Take a risk, get a reward - On the day of Diwali my 13-year-old cousin, who is painfully shy, went to camp for an entire month, the longest time she`s ever been away from her family. I went along with my uncle to drop her off. Her eyes filled with tears, she said , "I don`t think I`m going to make it, Jay." "I don`t know how to talk to people." It’s a month now, since she returned and my favorite e-mail from her began like this: "Hiee! Jay, you were right. I needed to learn how to talk to people so that I could show them my fun and interesting self. Now I have new friends." She took the risk and she got the reward. I wonder how many of us think about our personal portfolio in these broad terms. While most of us are serious about the financial side of our lives, calculating our individual net worth, most of us ignore the softer stuff and loose out big time.
What’s wealth creation got to do with YOU – To increase our wealth, we invest in instruments ranging from RBI bonds to company FD’s and bank deposits to shares; diversifying our investments to get returns, which take care of our needs. An important element that we often forget from this basket is ‘you’; an element, best, not forgotten in the ‘New Economy’ where people work with their brains instead of their hands.
Whether you are a manager in a media company, a banker, a professor in a college, or a businessman, in the ultimate analysis ‘you’ are your ultimate tool for wealth creation. It’s "you’ that gets monetized over your working life by offering your services to a company who in turn rewards you in the form of a salary or a profit. It is intangible, but it’s there; after all there are no free lunches. Thus, it’s in your own interest that you increase your value to the world by getting an education and then continue to invest in developing skills that the environment is willing to pay you for.
Investing in YOU is an expensive and time-consuming exercise. Perhaps that’s the reason why it’s so often ignored. That`s exactly what`s happening to my friend Rajeev who has decided to pursue a mid-career MBA at the IIM’s, which will cost him Rs 3 lakh in tuition alone. But that`s just a drop in the bucket compared to what it will cost when you consider the opportunity cost of those two precious years during his peak. He makes Rs 30,000 per month, and thus he would be losing at least Rs 7.2 lakh during this period. A bigger cost is the loss of time and opportunity; he may watch his colleagues rise while he takes a study leave. If that’s the risk you take when you invest in yourself why do it? In my opinion it`s about enriching your skill-set and forgoing near term benefits for long-term manifold gains; two-steps backwards, five forwards (maybe).
Skills that matter - "You are nothing; your knowledge is everything", is a famous quote by the father of modern management Peter Drucker. Going by this logic if, your knowledge matters and society is willing to reward you for your knowledge you must continue to upgrade your knowledge. Some of the most important skills in business today are domain expertise, computer literacy, foreign languages, analytical skills, writing and communications. You need to take stock of yourself, and determine what skills you need to make yourself more promotable or help you get a new job. New skills are developed by:
1. Formal education and short courses - Your experiences in Indian colleges may make you reluctant to set foot in a classroom again, but taking classes is one way to invest in yourself and set a strong foundation to get ahead in life. This needs to be supplemented by investments in certification programs and other relevant short courses to increase your overall skills in order to be viewed in a better light by both your current employer and any company you might interview with in the future.
2. Experience – More years at work expose you to new thoughts, ideas and people. This is what the business environment values and you are thus rewarded for this experience. Hence remember, wherever you are, keep collecting experience.
Last but not the least, however technical your work may be, it is always in your best interest to develop your business acumen and a shrewd business brain. This in combination with your functional skills is an essential ingredient if you are to rise to the top of any modern organization.
Take home - Remember, your portfolio is composed not just of stocks and bonds and real estate, but also of the investments you make in yourself, in your lifestyle, in designing a life that makes you happy. While you need financial investments to accomplish that, the biggest investment you can make is in yourself; all else coming to naught in the long run if you don’t invest in yourself.So when you`re lying on the sofa next weekend, or playing cricket or traveling to work think about what are your talents which if invested in, can give you good returns and increase your valuation. It’s like any other investment, where you give up your money for greater gains later, this functions similarly: you give up a part of your present for a better future–two steps backwards, five forwards (maybe). Alas, as in the movies there are no guaranteed happy endings. Tread with care…