A section of my e-zine is entitled the Behest to Invest where I recommend tools for business growth and development. It is included because I believe striving to learn and become more is a good thing - and it is definitely good for business. There is a difference between an expense and an investment and it is very important to understand that difference.
For many people, the first thing that pops to mind when they think of the word investment is retirement funds or real estate. Those are certainly types of investments but I encourage you to adopt a much broader view. Consider this definition; "time or money spent to generate growth."
An expense is an exchange - spend money, get something. An investment is an expense that delivers a return of much greater value than the price tag. Every investment includes an expense but not every expense is an investment.
The worth of an investment is measured in ROI - a catchy buzz 'word' swarming through conversations these days. It stands for return on investment: how much you get back on an investment over and above the cost of acquisition and how long it takes for that to happen. The goal is to realize the biggest possible return in the shortest possible time frame.
ROI is an important measure of results - but not just financial results. What about the non-financial realm? What about investing to generate things like intellectual, personal or spiritual growth?
Choosing to invest in these areas is as important as striving to build a nest egg. In fact, it might be more important because such development will often result in the ability to make wiser financial and business decisions.
When it comes time to decide which classes, workshops or seminars to attend; which books, CDs or educational programs to purchase, discernment is the key.
You'll want to be sure that you are investing your time and money in things that will help you move closer to your goals by either solving a problem, teaching you something faster than it would take to learn otherwise or connecting you with people who can become success allies. When trying to decide if an expense is just an expense or if it is actually an investment, ask yourself questions like these:
- In what ways will the dollars spent help me generate revenue?
- What is the likelihood that the revenue generated will surpass the dollars invested and how long will it take for that to happen?
- What problem(s) will this help me solve?
- What will this teach me?
- And will I learn it faster than I could if I tried to figure it out on my own?
- Does the information come from a trusted and reliable source?
- Can I afford not to invest in this? In other words, would it be detrimental to me or my business to choose not to spend on this?
- Will it connect me with people and resources that will help my reach my goals faster?
One person's expense is another person's investment, so in each circumstance you'll have to decide for yourself.
When it comes to investing in your personal or business growth, ultimately, you are in charge of the ROI. Because what you know is not nearly as important as what you do with what you know.
