What is the best investment?
15 Jul 2013
As a Private Client Adviser, one of the issues I often get asked is, 'what is the best investment?'. Typically people are accustomed to considering various options such as cash, term deposits, bonds, property, shares and the like (a few may like to consider the hottest tip in an upcoming race at Flemington on Saturday an investment, but that is never going to be a sound strategy for wealth creation!).
Albeit all of these (not including the hot tip on the horses), are possible sound investment choices in the right circumstances, in my opinion there is one investment that it universally going to be, THE best investment that can be made. It is to invest in yourself!
Investing in yourself can be summed up as simply, any endeavour that improves your talents, skills or knowledge. The required investment to do this can be a sacrifice that is either of a financial, time or an emotional nature.
Warren Buffett, one of the world's wealthiest, admired and emulated investor's once said that,
"the most important investment you can make is in yourself...Potential exceeds realisation in many people...You can become to an enormous degree the person you want to be." He added that if you have "maximised your talent, you have a tremendous asset that can return tenfold".
To invest in yourself, does not mean everyone should seek a university education, nor does it stop at our formal schooling days. Crucially it is a commitment to lifelong learning.
Formal education and qualifications are important, and pursuing higher and more varied qualifications are great, but equally valid are the informal means of development. Attending short courses, reading good books, listening to podcasts and attending webinars produced by known authorities in a subject matter, are a great means of extending ourselves. The internet has enabled access to a vast amount of information (but be sure it's from a reputable source) that makes this a possibility to everyone.
Proactively seeking training opportunities offered by employers or industry participants is an awesome way to access ongoing development. Unfortunately some people adopt an attitude that it is a burden and an inconvenient interruption to their day or week. Instead it should be relished and taken advantage of as an opportunity to improve skills and knowledge.
The most important thing to do is to apply the knowledge. If it is not revisited within a day or so of learning it, and then a concerted effort made to do what was learnt, it is almost a pointless exercise.
Why is investing in yourself so important and valuable?
It is the only investment that is durable and able to withstand downturns in any market, legislation change or tax regime. It cannot be lost, stolen or taxed away.
We can lose our job, our business, and any number of other investments. The one constant that will never be lost however is our own knowledge, experience, skills and talents. With these we can start again – get a different job, start a new business or venture. The better we have invested in ourselves the better the recovery and quicker it can be implemented.
Investing in ourselves enables us to be adaptable and resilient in an ever changing world. The days of staying in one job with one firm for the duration of our working lives are behind us. Investing in ourselves is critical to 'future proofing' our incomes and lives.
As the classic Chinese proverb says, 'give a man a fish and you will feed him for a day, teach him to fish and you will feed him for a lifetime'.
It is the only investment that we have complete control over. It will perform as well as we want it to, and its 'performance' is largely proportional to the effort we put in.
Investing in ourselves can offer tremendous financial rewards, such as the ability to adapt as things change and continue to generate an income and increased income levels through promotions or better business outcomes for those self employed. It also brings about marked improvements in our feelings of self worth, satisfaction and a sense of fulfilment in our work and business lives. This helps us to live happier lives which carry through to our personal relationships and lives too.
Investing in ourselves may be the best investment we can make, but only we can make it – no one can do it for us. What will you do today to make sure you have not made reading this a waste of your time?
To learn more about Alistair, view his online profile.
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