This is Part 2 in a series about the age old question: Is this investment “worth it?” Read Part 1 here.
Whenever someone asks me “is it worth it?” my answer typically is “it depends.” The question about whether something is “worth” the investment of your resources doesn’t have an easy answer.
Nothing is one size fits all.
Whether an investment is “worth it” is multi-faceted.
Here are the three crucial factors to examine as you decide whether an investment is “worth it.”
(1) Your Outcome
What is the result you are trying to achieve?
If you don’t know what result you want, it’s hard to evaluate whether the investment is “worth it.” This may sound obvious, but most people lose sight of this very quickly — if they ever knew in the first place.
Good marketing is designed to make you feel like your life will improve if you just buy this new device or invest in that program. Before you move forward, step back to consider what result you want and whether the investment “vehicle” can reasonably help you obtain that result.
Keep in mind that you may have multiple results, some of which may be in conflict with each other. In that case, you must decide which results are most important to you.
As important as it is to know your outcome, it’s also important to consider that the reason you think you’re doing something is not necessarily the reason you’re doing it.
Life is not always linear.
Your investment may open the door to results that you don’t even know are possible, because you can’t see all possibilities from where you stand.
(2) Your Time Horizon
What’s the time frame in which you want to achieve that outcome?
You know the result you want to achieve. When do you want to achieve that result?
Something to consider here:
Is your expectation reasonable?
One mistake people make in this context is that they consider a time horizon that is too short.
Results often take longer than we expect. You might make an investment today that doesn’t appear to yield much return, but only because you’re looking at a near-term time frame.
It’s possible that with more time, that investment will pay off big.
How patient are you willing to be?
(3) What You Value
In evaluating any investment, you must look at both ends of the process:
What asset are you investing, and what’s the potential return?
What’s the value you place on each of these things?
What You’re Investing
Most people look at investments in a linear way, focusing only on money. But money isn’t the only currency of investments. In addition to (or sometimes instead of) money, you might be investing time, energy, attention, or emotions. You may be “investing” in the form of giving up something you love to focus on another outcome.
Most people invest significant amounts of time, energy, and emotion in things like reading and reacting to news, social media, ruminating over decisions, or working on things that don’t move them forward, without thinking about the return on those investments. And those same people might balk at investing in a coach who can help them move forward, because the coach requires an investment of money.
What You’re Getting
Some investments are straightforward: invest money to make money.
Not all investments yield tangible or measurable results.
If you invest in attending a personal development seminar, you may see a boost in your income, but that’s a side benefit.
The main return on that investment is increased self-knowledge and self-awareness. This may translate to improved self-confidence and self-worth. You might find a new peer group, or improve your relationships.
These things may not be measurable, but it doesn’t mean they aren’t worthy returns on your investment.
In fact, sometimes the most valuable returns on investment are priceless.