Time and interest
Essential ingredients
To grow anything

One of December 2020’s FiKus highlighted the financial definition of Interest: compensation for the risk of lending money.

But what about non-financial forms of interest? What does it mean to be interested in something, or for something to capture one’s interest?

Time to whip out the Dictionary! According to Merriam-Webster, interest is:

a: a feeling that accompanies or causes special attention to something or someone: CONCERN

b: something or someone that arouses such attention

What grabs my attention in these definitions is how attention comes up twice. But interest isn’t just attention. It’s special attention. What makes it special?

Well, let’s look at un-special attention. What do our friends Merriam and Webster have to say about this one? According to the dictionary, attention is:

1a: the act or state of applying the mind to something

Our attention was on the game.

You should pay attention to what she says.

b: a condition of readiness for such attention involving especially a selective narrowing or focusing of consciousness and receptivity

Students, do I have your attention?

2: OBSERVATION, NOTICE

especially: consideration with a view to action

Attention has a component of thoughtfulness: the mind is focused on something and thinking about it. But we also have a condition of readiness. Readiness for what? “A view to action.” We give our attention to things that may require us to act. Attention and action are bedfellows.

What, then, might “special attention” be, as used in the dictionary definition of “interest.” Your guess is as good as mine. It may best to think of this in terms of an example.

If you haven’t seen it yet, and enjoy documentaries, book a date with yourself and watch “Jiro Dreams of Sushi.”

It is a biographical documentary about a sushi chef (Jiro Ono) in Tokyo who owns and operates a 10 seat restaurant in a subway station. Patrons must use the subway’s restrooms because the restaurant has none. In spite of its humble setting, Jiro’s shop was awarded three Michelin stars. That means, according to Michelin, that it would be worth traveling to Japan solely for the purpose of eating at Jiro’s restaurant. It’s that good.

The movie sparked such interest (there’s that word again) from the world’s sushi connoisseurs that it is now closed except for guests and VIPs (think world leaders). Since it is no longer technically open to the public, it has been removed from the Michelin restaurant guide.

In the movie, Jiro talks about being booted out of his home at age 7 and being told by his parents “you have no home here.” Over years, he worked in various capacities for sushi masters. He learned how to select the best fish from fish markets, what the best sushi rice is and how to cook it, even how best to lay out his restaurant to accommodate his left-handedness. Now in his 90s (remember he started at age 7), Jiro talks about dreaming of new preparations of fish. At no point has the journey into the sushi rabbit hole (eel hole?) reached a destination. The journey keeps going.

Does Jiro have a talent for making sushi? It would be a waste of time to argue otherwise.

But where did this talent come from? Was he fully formed at age 7, needing only a knife and a fishing rod to concoct preparations of fish that would attract international praise?

Something about sushi captured Jiro’s attention, and then over the ensuing decades of his life, he never stopped trying to perfect his skills. The more time he spent practicing and working, the more his skills grew. He even gets cooking practice in his sleep when he dreams of the dishes he will prepare in the future.

For me, this is the perfect example of the essential ingredients of growth: interest and time.

Interest in this case is a quality of dedicated, relentless attention that is self-fulfilling. If someone can hold their interest on a task for long enough, they will accumulate practice hours and experience. Their interest will inspire them to actively think about their practice and experience – what works or not and why. This transforms what might appear to be mindless repetition into meaningful progress. In some cases, as with Jiro, the journey into knowledge never stops igniting flames of curiosity that inspire a person to keep going ever onward.

The most essential ingredients then, for growth are interest – focused attention that inspires action – and enough time to gestate that interest into real skill.

Does this mean Beethoven wasn’t talented, or that Tom Brady wasn’t born to be the greatest quarterback of all time, or that Jimi Hendrix had no special musical ability in his head before he picked up a guitar? Yes, that’s exactly what it means.

These people had a remarkably resilient interest in something, which inspired them to put in hours of work that less interested people didn’t put in. At some point, they dedicated so many hours of focused attention to their interest that they unlocked realms of understanding and ability no one else had reached before. Which only made them more interested in what they were doing. What we call “talent” may really be the capacity to maintain interest in something for enough time to cultivate exceptional ability.

(I’d like to acknowledge that I am ignoring another essential ingredient: an environment that allows for the time required to develop and pursue an interest. It would be hard to pursue a lifetime interest in music if your home was under military assault. It would be challenging to play high school sports at a high level if you had to go straight from school to a job that helps support your family. There is an infinite set of things that have to go just right for progress to happen. Miracles abound. That will be a topic for another FiKu.)

And here we are once again, wondering what this all might possibly have to do with money.

I have yet to meet anyone who lacks a desire to grow their wealth. But desire is not interest.

Desire looks at what someone else has, or an imagined state, and wants it. There is a mindless, passionate aspect to desire that can metastasize into greed. Why? Because it fundamentally lacks purpose. It exists because a thought triggered a secretion of hormones in your brain.

There is no “why” behind desire. It is a reaction to external stimuli. Desire acquires things but doesn’t develop them. Desire is a child drawn to a shiny toy that makes a fun sound. Once the child has the toy, the desire must find a new toy in order to continue existing. Desire only has one word in its vocabulary: “more.”

Interest inquires. Interest asks “what is that thing? Is it a toy? What is a toy anyway? Why is it shiny? What is it made of? How do you make those things? Where does the sound come from? How does it make that sound?” Interest might take the toy apart and eventually ask “how can I make a better toy than this?”

When it comes to money, there is no single, better-than-everything-else way of accomplishing a financial goal. People may get to where they want to go using instruments that have existed for over a hundred years (if not millennia): business ownership, real estate, stocks, bonds, annuities, and life insurance.

But the instrument is not what ultimately does the work of wealth generation. The person in question must have interest in the instrument, and then allow that interest to develop and refine itself over time. As they get accustomed to using the instrument, they get better and more sophisticated at understanding how it works. The better they understand the instrument, the more likely it is to be used correctly, efficiently, and for the lasting benefit of the interested person.

Most real estate investors don’t start out owning a diversified portfolio of investment properties. They buy one property and learn the ropes, then they buy another that meets some standards they develop while working on property #1. Or, traumatized by something going wrong, they exit the asset class entirely and forever. If things go well, they may exchange one property for three more. They may start exploring commercial real estate, Delaware Statutory Trust property, private placements, REITs, and Opportunity Zones.

The same is true for stocks, bonds, and anything else that may either grow or protect your wealth.

The essential ingredients, as with Jiro, are interest and time.

This is the most compelling reason I can think of to work with a financial professional.

No matter how good you might be at TurboTax, you likely aren’t as interested in taxes as an experienced CPA. No matter how many books about estate planning you might read, you probably will never be as interested in estate law as an estate attorney. If you choose to work with a financial planner or advisor, they will hopefully have been interested in our financial system more deeply and for a longer time than you.

If your financial situation is complex, there may simply be no way to have accumulated the hours needed to have a thorough understanding of your risks and opportunities. A good professional will help you fill in knowledge gaps while demonstrating interest in areas where they are themselves still learning.

Two of the most important questions someone can ask a potential professional partner is “what do you find interesting about your work?” and “how long have you been doing this?” These questions may be far more illuminating than “what kind of return can you get me?”

If you are interested in learning more about your financial picture and how you can efficiently grow or maintain wealth, we would love to make time for an interesting conversation with you.