curating things you really appreciate that create an environment that is fulfilling. The best part of these investments? Most of them can be free or part of what you’re already doing – just with a little thoughtfulness.
Our spending is a good place to start when analyzing our returns because there is a clear record of what you used. When you spend money, think about whether that spending is going towards enriching your life. Identify what your return is – just like a business would do to make sure that the investment is adding value.