It’s amazing what a difference a small investment of time and money can make. I recently took my kitchen knives to a professional knife sharpener. It cost about $5 per knife and less than 20 minutes. When I took them home, I found that they were better than new. I actually wished we had more vegetables in the fridge so I could chop them up.
I’m sure you’ve heard the expression to “sharpen your saw.” I first heard the phrase in Stephen Covey’s classic book, 7 Habits of Highly Effective People.
It’s based on a concept, often incorrectly attributed to Abraham Lincoln, that in order to fell a tree: “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”
Covey explains that taking the time to renew and refresh your knowledge and skills will make you more effective.
I was reminded of this saying last week when an advisor told me he was just too busy to learn a particular financial planning topic.
My advice to him was as follows:
- Create a research journal (or just a list) of all the things you want to learn more about. We’ll often think about (or hear about) an idea or concept but aren’t able to investigate it right then and there. For example, after seeing another headline about inflation, you may realize that you don’t have a solid grasp on the difference between CPI and PCE. By writing it down, you can remember to research it later.
- Pick a regular time to learn new things. Unless you block time to research important topics, you’re not likely to “get around to it.” You might choose Friday mornings or afternoons as your research time.
- Set a goal. Decide how deep you want to dive into a topic. Do you want to become an expert, or do you simply want to be able to respond to a question when asked? Here some levels to consider:
Explain the general concept to someone. For example, if you were researching bitcoin, you might want to be able to explain the difference between bitcoin and Ethereum.
Take a position. The next level of knowledge is to define your personal view on the topic. For example, you can explain why CPI is more important than PCE or why cryptocurrency isn’t a good hedge against inflation.
Take action. The third level is to take specific action(s) in response to your newly acquired knowledge. If you believe that cryptocurrency does provide protection against inflation, what steps will you take to incorporate it into your clients’ portfolios?
With a little bit of time and effort, you’ll continue to improve your knowledge and skills week by week.