It is critical to learn the difference between a cost and an investment

There is something my father once told me that has never left me. I was a big book-reader as a boy, and much of my meagre pocket money would go towards buying books, often from Nairobi’s two second-hand bookshops of that time.

I was once worried about the spend being incurred, and wondered out loud whether I was spending too much on books, given that I was mostly buying boyish thrillers. My father looked up and said: “Books are never a cost.

They are an investment. Know the difference.”

After thinking about that, I never again worried about spending too much on books. Even in times of financial distress, I have bought books. I cut many other budgets before I touch the books budget. And I don’t regret it for a minute. I have written this column for 20 years on the back of the books I have read over the years.

Books have given me knowledge and enlightenment, language and grammar, wisdom and provocation. I may have spent a great deal of money on them — and not every book was worth the time or money spent — but taken as a whole, the return on that investment is immense.

A cost just drains your resources; but an investment will start paying you back. Over the years, I began to understand that there are other things in life that look like costs, but are actually investments.

Better food

Some are obvious. Spending time and money on your health — on better food, or on exercise, or meditative practice—can feel punitive and unnecessary. Until the consequences of not spending arrive! 

If spending on essential home improvements raises the quality of your daily life for long periods, it is worth viewing as an investment rather than a cost. It also may bring an additional return, in the form of enhanced property value at the point of sale.

Let us consider some more nuanced examples of cost vs investment. Let’s begin with the cost of learning. I am always startled by the ease with which people ignore self-improvement. We do not live in a world where one set of skills acquired long ago can see your life out. Learning is now lifelong, continuous and systematic.

Whether you spend big money on it, or do it through books, or through the vast treasury of cheap online resources now available — you have to do it. Money and time spent enhancing your knowledge and skills is not a cost; it is a vital investment. The only trick is to choose carefully and to focus on learning that reaps returns, even if those returns accrue far into the future.

Skilling and reskilling 

The same applies to skilling and reskilling your team. A big cost, right? Nope. Investment. As long as you spend on learning experiences that grow the person and bestow new, much-needed skills, you are investing in future growth. What is the option? To spend nothing, and sit atop a resource that slowly atrophies in relevance and ability to generate returns?

Another example. For most people, time for rest and recreation is downtime, time when the opportunity to earn is lost. Many end up viewing their holiday as a cost, not only in terms of the expenses incurred, but also of revenue lost. I have never seen it as such.

Time taken to rest, reflect and recharge is an investment in yourself. It keeps you fit and able to keep going. It gives you time to pause and think and rethink. It exposes you to different settings and cultures and situations. It stimulates and keeps you sane.

The alternative, of working most available hours in manic fashion doing the same things, is a recipe for madness. Indeed, it becomes a cost in itself. It often leads to early burnout; it stunts your thinking; it keeps you spinning your wheels and repeating the same old mistakes. It makes you narrow-minded and frankly uninteresting to anyone but yourself. 

If you don’t take time to rest and to see the world and open up new experiences for yourself, you are making a false economy, and generating unsustainable, short-lived returns.

In understanding the dichotomy between costs and investments, it helps to be clear about what is being saved, gained, or lost. We don’t spend on certain things because they feel unnecessary and onerous, and that is fine.

Lots of expenses can be avoided with little harm, and we must all cut our suit to fit our cloth. But there is a set of expenses in life — in money and in time — that reward a different perspective. If a particular spend will throw up some gains — in future returns, or in your health, or peace of mind, or sustained happiness — then it is worth evaluating differently.

We should also ask what is being missed — or the opportunity cost when we do things one way and not the other. When we fail to spend on self-improvement, what do we fail to do? Improve! Not spending on health and wellness, knowledge and smarts, revival and revitalisation? Now that might really cost you.

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