For those who invest money you know the secret to sustainable growth is balancing risk and return or having a balanced investment portfolio.
What does balanced portfolio mean and what does that accomplish?
Put simply a balanced portfolio distributes risk and reward opportunities across a blend of low risk low return investments to high risk high return investments.
Depending how big a risk taker or risk adverse you are will determine that blend.
If you don’t balance your portfolio and put everything in low risk low return (Ex. Bank Savings Account, CDs, etc) you stand the risk of not making a lot of return and possibly not keeping up with inflation, which over time means a reduction in your living standard.
The reality for most people is they do not have enough money saved to take advantage of a balanced portfolio, like the stock market there are a lot of ups and downs the end result is a good return but it can be a bit of a rollercoaster getting there and you need a fair amount of money to ride out the volatility. With out enough money you end up picking a side, either stuck in low return investments or gambling it all on high risk, neither present an optimal solution.
There is one way to change this.
Take the balanced portfolio approach and apply it to your time!
Time is one resource that everyone has the same amount; 24 hours a day, 168 hours a week, 720 hours a month.
Have you ever thought about how you are investing your time?
How much of it is invested in low risk low return like an hourly or salary job? That is not a bad thing as you need to have this type of investment in a balanced portfolio, but it shouldn’t be your only investment.
You need to find opportunities for investing your time in high risk high return ventures. Notice I am not saying money, just time. The benefit of this strategy is at the end of the day if the risk does not pay off (and more often times it will not) you are out only your time. The return is knowledge, experience and improved chances the next investment of your time will do better (if you don’t make the same mistakes twice).
How do you make this time investment?
There are many ways from starting a service, building a product or more simply finding a young company that can use help in growing, but can’t afford to pay much if at all. Negotiate a high return for your time if you are able to help this company hit certain goals. My personal favorite is to negotiate ownership in the company for your work and a higher percentage if you can hit predefined goals.
Remember these are high risk investments, do not be defeated if they do not pan out. Learn from the experience and you will be smarter on the next one. Smarter in picking the right opportunities and smarter on how much return you negotiate for your time.
Where do you get the time?
Start with replacing time you are investing with zero return like television or other low benefit activities. If you carve out just 45 minutes a day 6 days a week that is 4.5 hours a week. That is plenty of time to add value as a writer, marketer, graphic artist, consultant, laborer, even a sales person.
Find a company or person you believe in, that has upside, and get to work investing your time. The risk is actually low, it is just time and the upside can be huge.