Let’s talk about the interest rate portion of the time value formulas a little more. In terms of money, we know the interest rate is the fraction of the principle paid each day, month, or year that your money is lent out. Each time interest is paid, the principle grows and becomes more valuable.
Your value over time grows in the same way. Let’s say you get up 30 minutes early every morning to read the Wall Street Journal. After several months of doing this, you use information from several articles you read to make a strategic move against a competitor—and you’re successful. Your boss is amazed by your insightful move and lauds your performance.
You are the principle.
Reading the WSJ for 30 minutes every morning instead of sleeping is the investment. (You lent yourself out for 30 minutes a day for several months, which adds up to 45+ hours of your time).
The interest rate is your effort and engagement during those 30 minutes.
The knowledge you gained is the interest earned. It accrued every day, week, and month that you lent yourself to read the WSJ.
That new knowledge increased your ability to contribute and create value for your employer. It increased your personal value just like the interest earned on a monetary investment increases the value of the principle amount.
Though interest is the key driver of value over time, context matters.
A 15% interest rate on your investment may seem like a great rate, but what if inflation rose from 1 to 5.5%. Suddenly, that interest rate is not nearly as impressive and may not even meet your needs for the year.
Similarly, you may have used information you learned about a competitor to secure a new account and bring in substantially more revenue for the year, but if you belittled people that work for you, lost your temper with your manager, or stole credit along the way, how valuable are you really?
When determining the value you create, you need to consider:
What you produce, do for others, alleviate, improve, etc.
Your price tag
Your salary, your negative attitude, how you treat others, your mistakes, work you can’t do because you lack the skill or knowledge, your tendency to talk too much and bug co-workers, etc. What do you cost to be there?
Does your boss need you to plow ahead and figure things out or wait for instructions? Does your co-worker need someone who is sociable or someone who is quite so work can get done? Is your company going through dramatic changes and needs you to be adaptive? Do those you work with need training or additional knowledge to accomplish their work?
We cannot be happy or successful if we focus in one area alone. Though some people may appear incredibly valuable at work, they may be total deadbeats at home or drains on their community. We cannot be happy succeeding in only one area of our life. It just is not possible.
A good friend of mine got home from running errands on a Saturday and as he got out of his car and crossed the parking lot of his apartment complex, he noticed a woman carrying several bags of groceries and trying to corral her kids toward her apartment. As my friend got closer, he realized the woman was several months pregnant. He offered to help her with her groceries. He carried groceries and the woman herded her kids up several flights of stairs to her apartment.
Before entering the apartment, my friend asked if she had more groceries out in the car—she did—and offered to get those as well. She accepted his offer. The woman unlocked her door and they stepped in. My friend was dumbfounded to see her husband sitting on the couch watching a football game, hardly looking up as everyone came in. He didn’t even acknowledge my friend carrying groceries. The woman did not ask her husband to help get the rest of the groceries. Frustrated, my friend went back to the parking lot and got the rest of the groceries.
Does it matter how successful the man on the couch is at work? Does it matter if he provides nice toys for his kids or a brand car for his wife every year? Context. What are the real needs compared to what we are contributing? What are we costing our families?
Do not be that man on the couch. Do not be that kind of spouse or that kind of parent.
- Do you listen more than you talk?
- Do you create more dirty dishes than you clean?
- Do you do more alone than you do with your family?
- Do you compliment your spouse more than you correct them?
- Do you adjust your effort and contributions according to your family’s needs? As your kids grow do you ask more questions, play more games? When your spouse is stressed do you do more around the house or with the kids?
Thinking of your family life:
What are your contributions?
What do you cost your spouse or kids?
What is the context of your contributions (family’s actual needs)?