Monetary Return On Investment
Monetary Return On Investment
I had a lovely conversation with a friend today. We were discussing our online and social ventures. He was describing how he was outsourcing the parts of his business that he didn’t like, or didn’t have an affinity for. And my first response was one of surprise. Knowing that he wasn’t making any money on his venture, I was shocked that he was willing to spend money. It had never occurred to me to drop cash on a hobby/business with no likelihood of monetary return on investment in the near future.
His explanation was both worthwhile and thought provoking. It kind of took me by surprise. I have spent so much of my time building projects that eventually paid for themselves. It had never occurred to me that maybe I was concentrating on the wrong parameters.
Time
Let’s be honest. None of my online ventures are dependent on monetary return on investment. My financial life will not live nor die based on whether I turn a profit. In fact, most of my creative projects are just that. Creative. Even if I make money, there is almost no way that it will move the needle. I can make far more being a physician.
So I do these things for the joy of creation. But, there are certainly parts I don’t enjoy. Who likes putting together an episode page for a podcast episode. Or repetitively posting on social media. Or Pinterest.
I could stop doing these things. But I like the the fact that they further the reach of my creativity. I could keep on, but then I am violating almost every financial independence principal I believe in.
I am wasting time.
Abundance
If I am lucky to have an abundance of money (which I think all financial independence people do), and I have an activity that I enjoy doing (Creating podcasts and blog posts), should I not spend money to make these activities as enjoyable as possible?
Isn’t that what money is for? Is it wrong to pay someone to help edit my podcast or blog if I can afford it, and don’t dig doing the manual labor? If my monetary return on investment is negative, does that mean the whole return on investment is negative?
Maybe happiness is more important than positive cash flow.
I have already admitted that my purpose for pursuing such ventures is not monetary in the first place.
Counter Intuitive
This feels strangely counter intuitive to me. Most activities I have pursued in the past have all been measured by monetary return on investment. If I didn’t make money, or at least enough to offset my costs, than it didn’t feel like a success.
It has never been obvious to me that maybe learning, experience, or joy were good enough reasons. maybe I lost money, but I learned a new skill. Met new people. Or just had a great time.
Wouldn’t those outcomes make it feel like my money was well spent?
Final Thoughts
I have limited myself heretofore with solely monetary return on investment philosophies. If it wasn’t making money, it wasn’t worthwhile. This view of the world has often led me to spend inordinate amounts of time involved in activities that I thought were worthwhile, but I certainly didn’t enjoy.
My friend today pointed out that sometimes it is just worth spending the money. Logically I hear his point, but emotionally I am not there yet.
Maybe I will be one day.
So interesting! I understand what your friend is saying. And I believe that if I had the wealth to afford to , it may not matter to be operating a business at a loss , if there was great pleasure or satisfaction involved . Maybe . I’m not there yet either.
My experience has been , that when several different ventures , were sinking , even though they were driven by creativity and passion , I had to stop and re -evaluate . I was brought up to believe that success in a business is shown through profits. This leaves me wanting it all … the creative satisfaction and profitability.
Maybe for me the question is whether it is a business or a hobby. My business side would never allow me to operate a business at a loss, however we all have hobbies that we spend huge dollars and time on. Is my blog a business? Is it a hobby? Would that change if I had to spend double the time on it?
Yes. The easy answer is just to call it a hobby.
I was brought up with this same idea about profits. The question is does it change when you have enough?
That’s a good point. Most people spend money on their hobby. If it brings you joy, you should spend a bit especially if you’re doing well financially.
Logically it makes sense. Emotionally, not always.
I started my blog with absolutely no interest in monetizing it. I simply can’t stand the hassle. I don’t advertise it or engage in marketing in any way. I have no interest in leveraging it to become a platform for something bigger. I was in business for 30 years and that’s enough business. It holds NO COUNTENANCE for me. It does give me a platform to share some ideas and perspectives of my own and the few who go there to comment, and hear and regard their perspectives. The result is discussion not one line click bait. The result is some amount of community apart from selling the soap. Homey don’t play that soapy game, too annoying . I didn’t retire to be annoyed. I already proved myself in my career, now it’s time to be myself
Would you spend money to make your blog better?
I spend my time making my blog better. I publish a lot of deep dive stuff not “ten bullet points regarding mundane FI crap”, like point 1 get out of debt, point 2 have an emergency account, point 3 don’t shoot yourself in the head when cleaning your gun, and moronic stuff like that.
It is a means to an end not an end in itself. A means to record my thought process and expand my understanding as new data becomes available. I might spend something if there was a dramatic value added or if it satisfied my sense of style. Presently my prose and my obtuse take on finance is what satisfies my style. There is a lot to study and know.
It sounds like your friend is insightful and extremely handsome. Seriously, really good post friend.
Yep. He is probably both of those.