The Value Invested Life....and a pimped-out Franklin.

I took a break last week from this blog. You wouldn't think it, but given that I contribute part of my ramblings to a for-profit website with deadlines, doing this on the side for free can become a bit burdensome week-in and week-out (and before you ask why for free - because it gets me readers). I was starting to feel none-too-balanced. Since creating The Balanced Guy, I've had to examine my own efforts at being one. One insight is that managing your time and energy is a lot like managing your stock portfolio. If you broadly diversify, you eliminate a lot of the ups and downs but you wind up with more-or-less the S&P 500 or Wilshire 5000 return - relatively safe but unspectacular. The same is true of your time - get involved in too much and you wind up doing a lot at a shallow level with pretty average results. It's not that it's impossible to be the complete Renaissance Man, but there's a reason why history has a limited number of Da Vincis, Newtons and Franklins. And while it's nice to fantasize I'd be able to keep up a lively banter around the dinner table with these three as the conversation shifted from science to art to philosophy to politics, I have a feeling I might come up a tad bit short. I'm realizing that probably a lot of people are interested in all the world has to offer, but that they have just decided to focus on fewer of the choices and not become sidetracked by distraction. You are now probably thinking "Duh. What took you so long to figure this out?" And then this discussion is a moot point for you if you don't have the ADD-inspired approach to life like I've had.

It's no great secret of the universe that to be really good at anything takes a significant investment of time and energy (keep your eye on the term "investment"). I'm not saying you have to adhere to the 10,000 hour rule as put forth by Malcolm Gladwell in his book Outliers, but focusing your efforts on fewer things in life will get you overall better results. Consider it the value investing approach to life. I happen to think Warren Buffett is quite the financial guru and his investing style is one worth emulating (not to mention he does a killer Axel Rose impression). Some people might say that he doesn't diversify enough and this can be risky. In response I say Buffett didn't get to be one of the richest men on the planet by being a crappy money manager. Second, which is more risky: owning so many different stocks that you have no chance of having enough time to keep up with every company let alone understand each one in sufficient depth, or owning stock in just a few companies that you understand very well and have the time to keep up with? Third: Life is risky so get over it. If you chose the index fund approach, it requires very little effort; but don't expect anything more than average returns. If you take the value investing approach, you should expect to put in effort and in return see solid, above average (but not spectacular) returns over a long time frame with some ups and downs along the way and you might just wind up very, very comfortable. If you don't want to put in effort, then be prepared for average. Of course, these are both different than speculation, which is essentially a roll of the dice: some spectacular results if you get lucky, some devastating losses if not.

To get back to my point: Life is a lot like investing. Sometimes there are moments akin to speculative stock trading - a trip to Vegas, being the 100,000 customer through the door, or having a winning lottery ticket. But these aren't methods you want to use to pay the monthly bills, let alone build your life around; they're too tied to chance. No matter how often you play the lottery, you can't get any better at picking the numbers to increase your odds of winning. And, since each lottery drawing is a statistically independent event, playing more often does not increase your odds of winning - you're just as likely to win millions the first time you play as the 1,000th time. In juxtaposition, keep playing tennis or create yet another painting and you'll develop real skill and get better. 

As for me, I'm trying to craft my life to be less like an index fund and more like value investing by picking just a few things to learn about in depth and become somewhat "expert" at them (and certainly not at all like speculative investing - waiting around and hoping a pot o' gold falls into my lap). This doesn't mean that I stop being interested in the world around me, but I simply make an effort to be a bit more focused in using my free time. You never know where it might lead, but I'm pretty certain that I'll never be asked for advice or to be a guest speaker or something like that by knowing a little bit about a lot....unless I happen to make it onto Jeopardy. The hard part, as with most things, is putting in the effort on the front end when it feels like you'll never get any better. It's frustrating and we are probably all guilty at some point of giving up out of a fear of failure - if you don't try you can't ever fail. What could be more comforting? However, like the change of the seasons, eventually (and it seems oddly sudden) we find we're actually pretty good at whatever we've been doing all along.

So if you already have managed to cut the information overload, trying to be everywhere, do everything and please everyone all at once, all the time, I applaud you. At the same time, try to remain broadly informed; especially on the important issues (and I don't mean just what's important to you...like the box scores from last night's game). I'll be the first to admit it's a difficult balancing act, hence the reason it's such a challenge to be a Balanced Guy.