A consumer mindset vs an investment mindset
I recently helped my dear grandmother make the exciting jump from a dumb phone to a smart phone. This was a large level up for her, since Windows 10 is far too complicated but Android greatly reduces the amount of ways she can break her life compared to a laptop. The only problem was that grandma is morally opposed to spending money.
We went to Walmart to buy the phone. We got the crappiest one available, even though the camera is bad and the battery is bad and the processor is bad. For $40 she could have gotten a much better camera that she'd use every day and have nicer photos for years to come, a battery that lasts longer and charges faster, and a processor that would spend much less time lagging around all over the place.
Naturally we also got the cheapest plan with the least data.
A few months later she was receiving spam calls, and I recommended a fancy little app which filters against a known database of spammer numbers for the low low price of only $1. Of course she would not pay the $1, even though the app would provide untold value in reducing annoying calls, and potentially save her from a costly phishing episode (grandma has nearly fallen for such things in the past when cousin Brock called from jail in Mexico and asked for $1000 bail).
All of grandma's decisions are for the absolute cheapest option. Spending Money Is Bad TM.
Grandma is not stupid. So why does she want to pay the least possible for everything about her technology? Because grandma views her phone as a pure expense. It's something she needs to have, all phones fulfill the purpose of giving her email and texting and calling, so let's spend as little as possible.
I know many people who have this mindset, and it works fairly well in the consumer world. But it does not work in business. In fact I'd argue it will actively hinder you in business.
The savvy businessperson's mindset shift is to realize you sometimes have to spend money to make more money.
This is why I've lately been spending money on things that improve my business. I bought Brennan Dunn's Double Your Freelancing Rate course. I bought Philip Morgan's Positioning Manual.
I'm two weeks into a $900 a month coaching program with Kai Davis, my new business role model. Why? Because I am confident that after reading through all of his materials and website that he will be able to help me earn far more than $900 more a month in consulting than I am now. This $900 is not a consumer expense but an investment. If I wasn't going to make at least $900 back, it would be silly to hire Kai. And as far as I can tell it will be well worth the investment. I've made more progress on my business in the last two weeks than the whole last year before hiring him.
As another example, say you hate your job, but you don't know how to get a better one. You could view job searching as an expense, and try to do it as quickly as possible on your own. But if you see the search as an investment in your happiness and future income, you might seek out a job search coach like Matt Du Pont. He charges decent rates, but if he gets you a job that gets you a substantial raise, you'll more than make up his fees in your income for as long as you have the job. Not to mention the increase in quality of life.
To be clear, I make no money from talking about these programs. I just want to illustrate how spending money, even if it is a meaningful expense, can be a good investment.
In the book The Personal MBA, Josh Kaufman calls these "force multipliers." Just as a hammer makes it a lot easier to drive nails into a board compared to your hand, these sorts of services can turn the money you spend on their fees into more money in increased revenues and raises.
I first sent this article as a letter to my mailing list. New letters go out each week!
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