Invest in People, Not Stocks

USC English professor Ron Gottesman’s retirement speech included the following message (from Creating the Good Life by James O’Toole.)

“Invest in friends. There is no other instrument that pays such high returns…forget bonds, forget stocks, forget gold–invest in friendships.”

Auren Hoffman incorporates this philosopy into his concept of soft assets- your connections, knowledge, and reputation. Auren encourages people to focus on growing soft assets while young and suggests you build your connections and friendships by simply helping people.

“Invest in friendships” is terrific advice for everyone, especially entrepreneurs. Entrepreneurship is a highly social endeavor and soft assets will likely play an integral role in an entrepreneur’s success. Additionally, I’m a firm believer that the quality of your relationships is directly correlated to happiness in life.

How much time do you spend building and nurturing friendships?

Book short: The 4-hr Workweek

I recently finished The 4-hr Workweek by Tim Ferriss. It’s a highly entertaining and inspirational book that encourages people to reject the typical corporate life and become the CEO of your own life. I’m not going to provide an in-depth review (it’s well worth the read), instead I want to address two principles that helped shaped Tim’s life philosophy.

Parkinson’s Law- Parkinson’s Law states that a task will swell in (perceived) importance and complexity in relation to the time allotted for its completion. From past experiences, I find that this almost always holds true. If you decide to start working on an important presentation weeks ahead of time, you often begin to stress out over the presentation long before you should. I would argue that the quality of the presentation will be similar whether 1 week or 1 month is spent preparing the presentation. Are 3 additional anxiety filled weeks worth an insignificant increase in the quality of a presentation?

Pareto’s Law (or the 80/20 rule) states that 80% of the effects are achieved with 20% of the causes. Pareto’s Law suggests that a high level of efficiency (80%) is achieved with limited means (20%), and that the costs of near perfect efficiency (100%) are prohibitively high. Implicit in Pareto’s Law is that we should not strive for perfection because the return on investment is not worth the effort required. This is counterintuitive to what we are taught throughout childhood (e.g. you have to earn straight A’s, perfect test scores) and in professional life. This is a principle that can be applied in our lives at both macro- and micro- levels in an effort to increase our efficiency (and thus free time).