Investment Lessons from Jeff Bezos

1. Drive down costs. For companies this means don’t overpay for input costs. If there are capable workers who are happy to do the job for $15/hr, don’t offer anything higher for this position. If nobody is willing to do it for less, consider investing in automation. For me this means I should cut my spending wherever I can, like on snacks. Find ways to save time such as combining my errands. Minimize redundancies like reducing the number of investment accounts I have. The more resource I save the faster my net worth will grow.
2. Foster innovation. Instead of thinking about what’s working right now, Jeff recommends thinking about what is likely to work in the future. I should consider how the economy might change. Ask myself which way is the job market moving? Which skills do I need to develop to stay relevant in tomorrow’s art industry? By getting good at adapting to change I will be able to stay ahead of the curve. Being laid off in February made me realize I did not adequately prepare for the future.
3. Choose long-term value over short-term results. Similar to a grandmaster chess player Jeff believes thinking 5 or 6 moves ahead is the best way to win in business. This is true for personal finance too. Some people didn’t understand why I invested money into stocks in 2009 instead of paying down my mortgage. I admit reducing my debt is a good feeling. But that’s only in the short term. Nearly 10 years later I’m very happy I chose to invest because the returns have outpaced the cost of borrowing money over this time period. In the short term, buying blue-chip dividend stocks today may not give me the high returns as a more exciting stock such as Spotify, which recently had its IPO. But 10 years from now my dividend stock will probably give me an overall higher return. Creating a Facebook post and waiting for people to like it will give me some level of satisfaction today, but will not help me in the long run. To build more wealth I only have to ask myself, “what can I do today that would make me the most money 10 years from now?”