The Importance of Measurement
I know that Phil and I are always talking about the importance of ‘getting started’ when it comes to Lifestyle Investing. That’s probably because getting started is the hardest part. Once you do get started, though it does become easier, you need to check your map and compass periodically to make sure you are heading in the right direction.
One of Dr. W. Edwards Deming’s seminal contributions to the post WW2 advancements in the field of continuous improvement was his Plan, Do, Check, Act or PDCA cycle. 
This method remains to this day an integral component in the ISO Quality standards which today are so prevalent in the business world. But…all of that is a story for another day.
Yet there is a lot we as entrepreneurs and even solo-entrepreneurs can learn from this simple approach such as: Planning to do something, Doing it, Checking how well it worked and taking Action to fine-tune it. This simple process is how success is ultimately achieved. No matter what we do in life it’s vital that we measure our performance in order to gauge your progress. This mentality and approach has its roots in the ROLI Calculator.
I remember I had an old car when I was in college and the fuel gauge did not work. I knew it was broken so I would try to make a note of how many miles I had driven so that I could fill up before running out of gas. But, as I apparently had more important things on my mind, I managed on more than one occasion to run out of gas and was forced to walk a few miles to rectify my mistake.
If you think about it we take gauges like these for granted all the time even though they are crucial to our success. Yet we will often take actions in business or in our private life with no clear way of measuring the degree of success or failure.
Nowadays no matter what I do I try to measure it. Even on my mountain bike I have a speedometer which gives me a readout of my speed, distance traveled, etc, etc. I also use a heart rate monitor to see what my effort is doing to my pulse. The same thing goes for business ventures, whether it’s a Google ad campaign or a split-test on a blog page I must know what is working and what is not so I can make the necessary changes to keep improving the performance.
So just remember, no matter what you are doing, make sure you have designed a way to measure the effectiveness of that event or activity. As the old saying goes, “You can’t manage what you cannot measure.”
Leave a comment with your examples of something you’re measuring in you’re life or work…
Want it? Well then Design it.
What do you want?
Easy question, right? Well, not so easy, at least for me, if you really think about it. We all want different things and “wants” seem to change as you journey down life’s road. Want can be driven by so many factors in our lives and each answer is as personal as we are individual.
Wants and desires are good in that they drive us ahead and we will always have them. If you really want to change your life and increase your ROLI you need to figure out what you want. Approach the question from a different direction. Ask yourself “What is my life like next year. . . in five years?” Use that as a framework for figuring out what you really want. What things do you want that will get you to that 5 year vision of yourself? Write all of this down now if you haven’t already started to do that.
Guess what. . . . you have begun to design your lifestyle which is the first and arguably the most important step in this journey. Done correctly this list of wants, this lifestyle design will be the basis for all actions going forward to make this change in your life.
I will relate a personal example. I am an American but I live in Norway. Why? Because I want to. My wife is Norwegian and we decided that we would make the effort to expose our kids not only to American culture and way of life but to Norwegian culture and way of life. Enriching my family by living in another part of the world and learning another language is something I wanted. Living in Europe for a while is part of my 5 year lifestyle design.
Once we had created our lifestyle design we began (and still continue to) to take action. In less than 6 months we figured out how to earn an income in Norway, sold our house in the U.S., packed the things we wanted to take, shipped them overseas and then actually moved. For me, the execution of the plan was really just steps we took after figuring out the harder question. . . . what do I (we) really want?
My example is just that, it is mine. Obviously, it is a “want” shared very closely with my wife and family. Your lifestyle design will probably include very different things. The point is not where I am today, but how I got here.
Design your lifestyle, don’t wait another minute if you haven’t started. Spend time really thinking about it and be detailed in your description. You’ll come back to this design as a reference constantly. It all begins with a simple question.
What do you want?