Ask yourself: What is your mind worth?
All day every day you are making decisions about how to use your time and mental energy.
Time and mental energy are finite resources, and making a habit of using them wisely pays compound interest.
This is extraordinarily difficult to do well, because our brains are bad at knowing the best use of our energy. Your brain is full of biases.
One of those biases is loss aversion. We avoid losses at as much as TWICE the rate that we pursue gains. However satisfied we feel to gain $100, we would feel twice as miserable if we lost $100.
This holds us back throughout the day. As we fight to avoid losses, we miss out on gains. You need to reprogram your brain to free up time and energy to be productive.
I had to do this calculation which we don’t do enough, which is “what is an hour of your time worth?”…It would be cheaper if I drove my car there, but if I take an Uber, I can sit in the back and I can work, or I can do a phone call.
I try to leave money on the table when I’m not actually leaving money on the table, it just feels like I’m leaving money on the table.
Notice Ryan talks about how deciding to spend money on an Uber feels like he’s losing money. He’s aware of the shortcuts his brain wants to take, and he compensates for them.
How can you break free of your brain’s loss aversion?
- Trying to decide between two brands of sardines that have a 20 cent price difference? You’re wasting energy. Just pick one.
- Trying to choose between working on that $50/hr client project, or going grocery shopping? Order from Instacart.
- Did you see a Groupon for a restaurant you think maybe perhaps someday you might want to try? Ignore it. If you buy it, you’ll have to spend mental energy on remembering to use it.
Obviously, this is different for everyone’s finances, but you can be sure that your instincts are already leading you astray. This is a skill you can build to maximize your time and energy, minimize worry, and fill up your life with your best work yet.