As humans, we tend to value a lot of different qualities and abilities in ourselves. But when it comes to appreciating the value of knowledge, this is one asset we tend to underestimate.
Consider this: Would you say you’re an “expert” at something?
Don’t be too humble. According to the author Malcolm Gladwell, author of the incredible book “Outliers”, it takes at least 10,000 hours to become a master at something. While that might sound like a crazy amount of time to invest into something, chances are that you may have already put that much time into your favorite hobby or interest.
Perhaps you have knowledge or skills that are the by-product of your day job. And even if its not the most interesting topic, if someone were to ask you a question about your particular specialty, you’d probably be able to impress them with the volume of information you have readily available at the tip of your tongue.
Whether you realize it or not, the value of knowledge is something which can be leveraged. When applied in a way that helps others, the things we “know” could be exchanged for a handsome fee, used to advance our careers, and ultimately lead to actions that will bring us closer to achieving financial freedom.
To take this asset for granted would be just as silly as applying for a job and forgetting to mention that you have a 4-year college degree. The knowledge you have isn’t something you’re born with. It’s acquired over time. It’s earned. You’ve put effort towards gaining it. And all of that should mean something.
So now the only question is: How can you turn that effort into something positive financially? Something tangible that can change your life?
Don’t believe me that such a thing is real? One of my favorite lessons in the value of knowledge is “The Story of the Repairman”. Here’s how it goes:
The Story of the Repairman
A large factory is producing hundreds of thousands of dollars of goods.
One day, a critical machine in the line goes down. The boss is frantic! “We can’t stop production! We’ve got orders to fill! Call a repairman at once!”
So the factory calls a local repairman to fix the machine. The repairman says takes a look at the situation and tells them it will cost $5,000 to fix the machine. In haste, the factory boss agrees.
The repairman then opens up his tool-bag and starts going over the machine. He spends a few minutes looking underneath it and checking the gauges. Then he takes out his wrench and begins to tap on the machine. After about 15 minutes of tapping in various spots, the machine starts to work again. The repairman, acknowledging a job well done, packs up his wrench and is off.
A week later the invoice for $5,000 shows up at the factory. It goes to the boss’s desk for approval, and he hesitates. “The man was only here for 15 minutes! How can he possibly think he can charge us this much money?”
So the factory boss calls the repairman and asks him if he could be so kind as to itemize the invoice. About an hour, the repairman emails over an itemized copy of the invoice. It reads as follows:
- Line Item 1 – $100 – One hour of labor
- Line Item 2 – $4,900 – Knowing where to tap on the machine with the wrench.
Although he is reluctant, the factory boss remembers that he was given the price up-front. And when he thinks about how much money they would lost if the factory had been shut down all day, it would have been substantially more by comparison. So in realizing the value that the repairman provided, he approves the invoice for payment.
Leveraging the Value of Knowledge
So what do we learn from this? What is the the moral of the story?
(… No, it’s not that you should try to rip-off your customers and get as much money out them as possible …)
This light-hearted story is meant to teach us one thing: Value is in the eye of the beholder. What you know or find to be common-knowledge might be complex to others. Knowledge is relative; it’s a matter of perception, and the more you seem to have of what people want (or need), the better your opportunities for financial gain will be.
The story of the repairman happens all the time. Sometimes it happens “literally” with real repairmen. Think about the last time your refrigerator or washing machine wasn’t working quite right, and you needed some help. Like the factory boss, your options are to buy a whole new appliance (a thousand dollars or more) or to pay the repairman whatever rate he quotes you (usually a few hundred dollars). Which would you rather pay?
A “repairman” could also be someone with the knowledge to fix … just about anything! Think about how many people there are in the world who are able to call themselves (or be known by others as) experts or gurus. (Also think about how they are able to command compensation beyond our normal realm of comprehension!)
Maybe you know someone who has hired personal trainer, financial coach, career coach, or even life coach. In all of these areas, the expert needs to have intricate knowledge of the field and be able to apply it in a practical way that will best help their client.
Maybe you know of a company or employer who paid outside consultants several tens (maybe hundreds) of thousands of dollars to give them advice about a particular subject.
How can these experts often demand fees and rates that seem substantially higher than what you or I would earn per hour from our regular job? Because the value they are perceived to provide transcends the traditional dollar-per-hour work model. Often times, they aren’t even being billed for the number of hours they’re working. Instead, they’re being paid a handsome flat fee or commission.
Why are they able to do this? Because fundamentally they have something you need. They have knowledge that could help you and your company to succeed and turn results that are several multiples higher than the fee they are asking to charge. They create value with their knowledge, and financially they know that they can leverage it just the same as any other tangible asset.
What Do You Know That Would Be Worth Something to Someone Else?
Do you have any skills or abilities where you could do the same thing? Do you know anything that you believe someone would be willing to pay you to find out more about? For example, could you:
- Write freelance articles, blog posts, or even author an ebook about a particular topic?
- Coach someone to be more successful with their job, fitness goals, personal finance, musical instrument, etc.?
- Act as a consultant for modern advertising through social media?
You might doubt yourself. But I’m sure that if you really dove into one of your special interests or hobbies, you might find out that you have a lot more to offer to someone than you think!
Invest In Your Knowledge
Do you lack confidence in your mastery of a subject? Don’t feel like you have the right credibility? Want to sharpen your knowledge all around?
If any of these doubts sound familiar to you to, then perhaps you need to invest more in your own knowledge. For example, you might it would be beneficial to:
- Go back to college to get your bachelor’s or even masters degree.
- Get certified in a particular field (such as becoming Certified Financial Planner).
- Go to a seminar to learn more about a possible business venture (i.e. real estate, house flipping).
- Take an online class to learn how to better market your digital skills. Bloggers do this all the time to find out more about they can attract more readers and promote their content better.
- Purchase one-on-one fitness training to reach your health goals.
There are so many more we could list!
Value Doesn’t Always Have to Mean “Money”
Remember: Sometimes “getting paid” for what you know ISN’T always the ultimate goal. Often the knowledge we gain could be leveraged to make significant improvements in our lives – beyond the value of money.
Think about a person who invests their time and energy into eating healthier, losing weight, and exercising. Given the scenarios I gave above, maybe this person could consider becoming a personal trainer or even a life coach.
But think about the changes this person could make in their own life (or the lives of their family and friends). Learning what healthy habits to take on and what exercises to engage in will undoubtedly add years and years of quality to this person (not to mention minimize your medical issues).
When I think about myself and all the knowledge I’ve acquired throughout the years about personal finance, its the same thing. Yes, I make money with my writing. Yes, I could likely even be paid for helping others with their money issues. But what’s the most incredible to me is how much this knowledge has improved the financial situation in my own household. Thanks to these efforts, we’re able to buy pretty much whatever we want when we want. We’ve traveled to exotic locations most people only see in magazines. And most importantly, we’ll likely retire early about 20 years before most of my peers. That’s power. That’s truly the value of knowledge, and I’m happy to be living it.
Readers – How do you leverage the value of knowledge to your benefit? What kind of an impact or improvement has it made on your finances, career, or personal life?
Photo credits: Pexels, Unsplash