69 – 10,000 Hours

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Episode Overview:

Ken touches on the well known proposition by Malcolm Gladwell: putting in 10,000 hours of work into a subject classifies you as an expert. When it comes to expertly managing your finances, your already on your way simply listening to this podcast. Every book you read and seminar you attend takes you closer. If you can’t invest time into learning finance, then call upon others to help. Apply this expertise criteria to them. Have they logged their 10,000 hours? Are there areas of expertise relevant to you?

Transcriptions are auto-generated, please excuse grammar/spelling!

Happy day to you. This is Ken Kaufman, and I am thrilled you’re here for episode number 69, “10,000 Hours.” Malcolm Gladwell wrote a book called “Outliers.” And in this book, he introduced the concept of the 10,000-hour rule. And the basic definition that he gave around it was that if you spend 10,000 hours practicing, and working on, and honing a skill or a craft, or, you know, working to get better and better at something, that within those 10,000 hours, you will become an expert or a master performer, or you will gain mastery over whatever it is that you’re working on. And he set this 10,000 hours as this number that’s this threshold that, once you cross over, you obtain mastery. Now, there are plenty of people who push back on this concept and say, “Well, it’s flawed because it’s not exactly 10,000 hours. You know, what if it takes somebody 11,000 hours or they’re quicker and they can get there faster and it takes them 8,000 or 9,000 hours?” So, it’s not an exact science and Malcolm Gladwell didn’t propose that it should be an exact science.

But few other people will knock it because they say it doesn’t focus on what level of quality the practice is that you’re getting with, whatever it is you’re trying to master. And we all know that some of us just aren’t born with the same God-given gifts and talents and abilities to, for example, be an amazingly talented musician or athlete or public speaker or, you know, you can go down the list, fill in the blanks however you want there in terms of, you know, people that you look up to because they have these abilities and talents that you don’t. I know what that means for me. I look up to a lot of people because I don’t really have a lot of, you know, phenomenal talents in terms of athletics or music or those sorts of things. I like those things and I love to participate in them, but the point here is… Sorry, I don’t mean to get off into my personal set of mediocrity challenges that I have, but the point is, is that even though some people will put a knock on this 10,000-hour rule, I believe in it. Directionally, I think it’s right. It’s flawed, it’s not perfect, but I think it’s right.

So, take a minute and think about this for a second. If you work in a job 40 hours a week, and you put in your, you know, regular time at the job, that means you’re working roughly 2,000 hours a year. Well, at the end of five years, that means that you would have put 10,000 hours in. And let’s assume that you started a job five years ago, and you didn’t know anything about that industry you were getting into. But after five years, if you pay attention, if you work hard and you do what you’re supposed to and try to grow and develop within your role in your organization and within that industry, after five years, you start to, kind of, know that industry really well. And you actually can start to become an expert. I’ll give you an example.

Four and a half years ago…and I’d been in and around the dentistry industry in multiple capacities, but never inside of an organization that was helping to provide services and to support dentists who were trying to grow their practices as part of a larger group. And when I came into this industry, it was fascinating to see that there are so many unique things and different ways of doing things and who the key vendors are and the suppliers are, and who the key professionals are that support that industry. It takes a while to get to know that. And, of course, there are conferences that are held on a regular basis, hence where experts get together and talk about things. And what happened was my first year, I just soaked in as much information as I could possibly get and then the next year, soaking in as much information as I could possibly get. And I actually ended up speaking at one of these conferences and then to the point where now, four and a half years later, and, of course, my wife would tell you that I work more than 40 hours a week. It’s more than 2,000 hours a year.

So I’m certain that I’m past the 10,000-hour mark. Especially just COVID alone, the number of hours worked in that 45 to 60-day window was pretty crazy. But all that being to say that, after spending this time of history, I’ve become, kind of, an expert. People will seek me out to ask for advice on things. And I’ve spoken at conferences and I don’t do this to point a finger at myself of how amazing I am or anything like that. I think it’s when you put the time in that you can all of a sudden gain this expertise or this mastery of this industry or this subject or this skill that you’re trying to grow in and develop. And so, when I take this, and this arbitrary number of 10,000, and we apply it to anything, I think it can help us understand why things get easier over a period of time if we continue to do the same things over and over and we get better at them, we get more skilled and we can drive better outcomes.

