Your Best Bet for a Good Parnassah Is Staying Focused

Where’s Your Focus?

Shmuel Leibowitz wanted his money to work as hard as he did. At his graphics business, Shmuel spent all day wearing many hats, responding to messages and emails in addition to designing great ads and brochures for his customers. There was never enough time, and his income was small, but he hoped that b’ezras Hashem and with lots of hard work, he would eventually be financially successful.

While Shmuel accepted his business income limitations, the slow growth of his modest investment portfolio annoyed him.  The $20,000 he’d invested three years prior was now worth just $25,000 (+25% or about 8% annually). While his financial adviser encouraged him to be patient and focus on the long term, Shmuel had trouble accepting this average return. Although he was exhausted when he came home from work each day, he’d begun studying the stock market and cryptocurrency and reading up on various strategies to improve his investments’ performance.

How can Shmuel maximize his wealth? 

Until You’re Rich, Investing Is Small Potatoes

Some people are great at solving problems but waste their time solving the wrong ones. While Shmuel should try to get the most growth out of his assets, he’s focusing on the wrong opportunity. As a young entrepreneur, his most substantial asset—and the one he needs to be laser-focused on—is himself!

At this point in his life his “personal capital,” meaning the lifetime potential of his career earnings, far outweighs his “financial capital,” that is, his modest accumulated portfolio. Shmuel’s $25,000 investment pot is small potatoes at this stage, and push as he may, there’s a limit to how much it can grow. Improving his graphics business, on the other hand, can increase his wealth substantially over time. This potential is where he needs to be putting all his energy and focus.

First Things First

Let’s say Shmuel is trying to increase his average annual investment returns from 8% to 12%. In addition to the time he will have to invest in this endeavor, he will probably have to take on a lot more risk to get the chance of higher rewards. Even if he succeeds and grows his money at the higher rate, the value added over the next 10 years is relatively small ($25,000 compounded for 10 years @8% = $54,000 vs. $78,000 @12%).

If instead, due to an intense focus on growing his business, Shmuel brings in a major new client or two every year and perhaps upgrades his services, he can quickly add tens of thousands of dollars or more to his income every year! Everyone has limited amounts of energy and time, so it’s crucial to spend them where it counts most. For most people, especially those early in their work lives, what “counts” is building up their careers and businesses; anything else is a distraction. While those who have lots of money do need to put more time and effort into ensuring that their investments grow, even they would probably be better off delegating that job and building their primary businesses.

Profiting from Better Productivity and Skills

One of the easiest ways Shmuel can increase his “personal capital” is by improving work productivity. There are so many distractions always popping up that unless a conscious effort is made to tackle important things, the workday can easily slip by with minimal accomplishment. Ongoing distraction is an especially annoying problem for people like Shmuel who sell their creative talent; getting into a solid workflow is very difficult with constant pinging and pop-ups which lower both the quality and quantity of work output.

Taking back focus may mean cutting out multitasking (aka “working with half your brain”), batching all email correspondence into one or two times during the day, and creating large blocks of quiet time to work on high-impact projects. Shmuel can probably grow his bottom line very quickly by increasing his professional productivity.

Find your Primary Value

Shmuel should also ponder where his primary value to his customers is. Due to technology changes and the ability to outsource to lower-cost countries, the value of many services has gone down dramatically. The longer Shmuel remains a provider of simple graphic design, the harder it will be for him to compete and justify high-profit margins. By upgrading his skills to encompass more technical and creative ability, he will not only be able to retain his edge but will also have the ability to move into higher-end specialty niches. The same concept applies to an employee whose value and paycheck will rise as their skills do. A bookkeeper who can graduate into a controller position, for example, will enjoy decades of significantly higher pay, a dramatic, life-changing shift. For a young businessperson or employee, the value of a skills upgrade will greatly overshadow the questionable improvement to a small investment portfolio.

Grabbing a Big World of Opportunity

Improving productivity and upgrading service offerings are excellent ways for Shmuel to grow his “personal capital.” Generally, however, the best way for a business owner to spend any extra time and energy is on attracting new customers. During the hours he’s now spending reading stock tips online, Shmuel could be on social media creating new contacts or producing promotional content to attract potential customers. By forgoing his portfolio research, perhaps he can find the time to attend trade shows and networking events to improve his own company’s prospects. Tapping into new growth opportunities is a much more likely path to his financial success than him becoming a part-time stock portfolio manager.

Sell your Skill

One woman knew where to put her focus and energy. After leaving an abusive marriage, Teresa Greenway needed to support herself and her two children. Although she was earning minimal income, she spent about $100 on online courses teaching the skills necessary to market her unique baking knowledge online. In April 2015, Ms. Greenway began selling courses on sourdough bread baking (including one on challah baking!) on Udemy, the online learning platform she herself had used to study. Despite her limited resources, she earned $26,000 in revenue in her first year and in 2017, made over $86,000! By focusing on a marketable niche, learning new skills, and broadening her market base, this single mother was able to improve her financial life dramatically. Shmuel should avoid distracting himself and do the same. 


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