Disclosure: Nothing in this blog should be taken as investment advice. Do your own research. This blog is supported by advertising and affiliate links... Links to products and/or services on this blog may include links to affiliate programs that provide commissions to this blog. All of the content in this blog is 100% my own opinion.
In real estate appraisal, the concept of “highest and best use” contemplates the factors that result in the real estate’s highest value. In order to arrive at this ideal, four factors are considered:
- Legal permissibility
- Physical possibility
- Financial feasibility
- Maximum productivity
To create a plan for our own personal “highest and best use” we can use a similar approach.
Is what we’re working on legal? (Let’s hope).
Is it physically possible? Most things these days are physically possible. We don’t have to do much manual labor anymore… And will be doing even less as robots and artificial intelligence start to spread.
Is it financially feasible? We have access to more for less than any generation prior. The phones in our pockets have more computing power than the first space shuttle. We can talk with anyone, almost anywhere, almost for free. At least in the short term, technology is free.
Is it maximally productive? Today one person can do the work of ten by letting machines and software do the work.
Real estate can have a highest and best use that is legally nonconforming. This means that the property is at its highest and best use, even though it no longer complies with existing zoning laws.
It’s “grandfathered in”.
Humans are the opposite.
We are sometimes “grandfathered in” when we should choose to tear it all down instead.
Just like in real estate, humans have the toughest time achieving their highest and best use when they are legally nonconforming.
They’re following a set of rules imposed on them by outsiders.
You have the abilities and potential to achieve your highest and best use, but you may fail to do so because of poor personal decisions… Restrictions you set upon yourself to comply with outdated rules.
When really, to achieve your highest and best use, you might be better off to tear it all down and start over.