Welcome to #InspireAfricaProject! One of the biggest challenges in the school of success is the ability to manage both time and money. Millionaires are frugal when frugality translates into real increases in the economic productivity of a household. But when it comes to time management and productivity, they will hire people to major in the minor for them, while they focus on the core assignments that will guarantee unprecedented expansion!
But a poor man thinks that paying someone to do something for him is a waste of money. That’s why we have millions of startups across Africa that remains startup for many years, and dies the moment the owner die. To create wealth, you must have the ability to focus on what really matters, and hire people to do the rest for you. You might think that you’re loosing money, but on the long run, you will see the positive effect,
The challenge now is, how can we major in the main thing on daily basis instead of focusing on minor activities? This analogy will explain it better. (Join us on the 26th of June 2016 and gain new wealth creation insight at Inspire Africa Project Conference! Check the handbill below for more information).
“The plumber who just installed your new heater makes more per hour of professional time than you charge- was it a mistake to hire him instead of doing it yourself? What would a millionaire do? Millionaires and those who are likely to become wealthy someday are not “first-cost” sensitive; they are life-cycle-cost sensitive. “First-cost” refers to the dollar cost savings if you install the water heater instead of using a skilled plumber.
You may have saved $150 in the process, but the figure is very deceptive. The plumber’s quote included a high-efficiency water heater. You shopped and found a low-priced (first cost) water heater with the same gallon capacity as the high-efficiency one, but over the projected life of the heater, the plumber’s will save you more than the $150 in terms of operating cost.
Over the life of the heater you would install, there is no warranty on the installation. You could easily install it incorrectly and burn out the system. Even worse, if it is not installed correctly, gas could escape and asphyxiate you and your family. These issues are related to the real cost savings when contrasting first cost versus life-cycle cost.
Also, you cannot install a water heater and at the same time carry out assignments that are part of your work. Of course the plumber still charges more per hour than you charge for an hour of your time, so you could save by doing it yourself. But you are not thinking of life-cycle differences. You are not thinking like a millionaire.
Look at it this way; if you decide to install the water heater yourself, you have to shop for a unit, which takes time and energy. You could be using this time and energy to enhance your professional skills or study investments. It’s time you could be using to shop for new clients; acquiring one new client would be worth much more than $150.
Then you have to study water-heater installations techniques and acquire the proper tools. Whether you rent tools or buy them, it still takes time and money. Finally, how many other hot-water heaters will you be installing during the remainder of your working life? I bet you’ll never want to install another one once you’ve suffered through the first campaign to save $150. Why study plumbing if you are not going to be a plumber? After all this, ask yourself about the actual dollars you really saved. In terms of life-cycle cost-benefit analysis, select option number two: call the plumber!
I have repeatedly told people that millionaires are frugal, but many think the entire do-it-yourself concept defines frugality. Webster’s defines frugal as “characterized by or reflecting economy in the expenditure of resources.” The key word here is resources, and not just first-cost money or dollar resources. There are full life cycle resources associated with making a purchase or other economic decision.
The larger majority of millionaires are not do-it-yourselfers! They reason that it’s more productive to earn income from your vocation and use it to hire professional painters, carpenters, and plumbers.
I once asked a high income producing cartoonist-painter-illustrator the do-it-yourself question. At that time I was in his home, a large house overlooking the Hudson River Valley. As we spoke, I looked out and noticed a group of house painters setting up scaffolding around the house. I asked him about the cost of having such a large home painted. The price seemed so high I felt compelled to ask: “You’re a painter. Why not paint your own home?”
He responded quickly and to the point, telling me that he could make more money doing his job than the cost of having a crew of house painters do the work. Perhaps even more importantly he said: What if I fall off a ladder while painting the house? I could be killed or permanently disabled…never to be able to earn a good living. The cartoonist in this case is like most millionaires, they are hot penny wise and pound foolish.”- Thomas J. Stanley.
The question is, are you one of the do-it-yourselfers who believes that paying someone to wash your car while you focus on your core assignment is a waste of money? I learned this secret many years ago and it has helped me greatly.
As a business owner, your major assignment is to make sure your business is growing rapidly. To achieve this, you need more time to think, generate new ideas and plan for its execution. If you’re always occupied from morning to closing hour, it will be difficult for you to think and generate new ideas. So what is the way out? Hire people to major in the minor activities while you major in the major activities! You will learn more of this at the forth coming Inspire Africa Project Conference. Wisdom is profitable to direct. Remain ever life!
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