Personal R&D
Many successful companies run expansive research and development departments, allowing them to enhance their capabilities and discover and exploit the new opportunities this speculative research often brings.
Josh Kaufman suggests that we create our own personal R&D budgets–akin to those of corporations–for our personal development:
What would it look like if you set aside 10–20% of your monthly income as a personal R&D budget? […] That money can then be used – guilt-free – in any way related to improving your skills and capabilities: purchasing books, taking courses, acquiring equipment, or attending conferences.
Personal finance gurus might disagree with me here, but I think having a robust personal R&D budget is more important than maximizing savings. I’m all for having a well-funded emergency account and saving a minimum of 10–20% of what you earn each month, but savings can only get you so far. Investments in improving your personal skills and capabilities can simultaneously enrich your life and open doors to additional income sources. New skills create new opportunities, and new opportunities often translate into more income. Your ability to save is limited; your ability to earn is not.
5 Comments
That article was mainly padding. It’s the kind of thing I’d usually skim and ignore. But as it made it onto LG I gave it a more in-depth read.
It seems his key message is “build a diverse skill-set and money will follow” and “spend 10–20% of your salary on doing this”. This might be good advice, but I need more convincing before I take action.
I felt he could have backed it up with case studies, success stories, research etc. Has this really worked for anyone? Did he pluck 10–20% out of the air? Should I build skills in things I don’t enjoy just to make money? Should the emphasis be on trying lots of new things or concentrating on a specific area? Should I try and obtain expensive accreditations? How do I know when I’ve found something I can make money off? How do I make money off it?
I thought he could have spent more time answering these questions rather than giving basic frugality advice and comparing individuals to big companies that have R&D budgets.
I agree with you, Andy.
I felt the entire How to Fund Your Personal R&D Budget section was misplaced and unnecessary: it was too ‘personal finance’ and not enough ‘personal MBA/development’.
However I love the concept of a personal R&D budget and of managing your personal development through “speculative research”.
I felt that the idea was more “spend x% of your salary on new experiences that may or may not lead to a more diverse skill-set as a way to diversify and/or increase your income”. A subtle difference, but that’s what I got from it.*
But yes: some case studies, etc. would have been nice. A follow-up for Josh, maybe?
*This is similar to how I discovered Toastmasters. I first heard about it almost 4 years ago, dismissing it at the time, only giving it further thought once I discussed it in depth with you maybe a year later. Now it’s one of the most worthwhile things I’ve done.
Of course you’re right. I’m not sure why I felt the need to lay into that article like that. Must be having a bad day.
Not at all: I think you make a valid point.
It was the comments in the third paragraph of your original comment that made me consider the concept a bit deeper. Especially the following questions:
A critical eye is more than welcome (and encouraged) as without it we sometimes forget to consider ideas to their required depths (or at least I do!).
The article is interesting, but it fails to mention that R+D departments are only successful if they can apply their new developments and discoveries if they can apply them.
A good realistic R+D is to figure out new ways to improve on certain tasks at work or skills. You should focus on specific skills or goals… rather than learn a diverse set.
Its like Goodyear tires are trying to do some R+D for a better Alarm Clock? MP3 Player? .…