Investing and Prospecting - Why they aren’t all that different

Investing and prospecting are two terms that aren’t often used in the same breath. But the reality is that there are quite a few similarities between the two.

NOTE: this is NOT investing advice.

What are we getting at here?

Investing to become a millionaire.

Using discipline, consistency, and a measured approach to reach your financial goals.

Compound interest is a beautiful thing. As Warren Buffet says, “"My wealth has come from a combination of living in America, some lucky genes, and compound interest." The concept of compound interest is that interest is added back to the principal sum so that interest is gained on that already-accumulated interest during the next compounding period.

In short, you have a principal — or initial investment — which earns interest. The interest earned within a given period is reinvested, subsequently adding to the total amount, which in its totality earns interest within the next period of time. If you’re looking for specific examples in an interactive way, give a look at this site which goes deep and allows you to play with some numbers to see the impact.

One of the core tenets of investing and compound interest is that the earlier you start, the better off you’ll be in achieving your goal. Here’s a good example:

Let’s say you want to be a millionaire.
Let’s also assume an annual rate of return of 8%.

If your target date to be a millionaire was 30 years out, you’d have to invest $8,100/year.
If your target date to be a millionaire was 20 years out, you’d have to invest $20,400/year.
If your target date to be a millionaire was 10 years out, you’d have to invest $66,000/year.

…and if you want to be a millionaire today, you’d have to inherit it. 😛

Long story short, the earlier you start, the better off you’ll be. By capitalizing on the increased amount of time + time intervals with which the interest will compound, you’re able to accomplish your goal with lower initial investment and recurring investments.

Compound Interest Formula

But how is prospecting similar?

We’re massive proponents of this notion that sales reps should manage their months in what we refer to as, "The 15th to the 15th”. What this means is that you set (artificial) timelines whereby the beginning of your month is the 15th and the end of your month is the 15th. What this does is it creates a mental model by which you are accelerating the way in which you need to perform certain activities. If you know your conversion metrics + execute flawlessly, working this way allows you to be at 100% of your quota by the middle of each month.

Spitting out results at the bottom of your funnel requires that you execute at the top of your funnel. There’s no path to closing deals without pipeline, and no pipeline without prospecting.

Simple, right? The similarity with investing is that you’ll be in infinitely better shape on doing this if you are able to get out in front of your prospecting activities. The earlier you build your pipeline, the more you’ll have at your disposal to close and the less you’ll have to deploy tricks like discounting in order to close deals — optionality is king here.

Need help?

Drop us a note to hello@reditus.work

We can help you understand your conversion metrics better in order to effectively have yourself (and your team) operate in this 15th to the 15th method of execution