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The best investment you will make

lschultebraucks profile image Lasse Schultebraucks ・1 min read

The best investment if you are young (not only if you are young) is probably not investing all your money in assets like the stock market.

You probably don't reached the highest potential of your income.

So investing in yourself will probably have an higher effect on your income than investing in assets like stocks or fonds.

If you have higher skills and knowledge on your field, you will earn more money.

I don't say that you should not invest a little bit of your money. I build up financial resource assets since I am 18 years old.

But your biggest asset is yourself. So investing in yourself should be more important to you than investing in other assets. You should always choose investing in yourself before investing in the stock market etc.

In Brian Tracys book "No Excuses" he describes the 3%-formula. He says, that to guarantee your lifelong success, you should make a decision today to invest 3% of your income back into yourself.

So if you are making 10,000$, invest 300$ in yourself.
If you are making 50,000$, invest 1,500$ in yourself.
If you are making 100,000$ invest 3,000$ in yourself.
I think you got the point.

This is definitely something that everybody can apply, no matter how much money they earn at the moment.

Investing in yourself with the 3% rule will increase your income by far more than only 3%. Especially if you are young, your yearly income will increase at a high rate if you put in the effort.

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Lasse Schultebraucks

@lschultebraucks

I am passionate about Software Development.

Discussion

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Brokers hate him, use this one trick...

Contextually, the currency of self investment/learning is mostly measured in time.
I would probably change the numbers a bit and say that for every X hours spend on something ~5% should be done learning.

The earlier in your career the bigger that number needs to be tho.
For a junior i would probably expect something more like 20%. :)

 

Yeah I agree. Time is important, but in this post I wanted to highlight the investment of your income in yourself. So e.g. Brian Tracy, who mentioned the 3% Rule in his book said that 2 hours of investing everyday is enough to get to the top of your field. If you buy courses and books with 3% of your current income it is of course not worth it if you don't read and watch them.

 

Great food for thought. I spent a few years studying markets and found that the return on investment, when risk was factored in, was not even close to investing in myself (skills, habits, etc.). Also, when factoring in the adverse health effects like stress, it actually yielded a steep negative return. Having it be a part of a portfolio is certainly a good idea, but I would never let it become a full-time gig again.

 

But your biggest asset is yourself. So investing in yourself should be more important to you than investing in other assets.

I agree. Investing in stocks is also a skill, so at the end of the day, you may need to invest on investment courses for yourself. If there are any. 😄

 

Yeah I agree. Therefore I just put a little bit of my money in managed funds.