Carl Richards talks about the four types of capital we all have available to spend. Money, Attention, Time and Energy (MATE). He recently unpacked his thinking on this excellent episode of the Kitces and Carl podcast.
If you ask most people what they value most in life, they will give the answer that they think you want to hear. They might say time with my wife, or children, or friends, even giving back to my community. A good way to test whether it is true would be to look at their bank account.
Where we spend our money is a more measurable test of what we value than what we convince ourselves we do.
The same applies to the other three types of capital.
Time and energy is obvious. We put our time into the things we value, if you look at your diary and find that you are spending your time, asleep, working, engaging in relationships, in that order, then you are like the average person and that is where your focus is. The same goes for your energy.
Looking at what we spend our time, money and energy on, shows our revealed preferences, which can be a shock to the part of us that still believes in our stated preferences. Data will always trump opinion when it comes to assessing this.
Whatever type of capital we use up, we need to start viewing it as ‘spending’. When we spend money it is more obvious but giving time and energy to an activity, project or someone else is still a form of spending. We are all born with a limit to the amount of this capital that we have left. We should spend it more intentionally.
The last type of capital, attention, is a more recent addition.
Our attention must be one of the most valuable forms of capital we own because the global economy has shifted to monetise it. As Carl says, ‘There’s 300 Ph.Ds. on the other end of this fight at Facebook, or Instagram, or wherever. So, we just have to be aware.’.
As technology has delivered on its promise to do more of the work for us (at a low cost point), we have given away the hours that have freed up. Given them back for free to the very technology companies that created them for us in the first place.
It has been slow and insidious, but social media in all its forms is now sucking up more time and attention from us than almost anything else. This is to our huge cost, as this is time and attention we could be spending on other more rewarding things. Scrolling on these apps gives us little to nothing positive back.
So, as we approach a New Year, think about doing these simple things:
- Look in your banking app at what you spent this year.
- How much was on ‘things’ and how much on experiences.
- Look in your phone at your screen time for this year.
- What else could you have spent those time and attention budgets on.
- Think back to the activities from this year that drained you the most and those that boosted you the most.
- Have you focused on the right activities.
We can’t help you to allocate your MATE better this coming year (unless you are going to give us access to your screentime stats) but we can free you up from worrying about your financial situation. Giving you back time to spend on more rewarding things.