As I’ve written before, principles govern everything in life, including personal growth and development. Just like the law of gravity, the principles that govern increase are natural laws that just work: you don’t have to believe in them, you can’t switch them off and they don’t depend on your effort. Because they just work, however, you can align yourself with these principles and let them carry you to a place where you achieve your goals.
Growth Principle: No Pain, No Gain
Investment is about making a short-terms sacrifice to secure long-term benefits. The “No Pain, No Gain” principle states that increase will not occur in any area of life without someone making a sacrifice. In other words, there is no growth without investment.
- To grow an oak tree you must bury an acorn
- Financial investment involves giving up a relatively small amount of money now with the expectation of a larger returns in the future
- To grow in knowledge, you need to put in learning effort
- To develop muscles you put in physical effort
- To develop relationships takes time and emotional energy
Application: Be an Investor, not a Consumer
Everyone has something to invest: be that time, money, attention or talents. How do you spend your time? Where do you spend your money? Your schedule and your bank statement are two very powerful indicators of what you value.
- Are you investing in owning more things or becoming someone better?
- Do you spend more time on being entertained or learning something new?
- Is your job give you money or meaning?
Growth Principle: You Reap What You Sow
All investment returns something like the thing invested, never something different.
- If you plant sunflower seeds, you get sunflowers
- If you’re friendly you’ll gain friends
- Financial investment leads to financial gains
- What goes around comes around
The only way to obtain something that you have not invested in is by exchange. You swap something you have for something you want. However, exchanges always result in a net loss, whereas investment always results in a net gain. That isn’t to say that exchange is bad, but that investment is better.
Application: Choose your Seeds to Determine your Crop
So, in which areas of life do you want to grow?
- In leadership?
- In self-awareness?
- In health?
- Or in something else entirely?
Whatever you choose, your chances of success will increase dramatically if you invest what you already have in that area.
Growth Principle: Use It or Lose It
If you don’t invest it, you don’t get to keep it. If it isn’t growing, it is diminishing.
- The longer you keep a seed without sowing it, the less likely it is to produce a crop
- If you don’t use your muscles, they grow weak
- If you don’t invest your assets, they loose their value
- Cars that are not driven still rust
- Clothes that are not worn will still go out of fashion
- Food goes bad if it isn’t eaten
- Relationships degenerate if you don’t nurture them by spending time with people
Application: Activate Your Assets
If you don’t actively manage your time, money or possessions then you are not investing them as effectively as you could. By taking time to make sure you are making the best use of your assets, you are ensuring that they won’t just rot away but will work for productively you.
Application: Clear the Clutter
Anything that isn’t invested will turn bad, so:
- If you aren’t going to use it, get rid of it.
- If it is more of a burden than an asset, change it or ditch it.
Growth Principle: Growth is a Calculated Risk, not a Gamble
No investment is guaranteed to produce the results you want. There is always an element of risk:
- Crops fail
- People can let you down
- Nothing in life is guaranteed
However, there is a world of difference between investment and gambling. The following differences been identified in the financial arena, but apply equally well to investment in any area of life:
- Investment is based on research, gambling is based on chance
- An investor knows that the odds of success are favourable, whereas a gambler hopes for success despite the odds being against them
- Investors are risk-adverse, gamblers take big risks
- Investors are systematic, gamblers are unsystematic
- Investors have a long-term plan and focus on long-term gains, gamblers focus on single events and short-term gains
- Investors follow their head, not their heart
- Investors focuses on growth, gamblers focus on winning
- Investors focus on tangible results, gamblers focus on feeling good
Investment, then, is based on understanding, on weighing up the alternatives, and choosing a path that is likely to bring the results you desire. A gamble, on the other hand, is based on emotion, on bind chance, on hoping for the best despite the likelihood of loss.
If you want to grow, then, you need to invest rather than gamble
Application: Manage the Risks
- Don’t put all your eggs in one basket (diversify)
- Invest in what you know
- Don’t risk more than you’re prepared to lose
- Weigh things up (but don’t procrastinate)
- Develop long-term goals and plans