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Why Economists never mow their own lawn, and if you want to make money… neither should you.

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ChrisV

ChrisV

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Even better, figure out what you WANT your time to be worth, and then only focus on tasks that generate that level of return.
Very good point. That way it incorporates all the intangibles as well.

In real life, there are a number of factors. For instance, some of my clients I charge less simply because I love working with them and I think their workis important for humanity. Some I charge more because they make me want to pull my hair out.

I think that choosing what you want your time to be worth incorporates those intangibles as well.
 

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ChrisV

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Also, outsourcing can put you into the poor house fast. Every dime you spend comes off of your bottom line.
You're missing the overarching point here though, the point is that often outsourcing saves you money. It's not to say you should outsource then go play FarmVille. You should outsource then go do things you specialize in. Or go play FarmVille if it's worth it to you. Whatever.

Also, the post isn't about literal lawnmowing lol. It's a metaphor. Imagine Jeff Bezos taking time out of an important merger meeting to go mop the third floor of Amazon HQ. Imagine a $300/hr master electrician spending 3 hours cleaning up, rather than just hiring someone and paying them $12 an hour to do it. In both cases they're taking time away from what they're good at to go handle tasks that can easily be outsourced.

My tenants have that attitude. They won't do anything that they don't wanna do. OK. That's why they are my tenants rather homeowners. And yes, I can hire someone to do all the chores around here. At times I do. BUT, there is NO chore that I'm too good to do.
And some people prefer being tenants and not homeowners. I almost got a condescending tone regrading tenants in that paragraph as if tenants are suckers and homeowners are the intelligent elite. There are tons of very wealthy people who choose to not own a home for that exact reason. They don't want to be bothered with maintenance tasks that have a market value of around $12/hr. I've owned homes and in my opinion, it sucks. I really don't have the time or energy that comes with all the crap that comes with home ownership. I'd rather just spend the time doing stuff I'm good at rather than trimming the hedges that I can pay someone $12/hr for. A lot of people choose to not own homes. There are apartments in Manhattan that cost $40,000/mo. Those tenants could easily buy a home if they wanted to but they don't want to be bothered with menial tasks such as trimming the hedges or doing taxes or all the other headaches that come with owning a home.. Sure, sometimes it's pure laziness and short-sightedness, but often times it's the smartest decision.
 

Mike S

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You got it figured out. I've never read a post from you @minivanman that I didn't like.

As for the apt. lifestyle - I life in a townhome. The landscaping is pristine - landscaping magazine quality - and I go swimming every night in a big heated pool, which I usually have all to myself. Heaven, man - heaven.

BUT I pay for that lifestyle. $330 a month HOA. With my health club and country club, I almost can't afford myself. Wouldn't be bad if I made the bucks MJ makes...
We sold our big house 5 years ago, I sat down and did the math, after comparing the HOA fees vs outside maintenance, landscaping, structural insurance etc... we were WAY ahead by living in a townhome. Also, it allows us the location independence we desired, when we leave for an extended period of time, I shut off the water, turn the HVAC to 50 and don't look back. Spending 3 months in the Keys beats the hell out of winter in Cincinnati.
 

lucasb

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Peter Drucker calls this DISCRETIONAL TIME, in his book The Effective Executive.
It is the time we spend doing tasks that really make a difference or contribution in our position or function.
He says that if we write down everything we do in a week, people are surprised to see the little time they spend doing things with importance.
The solution for anything we do is 2 or 3 tasks that really make a difference, you have to go back to them again and again.
 
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ChrisV

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Peter Drucker calls this DISCRETIONAL TIME, in his book The Effective Executive.
It is the time we spend doing tasks that really make a difference or contribution in our position or function.
He says that if we write down everything we do in a week, people are surprised to see the little time they spend doing things with importance.
The solution for anything we do is 2 or 3 tasks that really make a difference, you have to go back to them again and again.
One thing that really helped me with this was using Time Tracking apps. I have apps that analyze where I go, how much time I spend there, what websites I'm visiting, what apps I have open, what articles I read. It's really easy to look at where you're wasting time when you get a birds-eye view of where you're losing time.

On a related note, I also used to monitor everything I ate, what I spent money on, how much i slept, meditation, and a number of other things. I was really big on the Quantified Self movement a little bit back, and really should get back into it. When you have data on all these things, you gain a lot of insight over your life.

The Quantified Self refers both to the cultural phenomenon of self-tracking with technology and to a community of users and makers of self-tracking tools who share an interest in “self-knowledge through numbers.”[1] Quantified Self practices overlap with the practice of lifelogging and other trends that incorporate technology and data acquisition into daily life, often with the goal of improving physical, mental, and/or emotional performance.The widespread adoption in recent years of wearable fitness and sleep trackers such as the Fitbit or the Apple Watch[2]


What happens if a country focuses its entire Economic development lets say on the oil extraction. Assuming new technological advancements in battery capacity and renewable energy sources there's a shift in demand for its products and now its strengths become a single point of failure who can destabilize an economy.
Interestingly enough, this is why they built Dubai. Sheikh Mohamed realized that the oil would eventually run out or the world would come up with another energy source and leave them in the poorhouse. So they built Dubai so that if and when the oil money stopped, they would still have streams of revenue.

Screenshot-2017-01-11-at-4.59.58-PM.png

I think it's something like MJ's commandment of control.
 