So, what does this have to do with growing our net worth and with personal finance? Well, first of all, if you’re listening to this podcast, most likely, you have some desire to learn and grow, and you can easily log the time of this episode or any others you listen to or any of the other great personal finance podcasts that are out there, all of this has been logged towards your 10,000 hours. And you can, obviously, read lots of content, go to seminars, join webinars, and listen in on those and books. There’s so much great content in this space, and there’s a lot of, you know, very opinionated people in the space as well. And the more you can hear and understand those things, the more you become an expert and the more you work on them and practice them. So, whether, you know, you have an account at Fidelity, or Vanguard, or Robinhood, or M1, or Betterment, or you go down the list of all the potential places where you can invest money, or maybe it’s your 401(k) account, the more you learn about that and you practice a craft of learning how you should invest, and what’s the most important to you and what values and principles should you apply to your investment strategy, the more experience you get with that and reading and learning as you go. Well, it’s gonna make you better and you’re gonna start to become an expert and gain mastery over some of these principles and concepts like alpha, and beta, and coefficient ratios, and so many other things, you know, in the investment industry.

You may or may not wanna know. And if you don’t wanna know them, just accept the fact that, “Hey, I’m not able to invest the time.” And that’s when you know, “Hey, I should hire a professional. I should hire an expert to do this.” But now, you have these interesting criteria. If you’re hiring an expert, you need to be looking at them and saying, “Have they logged their 10,000 hours? And, if they have, have they been paying attention and has it been working with people like me? Has it been helping people like me solve problems like I have, and I’m not the first case that they’ve ever seen like me?” And so, not just do we apply to ourselves, but the professionals that we’re willing to hire and pay our hard-earned money to, we want to hold them to this concept of, have they developed mastery, and what evidences can they show? Yeah, 10,000 hours, that’s interesting. That may or may not be enough, there’s lots of reasons why it may not, but they need to be able to show you why they’ve achieved mastery and how they’ve achieved it, and that it is in an area that’s relevant to what you’re doing.

For example, if somebody has sold life insurance for their entire life and they come to you and say, “Hey, I want to do financial planning for you.” And you say, “Oh, well, how much experience do you have?” And they say, “Well, you look, I’ve been selling life insurance.” Well, if you’re the first person that they’re gonna do a full financial plan for and help get organized around every element of a financial plan, I realize that insurance is part of financial planning, but it’s not the whole thing. And so, making sure that you find somebody who really has invested and paid the price to become an expert and gain mastery in exactly what it is you’re looking for and what you wanna do and what you wanna accomplish.

So, I think what it comes down to is this. I really have two takeaway concepts. The first one is, and this is backing up more to that 30,000-foot level. If you love it, if you are passionate about it, and if it’s helping you grow personally, and develop personally, and it’s challenging you in ways that you wanna be challenged and that you’re proud of being challenged and overcoming, then stick with whatever it is in your life. If it’s your job, if it’s what you’re doing with your family, if it’s hobbies, whatever it is, stick with it. Put in the time and the effort and then mastery will start to come. Now, you may not be the best at it, but you’re going to become so much better. And then, when you take that concept and, you know, you’re applying that to your work and your skills and all those things, and then when you look at personal finance, figure out where you wanna draw the line. Do you want to become that expert, or would you rather pay to have somebody be that expert for you? And that could be in so many different areas because you have the overall financial planning, but then you have insurance, you have investments, you have taxes, you have a state planning, and there are even more derivations or derivatives off of each of those master topics that I just said. For example, in insurance, there’s a big difference between somebody who knows and understands the in-depth of disability insurance, as opposed to somebody who is exclusively an expert in life insurance, or property and casualty insurance, you know, like automobile insurance, or homeowners insurance, or general liability insurance, or commercial insurance for businesses.

So, all of this to say, number one, if it’s your thing and you love it and you love how it pushes you, and it’s giving you the growth and development that you want, stick to it and you’ll get to that mastery level, somewhere around the 10,000-hour mark, plus or minus, I don’t know, 5,000 hours, 10,000 hours, whatever that is. But you will get great rewards from doing it. And then look around in your personal financial life and for the things that you don’t have the interest, or it’s not that exciting, or it’s not the type of personal growth and development you want. Then that means it’s probably smart for you to think about hiring a professional to help you in those areas when it comes time. Hope this has been helpful. Many, many thanks to you for joining today. This is a wrap for episode 69. Happy day.

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About the Podcast

Join Chief Financial Officer Ken Kaufman as he helps you track and hack your net worth. For those seeking financial independence, your net worth is one of the most significant measurements of success. Using his two decades of financial experience, Ken Kaufman helps you overcome your financial obstacles and look onward towards a better, brighter financial future.

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