Many people who endured the Covid-19 pandemic hard lockdown and now face great uncertainty in their lives probably reflected on how life can suddenly become so imperilled and on how they could make themselves more resilient against future disruptive events, however big or small. In short, what options do you have to invest in a more secure and sustainable future?
The best investment you will ever make
Over the years I have met many clients who are faced with choices. Most often these choices are related to making an investment decision and hence the reason they are approaching us. Being a lifestyle financial planner we will always step back and try and look at the full picture and not the investment decision in isolation.
Sometimes the decision is whether to spend money improving oneself in some shape or form by, for example, furthering your education or making yourself more marketable versus an investment in, say, a unit trust.
Warren Buffet once said that the best investment you are likely to make is an investment in yourself.
We could not agree more with this statement and will often advise clients along these same lines.
What exactly does it mean to make an investment in yourself? How on earth does that investment give you a good return?
It can be very difficult making these types of decisions when you have no tangible return metrics to measure. It is especially hard to make that decision when you are in essence the investable asset – you may not be that objective.
As we all know a good education is the key to success, and any investment in educating yourself at any point in your life is a great investment. By getting a better education you drive up the demand for your skills. This leads to you being able to improve your income earning potential over the rest of your working life. That is a huge return especially if you have a long working life ahead of you with a higher income earning potential.
Health and wellness
In many cases, the investment decision may not even be a monetary one. Simply spending time on your health and wellness will reap benefits down the line. Instead of spending endless hours watching Netflix or mindlessly surfing social media (which of course is entertaining) spend the time investing in yourself. You will be handsomely rewarded in time.
Take your health and wellness seriously. Be active, watch your diet and keep a good work-life balance. These are small investments of your time over a long period.
Learning new skills
I firmly believe that you can ‘teach an old dog new tricks’. You are never too old to learn something new. We often come across 80- and 90-year-olds who are constantly signing up to learn new skills. Many of these courses are now online and very affordable. Keep your mind active and cross-train by learning new skills. A small monetary investment coupled with an investment of your time may very well lead to a new career opportunity or simply just bring you joy and contentment.
Just like any investment the best results are experienced when you have time on your side. This gives the investment the opportunity to grow exponentially through the power of compounding.
By saving every month over your lifetime you will amass a sizeable investment given time and the effect of compounding. Much the same as monetary investments, incremental investments in oneself over time will reap handsome results. The key ingredient with any investment is time. One needs to use your time wisely.
Longevity and the need to reskill
In their book ‘The 100-year life’, authors Lynda Gratton and Andrew Scott state that many of us have been raised on the traditional approach to our working lives: education followed by work and then retirement. Life expectancy is rising and this well-established pathway is beginning to collapse. They believe we need to do things differently and suggest a multi career life will become the norm and that retirement as we know it today will be different. This will entail the need to reinvest in oneself constantly throughout life, reskilling, educating further and learning completely new skills along the way.
Making yourself more resilient and securing a more sustainable future is clearly not only about investing your money but investing in yourself. If this year has taught us anything it’s that.