“If a man empties his purse into his head, no one can take it from him. An investment in knowledge always pays the highest return.” – Benjamin Franklin
Every successful business dedicates a certain amount of resources to trying new things. Research and Development (R&D) is what business leaders around the world count on to determine what the company should work on next. Large companies spend millions (sometimes billions) of dollars in speculative research every year, experimenting with new techniques and processes in order to enhance their capabilities.
R&D exists because it works – companies that make research and development a priority often discover new products to offer their customers or process improvements that meaningfully contribute to the bottom line.
If it works for them, it can work for you.
What would it look like if you set aside 10-20% of your monthly income as a personal R&D budget? Using the techniques discussed in I Will Teach You to Be Rich_ and _Your Money or Your Life, it’s remarkably easy to automatically divert a certain amount of your monthly income into an account earmarked for self-directed R&D. That money can then be used – guilt-free – in any way related to improving your skills and capabilities: purchasing books, taking courses, acquiring equipment, or attending conferences.
Personal finance gurus might disagree with me here, but I think having a robust personal R&D budget is more important than maximizing savings. I’m all for having a well-funded emergency account and saving a minimum of 10-20% of what you earn each month, but savings can only get you so far. Investments in improving your personal skills and capabilities can simultaneously enrich your life and open doors to additional income sources. New skills create new opportunities, and new opportunities often translate into more income. Your ability to save is limited; your ability to earn is not.
Here’s a simple planning exercise that will help you establish your own personal R&D budget: what would have to be true if you were already dedicating at least 10% of your monthly income to research and experimentation, assuming your current income stays the same?
All it takes is a little creativity and budgeting, and you’ll be well on your way to funding your self-directed research and development laboratory.
What are you doing to fund your personal R&D budget, and how are you planning to invest your funds?
Did you know both of my books are available as audiobooks? Think of them as very inexpensive course versions of the book. They're perennial bestsellers on Audible.com, and The Personal MBA was recently honored at the Audie Awards, the "Grammys" of the audiobook industry.
Even better: you can get one of my audiobooks for free if you don't yet subscribe to Audible. Click here for details.
A practitioner's guide to rapid skill acquisition. Accelerate your learning by deconstructing complex skills, practicing the most important elements first, and removing barriers to deliberate practice. What do you want to learn? More...