When you think about where to invest your money or time, what do you consider? Winning? Losing? Maybe reducing the chances of losing too much?
Many of us do not want to lose, a classic case of loss aversion. Yet, that is not the same as playing or choosing to win.
I’m not suggesting that we gamble to win. (I think of gambling as a guaranteed loss. Even when I go to Las Vegas, I never gamble!) Instead, I think about the present and future value of investments.
Consider the Present and Future Value of Investments, Not Costs
Many of us think about the costs in the present, not the value of money you might invest in your future. As a universal example, every single dollar you put away for retirement and do not touch offers a much more secure retirement. Might you be a gazillionaire? Probably not. But at least comfortable and not worried about retirement? Much more likely.
Putting money away regularly—even if it’s a little tricky at the time—offers much more value for the long term, your future. When you do, you bet on your future. You’re playing to win. Can everyone do that? Of course not. But if you can, the value of your money compounds over time.
Here’s another example from the world of independent publishing.
Draft2Digital, a distributor primarily for independent publishers, announced a fee increase a week or so ago. New accounts require $20 to open. If you’re already on the platform and you do not make $100 in yearly royalties, you, the publisher, pay D2D a fee of $12. (I do not make $100 a year in D2D royalties, because too few of my nonfiction readers go to the D2D stores.)
These numbers are relatively small in the scheme of things. I might say, “That’s a few fancy coffees over the course of a year.” Yet, what does that really mean for a low-earning author? It might feel like a lot of money in the moment.
But I don’t think about costs in the same way as other people do. Instead, I think about investments in the future because I play to win. That allows me to create experiments to both win and manage my loss aversion tendencies.
Experiments Allow for Winning and Managing Loss Aversion
While I am not a “typical” author, I use D2D as an experiment, a way to invest in my future.
If you have read any of my books, thank you! And you probably know me from my nonfiction. That’s because I’ve only published fiction in the form of short story collections.
I use D2D as a way of promoting my books and offering worldwide readers an opportunity to buy from a different store than the Big Stores. That means I do not make the $100 in yearly royalties. However, I consider D2D an experiment.
I do not know how many of my readers see my ebooks on D2D and then go elsewhere to buy my print or audiobooks. (There is no way to track that.) While I prefer to read everything electronically, many of my dear readers prefer print. That’s why I offer all formats for all books.
For me, a yearly fee of $12 is a low entry to keep my writing in front of potential readers. And then, when I (finally!) publish novels and novellas, these nice people worldwide might say, “Oh, she finally has fiction in my preferred store or library. I’ll pick up one of her books.”
That’s using an experiment to play the long game to win.
I can always choose to delist my books from D2D if I don’t write more fiction. Or if my sales go to zero. But I make about $20/year on D2D. That $20 will now cost me $12. Is that worth it for me? Right now, yes.
Again, I am not a typical D2D author, because no one knows me for my fiction. If people know me, they probably know me for my nonfiction. That means I will continue to experiment in my career.
Careers (& Life!) Require Experimentation for Winning and Managing Losses
Our careers and our lives require experimentation. Those experiments can increase our adaptability. That adaptability allows us to both win and manage losses.
Experiments are our friends because we can choose to learn from every hypothesis and every action. Even better, we can timebox experiments to manage our loss aversion.
We do not have to blindly assume we only have two choices: winning or managing our losses. Instead, we can choose where to invest as an experiment. That requires changing how we think about money and time. Not just thinking about costs, but how and where to invest, and for how long. Is this investment for a vacation in a couple of months or for a more comfortable retirement? We may well choose differently, depending on our timeframes.
Think about your career and life as offering many opportunities to consider where you want to play to win and when you want to manage your possible losses. So far, that’s worked for me. It might work for you, too.