Part 2 – Reinvesting Dividends and Seeking Mastery
Is “Mastery” the compound benefit of reinvesting dividends?
In his amazingly concise paperback “Mastery: the keys to success and long-term fulfillment” (http://www.amazon.com/Mastery-Keys-Success-Long-Term-Fulfillment/dp/0452267560) George Leonard succinctly describes the process and steps for gaining mastery. He illustrates the mastery process with this simple line drawing:
The drawing reflects efforts followed by modest growth and a small decline, more effort followed by modest growth and small decline… lather, rinse, repeat. The effort is shown as a serious of plateaus.
In my previous post, I mentioned my friend Justin and the progress and joy he felt with being persistent in his effort to ride a bike to better fitness. Here is how he described his process:
- Pick a stretch goal
- Train towards stretch goal
- During/after training/completion of goal find unexpected benefits, and new motivation
- Pick new stretch goal
Persistence, loyalty and patience also pay essential dividends when we find ourselves striving towards achieving Mastery in something. The plateaus can be long, boring and frustrating. But it’s only after enduring and working through the plateaus that we find ourselves suddenly – and maybe surprisingly – stepping up to a new level of performance.
That’s the dividend.
If we quit an effort BEFORE the dividend, we’ve wasted our investment.
If we quit AFTER being paid the dividend, we just paid ourselves back.
But if we reinvest the dividend and continue the process…. THAT’S when we start building real wealth.
I have been experimenting with Mastery efforts, seeking to put the Dividend principle to work in different areas of my life.
Three years ago I started learning to play the guitar on my own. It began with an idea for doing something romantic for my wife Brenda as a Christmas gift. We’ve been married since 1980, and I’ve given a wide array of generally boring and easily forgotten Christmas gifts. I thought “this year I want to do something more meaningful. How about I learn to play guitar, write her a love song, and sing it for her at Christmas when our children, grandchildren and parents are gathered around?”
I went to Costco and bought a Fender FA-100 acoustic guitar for about $180, including a tuner, extra strings and a stand. If you are as ignorant about guitars as me, you should know that this is not a lot of money, and it is not a lot of guitar.
Then I looked up some Youtube tutorials, bought an online “teach yourself guitar” course and got some pointers from my daughter. And started writing, practicing and learning.
I kept the guitar at my office and worked at it secretly from about July to December. Brenda had no idea.
This is my second guitar, a Breedlove, which I now keep at the office.
A Nice Payoff
At our family Christmas gathering I brought out a big box and made a little speech about how much I love Brenda and wanted to do something special and had invested about 5 months writing a song for her and learning to play the guitar so I could give her the song for Christmas. The look on her face when I pulled out the guitar was priceless. The tears started welling up in her eyes as my daughter Bethany and I played her song. It didn’t take long before tears were all around the room.
Although my guitar playing was terrible and my singing was worse, the payoff for holding onto the investment was huge. I started the effort because of love, with the objective of giving something more meaningful than what I normally invest in for Christmas gifts. The five months invested in learning, practicing and writing paid me back when the gift was given.
I knew that if I had given up on the objective, the investment would have been wasted.
Now here is the point: I would have been fully compensated just for maintaining the investment until Christmas. BUT – I also realized that if I reinvested the dividend and continued learning and playing, I could grow meaningful wealth.
Every day I pick up the guitar and try to learn a little more. I’ve made a a point of trying to practice or play something every day. I’ve experimented with composing. My guitar playing has improved a lot. I’m not “good”. But my goal is not to be Good; it’s to be Better.
My personal dividend now is Joy.
And, I am still a terrible singer.
Here is a short Youtube video that traces my experience.
My experience with the guitar feels a lot like what George Leonard draws in his Mastery Curve: incremental growth between periods of plateaus.
And you know, that is what a lot of financial investing looks and feels like, too.
What does Compound Growth look like for you?