What is an Investment?

My wife was saying that giving my daughter a head bath did not have enough RoI because she was going swimming anyways.

And sure enough, my daughter who is the consummate questioner asked “What is RoI?”

Well, first I had to explain what an investment was to a 4 year old.

What is an investment?

Essentially, It’s something you do today so you can get something nicer later. Often its something you do not really want to do. But then I realised, sometimes the today’s stuff can actually be quite nice. So it’s not quite the same as delayed gratification.

We spoke about how she likes some classes (eg. chinese) but doesn’t like other classes (eg. Ballet (I have no idea how that happened, she asked to go to ballet)). Some classes swimming are a mixed bag, she is scared of them but usually has fun during the class.

All of them are investments, sometimes they are fun, sometimes they are not.

Some like giving her a head bath, are chore-y investments - habits if you will (return being that the hair is less messy later). Infact, building good habits is an excellent investment!

All that said, for an investment of this kind to pay off, you do need some level of difficulty, which can inherently be uncomfortable (which is the “risk” part maybe?). When I am in the zone and learning and discovering something, even though it’s difficult and draining, it is actually a lot of fun.

So for the best investments, you dont need to delay your gratification at all, just point it the right way.