Becoming An Allocator
Defining Your Personal Bar
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This week's post will be brief. This happens every once in a while where I attempt to bite off more than I can chew. I get an ambitious topic that I want to dig into and I just can't do it justice in the small window of time I reserve for panic writing my posts.
Stay tuned next week (hopefully) for my breakdown on the value chain of capital, and how every company is beholden to that value chain that dictates the allocation of capital, and why investors think what they think.
Instead, this week I'm left reflecting on a question I was asked in a recent podcast (I'll share once its released.) The question was about whether I consider myself an investor first, and a writer second? Or a writer first, and an investor second?
On the surface, its an easy question to answer. Investing is what pays my bills. Writing is what keeps my mind sharp. So you could easily argue I'm an investor before anything else.
But I tried to more thoughtfully respond to the question. If I were to sum up how I think about myself, and my life, I gravitate towards the word "allocator." Pretty lame response maybe, but stick with me.
About this same time last year, I wrote a piece called "Of Things That Matter Most." In it, I referred to a quote I've used frequently to define investing:
“The art and science of allocating finite resources to create an optimal outcome.”
And that definition is what defines me in a lot of ways. I consider myself an allocator of a number of different finite resources. Of capital, for sure. That's my job. But I allocate attention to my kids, love to my wife, thought to my writing, and on and on.
For each person, I think you have to define what your return thresholds are for the different finite resources in your life. And in general (myself included), I think we do a pretty bad job of holding a high bar for how we allocate our resources. The way we divide our attention, our affection, our loyalty, its spread so thin across our favorite media, technology, hobbies, politics, gossip, celebrities, and on and on.
My sense is people would be a lot better off if they thought of all the things in their life as finite resources. Concepts like being a "time billionaire" is a framework that could help people better measure their bar for allocation.
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Lay Up Treasures in Heaven
Matthew 6:19-21 - “Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal; but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also.”
I like the framework of an allocator. I always say, "time is our most precious asset."