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When you think about investing, what do you think about? Do you think only of saving for retirement, a specific event, or emergencies?
This is what most people think of when they think about investing, but all too often, you forget to invest in yourself. This could be the largest mistake anyone makes - investing in yourself is one of the best investments you could make in your lifetime.
It sounds selfish or even strange, but it’s the best way to realize your financial dreams.
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What Does It Mean to Invest in Yourself?
First, let’s look at what investing in yourself looks like because it doesn’t always involve spending money. Time is money too, and sometimes it’s even more valuable than money. When you invest your time, you improve yourself, what you offer, or what you’re capable of achieving.
Investing in yourself can improve your career opportunities, help you earn more money, boost your confidence, or help you achieve your dreams, financial or not.
Below are the top 8 ways to invest in yourself.
Setting goals sets the roadmap for what you should do with your life. For example, if your goal is to retire by 40, you must live a frugal life, know how to invest aggressively, and possibly have multiple jobs or at least a few side gigs.
If your goal is to pay for your child’s college education without loans, you’ll need an education savings plan, an investment strategy to help you save enough money in 18 years or less, and an idea of how much college may cost when your child graduates.
Sitting down and thinking about your goals is a great way to invest in yourself. Even though it doesn’t seem like an investment, you’re giving yourself the gift of time and thought. This gives you time to strategize and realize your goals which will help you feel fulfilled and satisfied throughout your life.
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Go Back to School
If you went to school without a goal or you didn’t know what you wanted to do with your life, you may take the time now to go back to school. Even if you don’t go back to college, you could take courses or seminars that help you build better skills, making you an even better candidate for promotions or better job opportunities.
You can participate in free seminars and courses online like HubSpot offers or take paid courses, even those that offer college credit and improve your chances of moving up the corporate ladder.
Nurture Your Mind and Soul
Taking care of your mind and soul helps you feel more relaxed, more prepared, and better able to function in your personal and work life. Nurturing your mind and soul can be free, such as taking a hike through the woods or sitting outside and watching the sunset.
You can also invest in yourself and pay for meditation courses, join meditation groups, take yoga classes, or even try sound healing or other therapies that help release feelings, relax your mind, and nourish your soul.
Explore Your Creative Side
Investing in yourself doesn’t have to be just for work. You can explore your creative side for fun too. When you nurture your fun side, it’s easier to be productive and lower your stress levels in your professional life too.
Let loose a little and explore your creative side. Here are some common ways people invest in themselves creatively:
- Learn a new language
- Take a course to learn a new hobby such as cooking, knitting, woodworking, or sewing
- Learn how to write a book or create videos
- Learn to play music
- Learn a new form of art
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Learn to Declutter and Get Organized
If you’re the type that wants to be organized but can’t, consider investing in a professional who can help you get there. Whether it’s one room in your home that drives you nuts or the entire home itself, let a professional organize you and show you methods to stay organized.
When you have less clutter and more organization, you naturally decrease your stress levels which can benefit both your personal and professional life.
When you’re organized, you can find things faster, you don’t have to waste time looking for important items, and you can think clearer.
Get Life Insurance
You likely carry car, health, and home insurance, but what about insuring your life and the life of those you love? Even if your spouse doesn’t work (or you don’t), everyone is ‘worth money.’
Think about what you’d lose if your significant other died, besides the obvious. If your spouse was the caretaker at home, you’d have to pay for services to help with the kids and the house. If your spouse is the breadwinner, you would need to replace his/her income.
Life insurance feels like a nuisance, but it’s an important bill. It’s the best way to invest in yourself because it protects your loved ones if you die, and most people want to ensure the financial lives of those they love.
Life insurance doesn’t have to be expensive - you can invest in term life insurance which is the most affordable option and provides the death protection you and your loved ones need.
Invest Your Money
Investing in yourself also involves investing your money. When you invest in taxable or retirement funds, you invest in your future - so you invest in yourself.
If you’ve never invested before, start slow. Robo-advisors are great because they create your portfolio for you. All you have to do is answer some questions about your personal goals, risk tolerance, and timeline, and they create the portfolio for you.
If you’re more of a risk-taker, you can invest with an online discount broker or even an in-person broker (but they charge much higher commissions).
The key is to diversify your investments and invest in your future. Consider both taxable and tax-deferred investments.
Taxable investments incur taxes on the capital gains in the year you sell the investments. Tax-deferred investments defer the taxes until you withdraw the funds in retirement (after age 59 ½). Think about what you’ll use the funds for and when you’ll need them before choosing an account.
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Eliminate Your Debt
The average American has $92,747 in debt since the pandemic occurred. That’s a big pill to swallow since most interest rates are in the high teens. If you want to invest in yourself, make it your goal to get out of debt fast.
Even if your income dropped since the pandemic, there are ways to make extra money, putting it toward your debt. Start a side hustle or even take on a part-time job with the intent to pay off your debt.
Paying off your debt will increase your disposable income and allow you to invest in other areas that improve your life both financially and personally.
If you aren’t sure where to start, try the debt snowball method. Make the minimum payment to each credit card, but apply ‘extra’ money to the smallest debt (smallest balance). Keep doing that until you pay the card off in full. Then move on to the next debt, continually paying off each card until you are debt-free.
It’s Important to Invest in Yourself
We all focus on our professional lives or even our families but forget about ourselves. It’s important to invest in yourself because you can’t pour from an empty cup. Make sure you’re feeling good about yourself and that you’re doing what you want in life.
When you’re happy and doing what fills you up, it’s much easier to be a better spouse, parent, child, employee, or business owner.