There is something deep within us that wants to stay busy. We want to do something, even if that something doesn’t add any value. Often you will hear people say that they are just too busy to take anything else on. When you ask them what is keeping them so busy, however, it turns out that they are just extremely inefficient at doing whatever they are doing. This doesn’t mean that they will be less busy if you can teach them how to be more efficient, it only means that they will be able to do twice as many things in the same amount of time.
In the work environment, efficient people are the ones at the top of the food chain when it comes to being in demand. How fantastic is the feeling you get when you have to get something done and after dreading the potential struggle, the matter is sorted out in next to no time by a super-efficient person. Although there are some personality traits mixed into being efficient or not, a lot of it must be learned. To be efficient you have to be able to prioritize, delegate, focus and never procrastinate.
Investments can also be efficient or not. Cash is inherently inefficient. Cash will never try to find better ways to increase your returns. It will always be happy to stay on the couch and not run the risk of being run over by a car if it should venture outside, seeking new opportunities.
Equities, on the other hand, is a very efficient asset class. When investing in equities, you basically invest in companies. Companies live in a world where the pace is frantic. There is always a competitor trying to steal your lunch; or a technology making your business redundant; or even a politician forcing some crazy policy down your throat. But all of these potential hazards make the good companies rise to the top and cement a high level of efficiency into their DNA.
Look at it this way: if there is a stream starting high up in the mountain, you will always be able to have a drink in the rainy season, but in the dry season you might have to work harder to find some water. If you do some work and build a dam wall, you will ensure that you will always have some water to drink and that any excess in times of plenty doesn’t just run wastefully into the ocean. It makes sense to work hard, make some money and then work smart and let the money work for you!