Ismails

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I had a random thought and figured I’d post it here. There’s a saying in Economics which is “Economists never mow their own lawn.” Why don’t they mow their own lawn? Well simply because they understand Economics. They understand the nuances of economics well enough to know that by doing a task they’re not trained for, they’re actually losing money.

By taking on menial tasks you’re losing the opportunity cost of another task that can be more profitable for you. Many people think they're saving money by looking something up on online and trying their hand at it. They want to be the CEO, the advertiser, product development, and everything in between. And to be fair, when you're first starting out, sometimes you have to. But as you grow and you want to take it to the next level, it's necessary to just focus on what you're good at.

How much is your time worth? To figure this out simply take your weekly profit and divide it by the amount of time you typically put into your business. How much time would you have spent mowing your lawn (mowing your lawn being a metaphor for whatever tedious task you have in your way.) How much would it have cost you to to simply outsource that task instead? I bet it's less that what you're making.

We're talking about any task that takes away from your time doing more productive things.

People who just focus on what they’re good at are more successful. It’s why income generally correlates with population density. It’s why people who lives in cities have a higher per capita income than those in rural areas. In rural areas, the shear distance of everything makes it so that peoplehave to be a jack of all trades, never specializing in one. In cities, everyone has a specialized task. There’s the baker, there’s a maintenance man, there’s a chef, theres’s dog groomer, and you’re free to do what you’re good at. Everyone does what they're good at. No one has to waste time doing a task they’re not trained for.

(A little off topic, but if you want to become ultra successful, living in a city is one of the best things you can do. In the book “Everybody Lies: Big Data, New Data, and What the Internet Can Tell Us About Who We Really Are” data scientist Seth Davidowitz asked the question “what do multimillionaires and the ultra famous have in common,” scraped the data ans crunched the data to find the answer. The answer was: many of them moved to a big city before they made their money or fame. The reason is specialization and networking, both of which are much easier in a large city.)

But back on topic: What are the things that you do that almost no-one else can do? The things that can’t be outsourced. By outsourcing everything and only doing only those things you benefit in numerous ways. First, it’s simply more profitable in the short term. Second, by continually doing those tasks over and over, you become incredibly proficient at them, which increases your profits even more. You gain an expertise at those tasks, and by being better and faster at them, your market value goes up.

My personal suggestion is to find whatever tedious tasks you do every day, and find a way to systematically eliminate each one. See what’s taking you the most time and get rid of it. By doing this you boost your expertise and can focus on the things that make you the most money.

Remember: lone wolves make terrible hunters. Let everyone do what they're good at.
I will be damned
This is REALLY GOLD Post
Thanks Chris!
I appreciate you!
 

daivey

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Great thread Chris. There are a few things that I must say I operate in contrast to this.

I mow my own lawn. It takes less than an hour, but I know I shouldn’t be wasting my time on it. I hope to find an enterprising neighborhood kid instead of a service. I'll sell all of the equipment and get some garage space back.

I have found that the lube shop dog and pony show takes an hour+ when I can just order my oil and filter on amazon. Literally it takes me 10 minutes to do it myself. The only way this can get better for me is if I sent my driver to do it. So until I have one of those, I'll change my own oil in whatever car.

Haircuts? Same deal. No appointment, no waiting, no driving, just 20 minutes of my own time instead of an hour+ and I like the result.

Flying my own plane? That is just fun, but I will want a pilot.
yes exactly. the downside of car maintenance is that going to a dealership/shop takes time and you are waiting.
 

Bertram

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It takes me about two hours to mow my lawn, and one of the reasons I continue to do it is that it's forced quiet time. I can't answer client phone calls, or send emails, so it gives me a chance to think about big-picture items, and mull over some of the thoughts that have accumulated.

While I understand the efficiency argument of outsourcing everything below your hourly rate, I think there's a lot to be said for mindless tasks, in terms of energy recovery. If we're doing $1,000-an-hour tasks all day every day, is that sustainable? Maybe it is, but my inclination is that you need some recovery time to be able to operate at peak efficiency/effectiveness.
Creativity is replenished by engaging in a range of outlets, such as music, cooking, landscaping, sex, writing books, reading, repairing lawn mower.
Simple activities provide two major benefits, slowing down to let ideas and solutions percolate, and secondly to provide strong sensory feedback through empirical experience.
I think that those who change the oil or iron their own shirts are better at avoiding distraction than those who live in abstraction. It appears to treat ADD/ADHD.
 
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Bertram

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It takes me about two hours to mow my lawn, and one of the reasons I continue to do it is that it's forced quiet time. I can't answer client phone calls, or send emails, so it gives me a chance to think about big-picture items, and mull over some of the thoughts that have accumulated.

While I understand the efficiency argument of outsourcing everything below your hourly rate, I think there's a lot to be said for mindless tasks, in terms of energy recovery. If we're doing $1,000-an-hour tasks all day every day, is that sustainable? Maybe it is, but my inclination is that you need some recovery time to be able to operate at peak efficiency/effectiveness.
Creativity is replenished by engaging along a range of outlets, such as music, cooking, landscaping, sex, writing books, reading, repairing lawn mower.
Simple activities provide two major benefits, slowing down to let ideas and solutions percolate, and secondly to provide strong sensory feedback through empirical experience.
I think that those who change the oil or iron their own shirts are better at avoidinv distraction than those who live in abstraction. It appears to treat ADD/ADHD.
 

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