A Unique Return on Investment
Sometimes the returns on our money come from funny places. For some reason, during the past few days ROI - return on investment has popped onto my radar from a variety of places. I think the first was from a friend in the commercial appraisal business, Robert Gagliano who wrote a really clear and interesting article titled Big Artie and Little Artie and Cash on Cash Return. You might give it a read.
Then I learned that billionaire Mark Cuban and the owner of NBA's Dallas Mavericks purchases everyday items like razor blades and toothpaste in bulk batches, stuff he knows he'll use in the future as an investment strategy. The man is an avid social Tweeter with over 1.7 million followers. A number of months ago he tweeted "The best return on your money? Buy in bulk at a discount, things you will definitely use. Smartest money move ever." As a follow-up to this, a reporter with NPR - National Public Radio has decided to incorporate the help of a research fellow at Stanford to put Cuban's philosophy to the test. In general they want to compare and see if they can earn a return of up to 5% by buying in bulk things that they know will not spoil and that they will ultimately put to use. The experiment will last one year and NPR will publish the results.
What really made me stop and think about ROI this week was one of my own personal purchases. A blow dryer. By now I know you're saying really, a blow dryer? Come on! So here's how it went down. Instead of doing my normal shopping on Amazon.com, I walked into a local beauty supply. The array of blow dryers was dizzying, ranging in price from very small and seemingly low-power models in the $15-$25 range all the way up to $250. How in the world was I to choose? The newest trend in low dryers is recognizing that positive and negative ions exist in all substances. They supposedly make hair positively charged through the use of an iconic hairdryer. The dryer puts out negative ions so the water molecules penetrate deep into the hair. Wow! Who knew? So I sprung for one somewhere in the range of $45 and look forward to its first use. I was not disappointed. And about that return on my investment, it cut my drying time by about 50% and left my hair smooth without having to use any other tools or solutions. Nice.
Having had these nudges into looking at return on investment in other areas of my life was motivating for me and so I thought I'd share them with you, thinking they might have a similar impact. Of course, as we know, money return on investments is only one way to look at things. Every day we make hundreds of decisions about where were going to use our time, our connections, our resource tools, all of which are little more difficult to measure in terms of dollars, but if done wrong can be really costly.
One thing we know for sure, return on every investment is always directly related to how much investment costs. The more you spend, the lower your return. We also know that future ROI's are always a semi-educated guess - nothing is a sure bet and you can only know your ROI after you've made the investment. Makes it a little challenging, doesn't it? Or is it just more fun? . I was even motivated to take a stab at a number of websites that let you run scenarios on both human and monetary ROIs.
Clearly my run-ins with ROI were telling me something. As a result at the office, we started looking at several places to make little changes to either increase productivity, improve customer relations for a higher ROI on every sale, reduce learning curves and/or save money. I hope you're encouraged to do the same. I think you'll like the return.
