Sunk Cost, Wealth Accumulation and Networking
All you need to thrive in the months ahead
Hello, my friends,
Isn’t it great to know that it’s a new year already? Happy new year from me to you. Of course, last year I told you already that these emails will now come as often as I can write them. So let’s get to it this year.
I will be talking about different things here and my goal as usual is that at least one person will find whatever I’ve written useful.
You might have heard this story before but it is important that I tell it again here.
Two friends went to eat and one bought food too much than he can finish. The other could see him looking uncomfortable and he asked him what’s up? He responded, “this food is too much but I have to finish it since I paid for it already”. Startled, the friend said, “you don’t have to pay twice for your decision twice. Your first payment was cash when you pay for the food. The other payment is the uncomfortable feeling that you are allowing yourself to feel just because you think you must finish the food”. He concluded by saying “come on, you are smarter than that.”
I would hope the moral of the story is rushing through all your veins now. The fact that you’ve made a decision and invested your time, energy and money in it doesn’t mean you can’t stop it if you discover that it is not the best decision for you. Don’t let the illusion of sunk cost stop you from moving forward. The time you invested is gone already, you can’t have it back. The energy fizzled. And the money is probably irrecoverable. Move on my friend. The journey ahead can still accommodate your dream, aspirations and goals. Move on.
Invest! Invest!! Invest!!!
But what will you gain from a 200% return on investment of NGN10,000? By all means, you should invest and you know very well that I am also an advocate of the philosophy. But let me share something else about wealth accumulation that is not necessarily new.
A pearl of ancient wisdom said, “if the axe is dull and its edge unsharpened, more strength is needed, but skill will bring success.”
In relation to my example above, a dull axe would mean having NGN10,000 to invest. In which case you would need 10x returns for the investment to start making sense. A sharpened axe would mean having NGN10m to invest and even a 10% return on the investment would be huge enough to make a difference. The question to ask yourself is which model is easier to attain? Chasing 10x ROI or chasing a larger capital?
I would hope that like me and others who have ever really accumulated wealth, you prioritize the path of capital over ROI.
The path of capital would mean you do all things within your power to increase your earnings capacity. Do you earn NGN150K/month today? You are working on yourself so that in 5 years you are earning close to if not more than NGN1m/month. That’s actually the most sustainable to accumulate wealth; by increasing your earning capacity, by sharpening the edge of the axe.
I am terrible at networking and good at it all the same.
If you meet me in a place I am not familiar with, you can see how quiet I will be and would most likely leave the place without speaking with anyone. Yes. That’s it. Often, the question I can’t bring myself to answer is “what will I be discussing with a total stranger?” I have tried multiple times to transcend this tendency but all to no avail. Yet, I know it is imperative that I grow my network somehow.
Well, as I said, I am good at this at the same time. So the code for me became if I can at least get people to be interested in me that way, I can grow my network despite my failings.
To achieve that, I have done many things including writing this newsletter. From this newsletter alone I have met some of the most remarkable people in my life now. A good example is Yemi, who was my MC at my wedding ceremony. I met Yemi through this newsletter and we have gone to share some of my best memories together. Yemi isn't the only one. There are few more individuals like that. All of whom have added to me one way or the other.
Recently as well, I met a former Vice President at Facebook, a man with whom I have now become friends. I also exchanged emails with someone whom I’ve always admired recently. The email exchange marks the beginning of things to come. I have many more examples like that. How did I attract all these despite my failings?
Become a person of value. Become someone who has something to offer. Everyone wants to be associated with someone who has value and who has something to offer. But believe me, that’s not enough. You must also “have a thing”.
You see, it is not enough to be a person of value in the world that we live in. It is also important that you have a system of letting the world know that you are a person of value (that is having a thing). And when you do so, as Andrew Chen said, your network will grow over time. For me, my things are the knowledge that I share on different platforms (WhatsApp, LinkedIn, Twitter, Newsletter and all else). Well, that’s my method and hopefully, it helps you.
That’s all for now. See you when I see you next.