Your Most Important Investment

If you had to answer the question “What is your most valuable investment or asset class” what would you say? If you asked your friends and family, how would they respond? They may rattle off some hot stock they recently bought like Tesla, Apple, Facebook, or Netflix. You may respond that your career, company stock, or large U.S. stocks are the most valuable investments. The latter is on the right track, but not quite the answer I was looking for.

Time. Time is the most important investment you will ever have. It also has the two most unique characteristics of anything we spend.

1. Time is the most democratic asset class in the history of mankind because almost everyone has the same daily account balance. We all start the day with 1,440 minutes in the bank no matter how much or little money you have. Then the spending begins.
2. We do not know, cannot know, and have little control over how many of these 1,440 allowances we have left. There is no account statement or projection of future portfolio value after paying for college and retirement.The number of days we have left on this Earth is a great unknown. With this framework in mind, I promise to write as quickly as possible and be as to-the-point as I can be.

With the scarcity of time in mind, what would be the best ways for you to spend your time? According to studies, we gain more pleasure from spending money on experiences with other people than on luxuries for ourselves. This concept can be used for time as well. Is time well spent watching the latest reality show or flipping through Facebook? Or, would time be better spent interacting with friends and family, or learning something new. Eliminating unnecessary distractions or objects is the quickest and best way to gain more time and money.

Another interesting idea is to set an alarm clock – for bedtime. I recently heard this idea on a podcast and thought it was ingenious. Most people I know set an alarm clock to wake up. If waking up is so important, why not set an alarm for going to sleep. The Wall Street Journal published the article “Sleep Experts Close in on the Optimal Night’s Sleep” in July 2014. According to research, seven hours is the optimal amount of sleep for your health. So if you need to wake up at 5:30am, set your going to bed alarm for 10:00pm.

Oh no, 1,440 total daily minutes has been cut to 990 waking minutes! Here are a few more tips to help make the most of your time.

• Set a stop time for some activities. Have you heard of Parkinson’s Law? This behavioral observation states that work expands to fill the time available for its completion. As an experiment, cut your estimated time to complete a project in half and see how productive you can be.
• Having trouble with Parkinson’s Law? Add a little bit of Pareto’s principle, aka the 80-20 rule. According to this principle, you get about 80% of the results from 20% of your efforts. Obviously only doing 20% of the laundry does not get you 80% results (at least that is what my family keeps telling me), but it may work for other areas in your life. By placing primary focus on the valuable 20%, time will be better spent.
• Do not multitask. If you think you can, Stanford University research disagrees with you.

In addition to making the most out of your time each day, there are some activities that may increase the number of days we have. Obviously, this number is mostly out of our control. However, I will consider almost anything I can do to tilt the odds in my favor of living a long and healthy life. These activities fall into four main categories.

1. Eliminate risky/reckless behavior (skydiving, not wearing a seat belt, etc.)
2. Eat good food
3. Move – play, exercise, walk
4. Relieve stress – meditate, sit still, turn off the electronics

I hope you try some, if not all, of the ideas listed above and I would really enjoy hearing about your own personal experiences with them. In the essence of time, I will simply conclude with some important questions to ponder for your most important investment.

• Who and what is important to you today?
• Who and what is expected to be important to you in the year 2020?
• How do you currently allocate your time?
• Are your responses to these three questions in alignment?
• Does your financial plan reflect your responses?