Which would you prefer: a great salary, or a great place to work?

Two family members have been rushed to A&E in the last week or so, for unrelated reasons.  While we waited to be seen I was interested to watch the people working in this environment.  In both cases we eventually got fantastic care from the doctors and other staff.  But, it was depressing to see these people have to start their consultation with an apology for taking so long and leaving us in uncomfortable circumstances in the meantime.

I think it’s a natural reaction, when you have a reason to use the hospitals, to think that these people should be paid much more than they are currently for the important job they do.  It’s also a bit concerning to hear the variety of international accents amongst the staff, and realise how difficult it must be to find these people and how dependant we are on immigrants coming here to work in our health system. (I imagine patients in Sydney and London think all of the Kiwi accents working in the hospitals there are odd too?)

But, would more pay actually solve a problem?  Or, is the real issue the crappy processes and facilities that they are forced to work with? (I’m sure it was Windows 2000 on the desktops!)

I doubt that many, if any, of these people choose their profession because of the pay, or are especially motivated at all by cash.  Paying them more may help in the short term, but as long as the system they have to work in is so flawed it will be difficult to create a job they really love.

I’m sure this will not be an easy thing to fix in our hospitals.

But, if you a running a start-up it is an opportunity, because in the early days it is generally pretty easy to create an exciting place for motivated people to work.  When there are not many people in the team and there is lots of work to do, there are always lots of opportunities.  And, without a corporate facilities management department and layers of management keeping track of the work you do, you can pretty much optimise your own work space and work time to suit.  This is why a small team can nearly always outrun a much larger competitor – they are not responsible to anybody else apart from themselves.

The flip side is you’re unlikely to get a big salary working for a start-up.  Or, at least you shouldn’t, until the company has created its own momentum!

If you have a great work environment and one of your team says “I could earn [current salary x some number > 1] at [large corporate or government department]” the correct response is: go for it then, and good luck to you.  If they don’t put a value on all of the good things about working in a start-up then you probably don’t want them around anyway.

Likewise, I always smile when I hear a CEO or some media celebrity defending their unnecessarily large salary by saying that they need to be paid an internationally competitive amount.  I think: really, your job is so crap that the only thing keeping you there is the knowledge that you couldn’t earn more overseas?  That’s sad!

Maybe you’re lucky and have a great job that also pays well.  But, most will need to choose one or the other.  I recommend choosing a place you love to work.

And if you’re trying to attract great people to come and work with you, remember there are more things you can offer than a big pay cheque.

Why do you love your job?

Here’s a simple thing which, evidence would suggest, is not obvious to many people:

You can’t invest in nothing.

Especially when there is a lot of volatility and uncertainty it’s tempting to think that you can opt-out and choose not to choose at all.  But, whether you like it or not, everything you have is invested in something.

Think about what you do with your money…

If you prefer cash under the mattress, you are investing in a specific currency and making a bet against inflation.  Ideally you’d choose a currency that reflects the things you might want to buy with that money in the future – if those things are imported or priced to compete with imports, then that’s unlikely to be the currency you use everyday.

If you put your money in the bank or in a term deposit you are backing the institution which holds the cash for you.  Of course, they almost certainly don’t actually “hold” it as cash – so, always ask yourself what they are doing with your money in order to be able to pay you interest.  The recent collapse of dodgy finance companies has shown that even though this option might seem safe, the risk you’re taking is not zero.

If you buy stocks on the sharemarket your investment is a bit more obvious.  Perhaps the company will do well and the share price will go up?  Or, perhaps the company will do well, but not as well as other people were expecting when you bought the stock, so the share price will go down? (remember, a share price is just a measurement of current market expectations).  Maybe you think it would be safer to invest in an index fund, but keep in mind that an index is just a collection of companies and this same logic applies to each of them and therefore to all of them together.

If you buy a house then you’re investing in the local property market.  If you have a mortgage you are borrowing (and paying interest on that loan) in order to be able to invest more than you would otherwise be able to afford.  It’s interesting how willing banks are to lend and people are to borrow to invest in property when they would be very unlikely to do that for any of the other investment options listed here.  But, I’m not going to criticise anybody for this choice – despite being a vocal advocate of renting as the sane mathematical choice, this was the first thing I did when I had the opportunity.  Actually, this is more of an issue for those who own multiple properties, or see their one house as a savings scheme rather than just a place to live (you can’t eat your house).  Either way, when you’re calculating the returns on your investment make sure you account for the full cost of owning the property over time – including insurance, rates, maintenance and the opportunity cost of the capital.

If you have your own small business then you’re probably investing in several different ways.  Perhaps you put up the capital to get the business off the ground?  Perhaps you pay yourself less than you could earn elsewhere.  These are just slightly longer term investments, in the hope that the business will grow and pay you back eventually.  When you look at it this way, I wonder how many small businesses perform better than the equivalent amount of cash in the bank, when all things are considered?

Maybe you prefer to spend than to save.  At least by investing in expensive toys today you will have less of a problem deciding what to invest in down the track!

Even if you give your money away, you’re effectively making an investment in a charity or non-profit to do something useful with that money.  Or not, as the case may be. (see: Real Good Not Feel Good)

Perhaps you can’t decide, so spread your bets, and do a little bit of each of these things?

Still every dollar you have is invested in something.

Of course, money is not the only scarce resource you have – the same thing is true of your time.

What are you investing your time and money in at the moment?