Investing In Yourself Is Better Than Any Stock Market Return

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why you should invest in yourself

There’s an investing secret that you probably didn’t hear in school. You also won’t get it browsing Reddit investing forums or get-rich-quick books. Are you ready for it?

The best investment you’ll ever make is making the decision to invest in yourself. No, it’s not a cheesy, hollow platitude. Investing in yourself can actually pay off richly. That’s because you can control your own “market value” even when the stock market isn’t quite so predictable. And your returns will follow you forever, regardless of where you live and what the market is up to.

Of course, investing in yourself doesn’t mean not investing in other pursuits. It just means that you have some tricks in your toolkit that no market conditions can take away from you. Take a look at the best ways to invest in yourself to get success beyond stocks.

Make A Plan To Save Money First

why you should be investing in yourself

Before I get going. Really quickly, not enough of us are actually treating saving money as an investment strategy. Ultimately, investing just means using your money for long-term gain and security. You need to save money to start investing, and then save your investment earnings to benefit from them. While most people don’t think of saving as investing, it’s mandatory to live the life you want.

Invest In Updating Your Job Skills

Many people get so focused on handling current roles and projects at work that they forget that a career is also an investment strategy. Yes, it’s important to simply get the things done that need to be done at work. However, you shouldn’t just focus on getting the job done today.

It’s necessary to project yourself into your “future” career trajectory to discover the skills that will continue to make you highly employable 3, 5 or 10 years from now. In many cases, learning an additional skill related to your field can help you be ready to transition to a higher-paying role when an opportunity presents itself.

Stay in the state of mind that you’re always preparing for a big job interview that’s six months away. This will keep you on a path of constantly “leveling up” to put new items on your résumé. You may also discover that you’re outgrowing your current job role much faster than you would have if you kept your skills stagnant.

I’m in management, and we managers notice things like that VERY easily even if we don’t bring it up (bringing it up brings the obvious “can I get a promotion” discussion, which is good for you and trouble for us)!

There are some specific skills that can be very lucrative that aren’t all that challenging to master. Your “secret investing opportunity” here is discovering which skills other people are neglecting, then positioning yourself to fill in the gap.

To help you out, when PayScale polled managers about the skills that recent graduates were lacking, they found a mix of hard and soft skills. For soft skills, managers reported that new grads lacked proficiency in critical thinking/problem solving (60%), attention to detail (56%), communication (46%), ownership (44%), leadership (44%) and interpersonal skills/teamwork (36%).

For hard skills, managers cited the missing skills of writing proficiency (44%), public speaking (39%), data analysis (36%), industry-specific software (34%), mathematics (19%) and design (14%). These are all things that can be mastered with online courses if you have the right motivation. That means you can grow skills that are wanted straight from the mouths of hiring managers.

Invest Actual Money And Time In Yourself

invest in yourself

The amount of reluctance that people have when it comes to actually investing time and money in their own value is shocking. While it’s true that there’s a lot to be learned from forums, blogs and podcasts, these “passive” resources for expanding your knowledge toolkits aren’t thorough enough to really count as personal investments.

For true impact, you need to invest in master-level courses. Many people never get to this step because they feel that spending money to learn something new is a waste of money.

There’s a reason behind why investing in yourself using actual money is bigger than just the difference in quality between paid training resources and free training resources.

The first reason why you should actually make a financial investment when investing in yourself is that you’re more likely to actually follow through if you have some skin in the game.

If you don’t make a monetary commitment to a structured course, you’re far more likely to not follow through. That makes it really easy to give in to excuses when you’re busy, tired or unmotivated to do the work required to learn the skill you want to learn.

You’ll also be able to tell yourself that you’ll just restart the course when it’s a better time for you. If you know anything about human nature and procrastination, you know that time will never come. You simply won’t have the motivation to guard your time to be a more productive person if you aren’t “feeling the pain.”

The second big reason why you really should invest money when investing in your own professional development is that you’re far more likely to settle for an inferior training option just because it’s being offered for free. It’s something that researchers call the Zero Price Effect.

When we are offered free products, we actually have an extreme positive reaction that clouds our judgment. We’ll forgo options that are better because we’re so artificially enthusiastic about the “free” option that may not be all that great.

Worse, our brains actually convince us that we’re following a “gut feeling” when the reality is that our brains are really just gravitating toward the “no risk” option of something that doesn’t require an investment.

Why would anyone think that a no-risk strategy that doesn’t work when investing in actual stocks (i.e. 100% bond allocation) would work when investing in ourselves?

Investing In Yourself Is VERY Lucrative

I’m sure some of you are thinking this is all well and good. What course am I offering? No course, this is such a good life hack that it pains me to see people missing out.

Seriously, a $1000 course can easily leave you getting a 10% raise. If you earn $60,000/year, that’s a 600% return, every year, forever!

It doesn’t matter how smart you are, you will never match that in the stock market and it’s the surest way to become a millionaire in my books.

Take Some Cues From the Stock Market When Investing in Yourself

When making the decision to pivot to investing in yourself, you can actually follow some cues from stock investing to start off on the right foot. If you were new to the stock market, you wouldn’t necessarily pour your life savings into the market on the first day. The same thing is true when investing in yourself.

You don’t have to rearrange your entire life to become a full-time cheerleader for yourself. Start by making “small investments” that will help you see returns. Each investment is a stepping stone to being better at making good investment decisions because you’re not coming from a place of desperation or insecurity. You can’t lose when the asset you’re betting on is yourself!

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Author: Leif Kristjansen

Leif Kristjansen is the co-founder of FiveYearFIREescape.com where he and his wife write about finances and early retirement for busy people. They have a funny take on retirement that involves working...but differently! They have kids and a house in a high cost of living city but managed to succeed via saving skills and rental houses.

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