Monday, February 17, 2014

How will you take your profit?

Life is a series of cost/benefit analyses. We learned that in macro and micro economics in college. Today, high schools across Florida are offering economics education, a boon to the students that will proceed to college on a non-business degree track and therefore would otherwise miss the cost/benefit analysis education. 

Essentially, these analyses are merely a considered approach to determining how we proceed in life. Is the benefit to us commensurate with the cost of that activity, action or inaction on our part? We do it naturally as humans. A co-worker invites us to lunch ("everyone else is going, come on"). We have  a brief due, need to prepare for a conference call, have a client coming in at 1:00, etc. 

The cost of going to lunch is both financial (the can of tuna salad in our desk is paid for), and time. We analyze, consciously or otherwise, the benefit(s) of camaraderie, office solidarity, friendship, a break in the work, against the cost of lost work time, having to catch-up after (will I have to work at home tonight to make up for this?), etc. 

In this regard, our workday is a limited resource. Do what you may or will, there are just so many hours in the day. As a natural consequence, we each have to make decisions about what we will or will not do and then how we will prioritize what we will do. There is a natural process of excluding what we do not want (or perhaps do not like) to do. It is human nature to avoid the tasks that we do not enjoy. These tasks represent a cost to us, that is whatever else we could spend our time doing instead (called an "opportunity cost" in economics class). We are more likely to accept the costs of activities as the benefit there from increases. 

Benefits are likewise all in the eye of the beholder. One may value higher earnings, and what that will buy, more than another benefit. Some may instead value time. I realized many years ago, after escaping the confines of a law partnership that focused on what the partners valued, that I could decide for myself how I would take my "profit." 

While in the partnership, success and income was measured in billable hours, collected fees, and production of business. Time was expended in pursuit of these through a variety of tasks and efforts including legal work, mentoring of associates, marketing of the firm, and improvement of personal skills. These all were assigned value based upon a collective compromise among partners as to what should be considered important. It is fair to say that partners do not always agree on what is important, and either compromise or consequences are inevitable.

I realized after leaving that environment to form my own firm that I could instead accept my "profit," that is the extra, in time. It was a revelation I reflect upon today with some pride and with significant gratitude. Instead of the next billable hour, the next client lunch, the next seminar, I could take the afternoon off. This facilitated the ability to be integrally involved in the lives of my children. 

I rarely missed a ball game, and never missed a concert. I spent weekends on camping trips, and hours judging debate tournaments. Each such effort was an economic opportunity "cost," in that each minute spent thus was minute I did not work and earn money. Each also had a great benefit to me, and more so to the family which depended upon me (and more still which I depended upon). 

There has to be balance. You have to work enough to live, and to support those dependent upon you. You have to live enough to justify the work however. How do you take your profit? As much as I might wish for a convertible sports car, I think that the rewards of the family with which I have been privileged far outweigh the dream car I might have otherwise purchased.

Today, I see people continuing to struggle with the questions of how much time to spend working. I hear stories about missed family time and feelings of over commitments at work. Each of us will face the analysis of how we will take our profit. In the end, we are really answering the question of what is important to us. What is important to you?

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