We’re All Allocators

If you asked 100 people their definition of investing, you would likely get at least 90 different answers. The explanation that’s always stuck with me is:

The art and science of allocating finite resources for optimal outcomes.

The line is captivating because it applies to almost everyone and everything. We don’t just invest money. We invest time, attention, and effort too.

I’ve realized throughout my career that this isn’t just an investment concept but also one worthy of attaching to all aspects of life. I consider myself an allocator of capital, but I also allocate time to becoming a better allocator through things like writing, research, and reading. It’s impossible to take big leaps in business without properly allocating time and saying no a lot.

At Energize, we don’t just allocate capital. We’ve built a model where we like to engage with our portfolio on a deeper level than most of our peers - another form of time allocation. It’s not just about creating new investments. It’s about helping new ones grow and protecting that value, too.

Beyond the professional, we’re all allocators in our personal lives, too. We decide where we spend our time to fulfill our whole selves. For me, that focus is on my kids, my relationship with my wife, my health, and personal growth. I’m admittedly a poor friend. I speak to a few close friends daily, but that group has dwindled. It’s a decision I’ve chosen to make at this point in my life; importantly, I’m okay with it.

That last line might read brutally cold, but it’s honest. Spending time with many friends has taken a backseat while I raise kids and grow my career. The ones who remain close are the most supportive and the ones I’d do anything for.

Taken as a whole, proper allocation equals the appropriate balance of often conflicting priorities.

In investing, it’s when do you hold versus when do you sell? When do you grow value versus when do you preserve it? When do you allocate to an existing investment versus a new one? And so on.

If you’re reading this, it’s probably often a balance of your professional and personal life - a choice we are lucky to have. There’s this uniquely American thing where if you’re not suffering, you’re not living or trying. But, I believe the more balanced (read, the better you allocate time) the more successful and fulfilled you will likely be.

To be clear, none of us are balanced all the time. How we define the timeframe is how we define balance. There are times where we must go all-in on our professional lives. In my world, that can be closing a deal, raising a fund, etc..

To highlight that former point, I recently heard Super Bowl-winning quarterback and one of my childhood heroes, Troy Aikman, on a podcast. He’s a super successful athlete, world-class broadcaster, and businessman. Recently, he‘s discovered how to become more balanced.

The host asked him point blank, could this person you’ve become win Super Bowls? Aikman said he didn’t think so, but the person who won Super Bowls was an unhappy jerk. He wanted to take that same work ethic and apply it to a more balanced life so that he could enjoy the life he’s built with his girls. To quote him, “If I can’t be happy, who the hell can be?” I think about this a lot now.

The opposite is also true; there are appropriate times to go all in on your personal life, and having a strong team can make a world of difference. It’s also highly productive to disconnect, reset, and think. Very few are wired to be on 24/7, and those people often end up unhappy in parts of their lives.

For each person, we must define our ideal return thresholds for the finite resources in our lives. We divide our time, attention, and effort so thinly across different devices and platforms that we forget to stay balanced over the long term. The Pareto Principle always applies - 20% of your time will create 80% of your outcomes and happiness - allocate accordingly.