In this episode, we discuss what are the two things you can do with your time and money…
Full Transcript
Hi Everyone, welcome to the You’re Daily Cup of Joe Podcast, with your host Joe Bautista where my goal is to give you quick lessons on how to grow yourself physically, mentally, emotionally, and spiritually so you can have better careers, better relationships, and better personal finances.
I’m also the author of the book “More You Know, More You Grow: How to Get Better Every Day”. In this book, I wrote down over 30 tips to help you grow in those four cornerstones.
In today’s episode, we’re going to talk about the two things that you can do with your time and money. I got this lesson from my time studying economics and relates to opportunity costs. An opportunity cost is a thing you give up in order to do something else. If you spend one-hour studying, your opportunity cost is one hour of leisure. You choose to study because you felt it was more valuable to you in the future than to spend that time watching tv, playing video games, or hanging out with friends. So when you do one thing, you’re choosing to give up a lot of other things.
So with your time and money, you can either invest it or you can consume it. When you invest your time and money, what you’re looking to do is give up some immediate pleasure so you can potentially get something down the road that is much more valuable. When you consume your time and money, what you’re trying to get the immediate pleasure that won’t result in anything valuable down the road.
Every day we have a choice for how we spend our time and money. Are we going to be an investor or we going to be a consumer? One is definitely more fun than the other but the other one is going to give you more flexibility over your future but we can’t be investors one hundred percent of the time, we need to find a balance that fits our goals and lifestyle.
You have to realize that all investments are not created equally. An hour spent studying history might not give you the same rate of return as studying marketing and business. History could be supplementary to your career but you have to have a diverse education and not have all your eggs in one basket. This is all hypothetical but let’s say you spend 25 percent studying marketing, 25 percent studying economics, 10 percent studying writing, 10 percent studying physical fitness, and 10 percent studying 10 history lessons. This will give you a diverse education that can prevent a Pavlov’s hammer issue where you see every problem as a nail because the only tool in your toolbox is a hammer.
So how you invest your time and money is going to determine the type of return you’re going to have. If you go to school and study psychology, you should know that about 4 million people every year graduate from school with a psychology degree and most likely you’re going to have to go back to school for a master’s degree or PhD to separate you from the other people with psychology degrees if you want to stay in the psychology field. This requires to do some future cash flow projections, to see if it actually worth it to you. Money is only one factor to consider in your decision but it is pretty important to consider because it can creep into other parts of your life if you have a lot of student loan debt.
If you’re going to invest your time in something like underwater basket weaving, the rate of return on this is not very high because of very few people in the world desire skill versus a skill like a computer programmer. Like I said, take some time to plan things out. One minute of planning can save you ten minutes in execution time. So if you’re thinking about going back to school or are applying to school. Take a look at the average salary you would get with that degree. Roughly any job is about $35k to $50k for an entry level job in a major city. So a rule of thumb, you want your student loan debt to be half of your salary so it doesn’t become too out of control and I would then do a budget based on your rent, monthly expenses, what you save, and with your debt payments and ask yourself if you would be okay with that financial situation.. Plus I would reach out to people on LinkedIn for informational interviews to see how they like their job. The idea is that you’re minimizing an uh-oh situation with your investment. Trust me, it sucks to spend $10k on something and it doesn’t work out. I spent $10k on my last business and some of it was on credit and it didn’t work out for me. It would have been better to light that money on fire but with a business, you have to make those types of mistakes but you want to avoid them if you can.
For me, to pay for my education, I went through the Marines. I saw that my tuition could of been $30k a year and so I knew I didn’t want to have that type of student loan debt and I decided to dedicate 7 years of my life to the Marines. I had some of my best times in the Marines as well as some of my worse times in the Marines. Overall, I’m glad I went through it and I grew a lot as a person. So from 18 to 25 I was in the Marines and that’s a lot of time but since I was going to school at the same time, I was earning a paycheck and getting my education. I remember taking a microsoft office class and that was super helpful. In the excel portion I learned how to create bar graphs and with certain reports, I was better able to show how I was doing in my job. So instead of going straight to school and finishing my degree, I was able to finish my degree at 25 which is not that bad plus I did it without student loan debt. I didn’t realize how well things would work out but I’m glad I did it this way versus taking a lot of student loan debt and I would have graduated in 2008 which is the worst time you can graduate because of the great recession. So I lucked out there too.
Over this takes the balance. You want to spend some time on leisure so you don’t burn yourself out and it can make you more creative. I remember taking a trip to the Dominican Republic for a wedding for four days. I did a lot of reading and walking, which gave me a lot of time to think. From this thinking, I was able to create my daily planner to track your growth activities. I created the outline on the plane ride back and then I handed the rough draft to my graphic designer friend, and then I found a printing company to make them. I don’t think I would have created this planner so quickly if I didn’t take the time for leisure and to think about things. So make sure you take time to enjoy today because it is a present
To summarize today’s episode, you can do two times with your time and money, you can either invest or consume. Choose wisely and tinker around with the ratio until you find the right balance for your life.
Thanks for listening to today’s episode.
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