Open Doors are Affordable

Count Every Cost.

"An elephant for a quarter is a bargain, but only if you have a quarter and only if you need an elephant."

David O. Selznick

We've been talking about how there are opportunities all around us, but how they must meet five criteria to qualify as open doors. They must be:

·      Immediate

·      Affordable

·      Aligned

·      Exciting

·      Sustainable

Last week, we talked about how an opportunity must be immediately available to you to qualify as an open door. If the opportunity is in the past, in the future, belongs to someone else, or requires things you don't have in the moment then it is not an open door. This doesn't mean it never will be, but it's not right now and you should not spend time and energy focused on it.

Today, we are going to talk about how an opportunity must be affordable for it to be an open door.

Affordability

The idea of affordability is a strange thing, especially in America. I assume it might be the same other places, but this is where I live so it's what I know about, and I find the conversation around it is often difficult.

For many people, affordability means whether they have enough money for something. They may not think about the long-term impacts, and their idea of what's affordable is also based on an idealization of how things will turn out. A $500-a-month country club membership is not a problem at all until you lose your job.

There's also a strange element of entitlement in affordability. I often hear people justify the cost of something by how hard they have worked, how badly they've always wanted it, or by the fact that other people have it. These are irrelevant factors when we assess affordability and lead to a dangerous way of making decisions.

Open Doors and Affordability

When I say that open door must be affordable, I mean it in a very broad sense. Something must not only be financially affordable, it must also be affordable mentally, physically, and emotionally for it to be an open door. If an opportunity is going to break the bank in any of these ways, you need to default to letting it go. It was not yours in the first place.

Financial Affordability

The financial side of affordability is simple if we are willing to be honest with ourselves and keep our emotions in check. This is tough in a system where literally everything is designed to manipulate you into over-extending yourself.

Here are some simple guidelines:

If something is going to keep you from meeting other financial obligations, it is not affordable.

If something is going to put you in a bind where you are struggling, it is not affordable.

If a minor mishap of some kind in your life would cause you to go off the road because of something, it is not affordable.

Here's an example:

Let’s say someone is thinking about buying a new truck. They have a great credit score, and there are plenty of zero-down, 84-month payment plans out there. They don't drive very much, so they can afford to put gas in it, and they could argue that they would use it a lot doing little projects and being able to haul things around.

Here's the thing though:

A little bit of research tells me that their monthly payment would be somewhere around $900 a month and their insurance would increase approximately $150.00 a month. That's $1050 a month that they don't have anymore. That has to come from somewhere.

Let's say that they have the cash on hand to swing the payment but at the expense of their retirement and emergency fund. This is not affordable for them in the way we are talking about. They are leveraging themselves to the point where something like losing their job or missing work for a week due to illness would crush them. Don’t even get me started on the long-term implications.

If I'm honest, the fact that they didn't put any money down and had to take a seven-year note on something that depreciates rapidly tells me that this was never affordable in the first place as well.

Further Costs

Beyond this is the opportunity cost that leveraging themselves in this way incurs.

Putting themselves in a position where they have no extra money on a month-to-month basis for the next seven years means numerous opportunities will pass them by. Some of them might just be frustrating, like vacations and nights out with their spouse or family, but some are more dire. I often see where being leveraged too much allows people's bills to build up on them and creates a snowball that crushes them.

There are also the more subtle factors. Money stress is global stress in a capitalist economy because it determines your health, safety, leisure time, and opportunities (that word just keeps coming up).

Financial trouble also chips away at your health and your marriage over time. Not having leisure time to spend with other people, especially your family, wears on you and can lead to bigger and more significant problems.

I know this might sound extreme, but I've seen it happen over and over again. It’s not meant to be judgmental either. I am not wealthy, and I must be mindful about how and where I spend money. I don't mind this though - there is a lot of good in having to be intentional about what you do and do not buy.

An unnecessary financial expense was the most straightforward example, but there are many ways that people mistake a closed door for an affordable opportunity. I have done it many times in my life.

Mental and Emotional Affordability

When I first started at Texas Tech I was caught up in the rush of doing something different with my life. I had a professor who saw something in me and invested in me, and this felt really good. I was in a great mood, so I committed to being in a student service organization and even the president of the Honor Society for my department.

The thing I failed to factor into the equation is the fact that I don't really like being around people all the time and I will always default staying home and doing my own thing. I overcommitted and burned out quickly, leaving other people hanging. When we jump on opportunities that are not actually affordable for us, we often end up inconveniencing other people.

I learned my lesson about overcommitting to projects years ago.

I have a hard time saying no to opportunities that other people bring to me. I do have a lot of offers and opportunities these days, but this has not always been the norm for me.

Over the course of my life, I was generally someone people recognized they could not trust to capitalize or follow through on things, so they did not offer them very often. There's still a person deep down inside of me who struggles to let any opportunity pass because he feels like he may not get another one.

I also have people-pleasing tendencies that I have to pay attention to. It's hard for me to tell people no because there are voices in my head that tell me they won't like me anymore or that I have disappointed them. I'm aware of these things and generally do not allow them to run the show, but they are still there. When I'm feeling down or I'm tired, they can be especially loud.

As with so many other things we've talked about today, though, these are bad ways to make decisions. In the past, I overcommitted myself to too many things and ended up doing all of them poorly. The saddest part is that they were often projects and partnerships I did not actually want, so I was running myself ragged for things that I did not really like or enjoy.

This wore me down mentally it made me very unhappy. In the same way that we have to have the money to afford an opportunity, we also have to have enough in our mental bank account to cover the cost of the things we pursue.

Assessing Affordability

There are a few ways to tell if an opportunity is affordable for you.

First and foremost, do the math to see if the opportunity is financially feasible. Don't forget, if it's going to take you away from work, it has a cost. It's also worthwhile to factor in the time it will take because you could use that time to do other things. We often miss calculating the cost of what else we might be doing if we said no to something.

When you are looking at the time cost, try to project ahead three months and six months ahead and see how you are going to feel about it then. A lot of things are a lot of fun at the beginning, but they start to wear on us over time. Failing to factor this in will lead to burnout and abandonment of whatever it is you signed up for.

Consider the mental and emotional toll something will take on you. Don't just do this with your best days in mind. Something must be affordable on our worst days to be an open door.

It is 5:30 AM right now, and I have been up working on this post since 3:45 AM. I usually stay a day or two ahead of my writing, but that hasn't been possible this past week. It's easy to be enthusiastic when starting something but it's important to understand that there are going to be times when you have to sacrifice hobbies and even sleep to do the things you committed to do. Don't forget to factor this in, and do not rely on passion and motivation (I did an entire podcast episode about this).

Journal Prompts

Here are some questions you can ask when an opportunity arises to see if it is truly an open door for you.

·      What is my current financial situation, and how does this opportunity fit into it? Can I pursue this without compromising my financial stability?

·      How will taking on this opportunity affect my financial future? Will it lead to growth or strain?

·      Do I have the time and energy to fully commit to this opportunity? What might I need to sacrifice to make this work? Am I willing to sacrifice it?

·      How will this opportunity impact my current responsibilities and priorities? Is it worth the trade-off?

·      What resources (time, money, skills, support) will I need to make this opportunity successful? Do I have them, or can I acquire them without overextending myself?

·      Am I emotionally and psychologically prepared to take on this opportunity? How will it impact my well-being?

·      What might I have to give up by pursuing this opportunity? Is the potential gain worth the loss?

·      What is the best and worst-case scenario for this opportunity? Can I afford to handle either outcome?

Thank you for reading! Next week, we will look at how an opportunity has to be aligned to be an open door.

Take care,

James