Imagine the different aspects of your life as departments of a company wherein you play every position from the CEO to the receptionist. You are the culture and the strategy. And just like a real business, you have goals, advisors, and limited capital.
With this limited capital, you need to be sure you are only incurring expenses when they make sense for the business and are maximizing your income in the form of your bank account balance, your level of day-to day fulfillment, and the overall quality of your life.
Just like a real business, you have an infinite stream of suppliers willing to provide various parts and services to keep your business running… for a price. These are the grocery stores, colleges, gas stations, hair stylists, doctors, banks, hotels, and gyms of the world.
And just like a real business, you also have many partners that will help you achieve your objectives on the way to meeting your goals such as your spouse, friends, family, coworkers, acquaintances, pets, and so on.
However, unlike a real business, the only client you have is YOU.
Actual businesses exist to create something, sell that something, and then create more somethings with the profit. They do this by researching, designing, producing, marketing and delivering products and services that consumers will buy. They track the performance of this output and try to maximize it by making changes to their business model. If mismanaged, they can and do go out of business.
I believe we could benefit from adopting this framework in our personal lives.
To be clear, I’m obviously not referring to the over-analysis of imperfections in our lives, the suffocating bureaucracy inherent to large organizations or the maximization of shareholder value through cutthroat and unethical business practices. I’ll leave all that to the Fortune 500.
Here you are the only vote that counts at the shareholder meeting. Your overall satisfaction in life is the only purpose of your company.
You may choose to squander your profit on material possessions, or you may choose to be a philanthropist donating all proceeds to charity.
Wherever you land on this spectrum doesn’t matter as long as it maximizes your happiness. Either way, whatever you do with your time, money and attention will help or hinder the business of your life.
Businesses are incredibly efficient and effective when ran well, but stifling and parasitic when ran poorly. Which is yours more like?
The Departments of Your Life
Like any good business, you should have a mission in life. Not one of those wishy-washy platitude-filled cliches that every corporation puts on their “About” page either. A real mission defined by your values.
Don’t know what your values are? Spend some time thinking about them. Then get out your credit card statement and calendar and see where your actual values are. Just like me, you’ll probably need to adjust something.
Check out my very first article to see what I mean:
Why focusing on your values is a good place to start your path to financial independence. (8 min read)
Once you’ve got a mission driven by your values, you can lay out the various departments your business will need to operate. Below are the ways I try to utilize this mentality in my own life:
Research & Development
R&D. This is my favorite department. This is where shit goes wrong.
The lab of your life. Here you can make mistakes, learn from those mistakes, and try something new and different. R&D is often an expensive line item on any cash flow statement. That’s because new ideas are hard to develop and take a lot of time and money.
But new ideas are also the lifeblood of growth.
This could be the purchase of a new book, the pursuit of an education, or the beginning of your own business. I’m of the opinion that R&D deserves a lot of attention. It’s here that we begin any new endeavor in life. New hobbies start here. New knowledge is learned here. New limits are found here.
Dedicate much of your energy towards Research and Development and don’t be discouraged when a project fizzles out. Adapt. Avoid the same failure on the next project. Profit.
Operations & Sales
I view my main source of income as my Operations and Sales Departments. My career. My job. Naturally, these Departments will take up quite a few waking hours, and when you own your own business, time is money. If I’m selling my time, it better be to the highest bidder that meets my specifications.
Make sure you are at least content with your job. It doesn’t have to be your passion, but it shouldn’t sap so much of your energy that you don’t have any left for the other areas of your life at the end of each day.
Always seek to maximize this area of your life. A healthy balance of earning and learning more and more each year is key.
Daily life. Your Admin Department is responsible for paying your bills, scheduling your calendar, and keeping up on the maintenance of your health and wealth. It is here that the general management of your to-do list resides.
Hold annual reviews of your relationships, your fitness level, and your hobbies. Are you dedicating enough time to each? Are you getting enough sleep? Did you play with your pet today? What activity really recharges your battery and when did you last do it?
These are all things that everyone has to deal with but don’t always want to. It could easily be called the Procrastination Department. But these are the activities that if left undone would cause the unraveling of your life, so it’s easy to see the importance of managing it well.
Put as much of this business function on auto-pilot as you can. Wake up when your alarm goes off. Turn on automatic bill pay. Keep a journal. Do your taxes. Floss your teeth. Bring your gym clothes to work and go straight after. Meal prep. Plan your weekends and evenings.
