Like a hedge fund manager handles millions of dollars, we are all hedge fund managers of our time, investing millions of seconds on our own behalf. Every second that passes and was not wisely spent is a second wasted. But what if we could harness the power of the stock market and begin investing our time so that it compounds with interest? The trades we make today translate into success. Then we reinvest that success and a little more time to create even more success.
I use the analogy of a hedge fund manager because ultimately that is what we are with our time. We are the manager. Every time we choose to perform a task or take part in an activity we are choosing to “buy” that stock. When was the last time you analyzed an everyday mundane task to evaluate whether it would move you closer or farther away from success? Do you think a hedge fund manager just arbitrarily buys and sells on a whim? Every step must be calculated.
We can choose whether or not to invest our time into something the exact same way a hedge fund manager decides if he wants to invest his money in a stock. This way we can become expert traders in the currency of time. Below are the 6 steps that hedge fund managers use to become successful. You can use these 6 steps as well to invest your time and turn it into a fortune.
- What is your strategy and time frame? This is important because what’s good for you over 3 years may not necessarily be good for your over 10 years. I would sit down and think about your life this year, 3 years from now, 5 years from now, 10 years from now, and 25 years from now. Make sure that you develop an investing strategy that can be adapted for each of these time frames to make sure you are where you want to be. One example of this is the Oil Patch. I live right in the middle of it. I see guys right out of high school making 100k a year working 80 hours a week in the oil patch. This may be a good investment right now but at what risk? What happens in 3 years when you want to be able to spend more time at home, or oil prices drop over night and can’t get as many hours? Was the risky play worth the quick reward. You could be left with very little in terms of experience and hireability.
- Choose your expertise. Billionaire T. Boone Pickens once told me “I may not know much about a lot of things but I do know a whole heck of a lot about a few things.” Those few things were natural gas. He used that knowledge to make billions of dollars trading natural gas futures. What’s your field of expertise? Mine would be management and energy. I understand leading people and I understand the energy markets. Thus I should not be engaging in too many activities that advance my “bass fishing” expertise when I could be spending time investing in my management field by attending seminars or networking with other executives.
- Set a beginning balance. Really do an inventory on yourself. How much time can you really spend on different things? My beginning balance is the whole of my experiences in life and my current resources. A PGA pro may not be attainable for me, but something in the energy field, public speaking, or writing, are areas where I have the resources (time, money, and experience) to invest.
- What is the currency? We measure success in terms of time spent doing things you enjoy rather than things you “have to do.” We also consider monetary value specifically in terms of “do you have enough money to do what you want and live a lifestyle you’d enjoy.” Instead of investing dollars, we will be investing time and energy.
- Emersion – Like a hedge fund manager reads the Wall Street Journal to constantly keep up with the markets we too will need to eat sleep and live our investing. The old rule of thumb is that it takes 10,000 hours to become an expert in something. That being said, it will take you more than a year of 24/7 thinking to become an expert in your field of investing. Don’t waste time reading about movies stars if you aren’t in the film industry, get it?
- Review – Hedge fund managers can tell you how much they made or lost, every single day. My advice is that you keep a similar record. Maybe not as detailed but keep some sort of record. Review often. What have I done today to invest my time wisely? Are the activities I’m involved in increasing my investment or costing me?
As you go through this list it will take time to adjust your lifestyle to really become focused on your investments. I recommend rereading this several times a week. As always I’d really enjoy to hear your feedback so please leave a question or comment below.