A well managed Admin Department is the difference between a mediocre company and a great one.
For more tips on running your own admin department, check out this article from AOM: How to Better Manage Your Life Admin
Finance & Accounting
We spend so many hours of our life working our day jobs to earn our paychecks, yet many people rarely put in the time to learn how to maximize it once that direct deposit hits their bank account.
“There’s more to life than money,” they say. Right. So wouldn’t you want to make more of it while doing less of the things you don’t want to do? The opportunity cost of poor financial habits isn’t that you simply have “less money” to spend than the next guy. It’s that you guarantee you will have less time than the next guy to spend on the things that really matter. Money buys freedom, knowledge, security, and time.
Greater knowledge of your personal finances is a very worthwhile pursuit. But it’s absolutely necessary when you’re the CFO of your own life.
You have 480 hours in a month. Commit to spending at least 1 of those hours per month reviewing your finances. Just 15 minutes each weekend tracking and reviewing your expenses and reviewing your investments or learning more about investing in general.
A business knows where every penny comes from and goes to. Track every cent. There’s more apps and software than ever before to accomplish this. (I still just keep receipts and use Microsoft Excel. Simple, yet effective.)
The trick is that by tracking and entering your expenses manually, you’ll slowly realize over time which expenses are frivolous and which are meaningful. I love entering a line item for a new book purchase because I know it’s an investment in my mind. But I hate entering the line item I spent on a speeding ticket or getting drunk at the bar.
Increase your 401(k) contribution. Don’t have one? Start an IRA. Not ready yet? Listen to some financial advice podcasts. Don’t have ears? Read more on The Sensible Merchant.
Check out my three part series on simple ways to save more money.
You need to advertise yourself as the product. Your appearance, your communication skills, your resume. All of these are just like a miniature version of a Marketing Department. It’s here that you can game the system just like marketing professionals try to game your mind.
Despite what the headlines on Vox would have you believe, unconscious biases are not going anywhere anytime soon. How you dress matters. How you speak matters. How you show up is more important than showing up.
Spend time and energy working to improve your self-image. ‘Impressions’ aren’t just a way to track digital marketing. Subtle improvements to your self-image compound over time and may open doors that otherwise might have remained locked.
When you find out something isn’t working, you need to find out why. What’s the root cause? Destructive habits, patterns of negative behavior, and miscommunications are all an opportunity to do better next time. But only if you can recognize them as such.
Therapy can be incredibly useful in this regard. I recommend it before you think you need it. But even if you don’t seek out a professional therapist, simply reading up on the wide range of topics from reputable mental health experts and applying the knowledge in your life can be beneficial.
Meditation is also an excellent opportunity to turn a critical eye to your shortcomings and failures. There’s likely at least one area of your life (or ten if you’re me) that you aren’t acting as your best self.
Regrets can point you to your north star if you’re committed to being better. And those insights are easier to get when you’re not incessantly chattering to yourself in your own head about the past and future and trying to control your experiences.
Becoming aware of our own blind spots, or where we know we are acting incongruously with our values, is incredibly valuable if we want the business of our life to succeed and do better tomorrow.
I know this metaphor is a little corny or cliche, but I think it helps alleviate some of the pressure of life. Everyone knows things go wrong at work. Things go wrong on a personal level all the time too. Thinking of each pillar of your personal life as a business unit that is simply seeking to maximize your joy in life can be helpful because it alters your perspective on almost any situation:
Feeling stagnant or bored in the evenings watching Netflix? Your R&D Department can surely cook up something new and interesting to pursue.
Passed over on a promotion at work? Time to apply for a new job and make sure your Operations Department is working at full capacity.
Getting behind on bills or wish you were better at remembering birthdays? Surely your Admin Department can find a way to automate those “front office” recurring tasks.
Insecure about how little you have saved for retirement? As the CFO, you’re in charge of where every penny goes. Hold yourself accountable.
Tired of being single? Your Marketing Department likely has a few tips on dressing better from a fashion blog or learning how to feel more confident and relaxed in your own skin by reading a self-improvement book.
Yelled at your significant other just because you’ve been in a bad mood? The Quality team might have something to say about your most negative reactionary impulses.
The entrepreneurial spirit lives within all of us. Rally your inner team of experts and get to work! No Zoom meeting necessary.
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