Nothing irritates me more than listening to self-proclaimed personal finance experts because the majority sound like a broken record.
Below is the advice we hear from 99% of them:
- Create a budget
- Stop drinking coffee at Starbucks
- Save 10% of your income minimum for retirement
First, how many people create a budget and actually stick to it?
Second, is saving $3.00 on a cup of coffee every day ($90 a month) really go help you go from broke to mogul?
Third, is the stock market really the best place for your money?
My goal for you at Stuff Parents Like isn’t to worry about spending money, it’s to make much more money so you don’t have those stresses.
We can get into how to really save money and invest in the stock market later, but today I want to discuss the best place to put your money.
It’s what I call the 3% rule.
Three percent (minimum) should be invested back into yourself because you are your greatest investment.
This obviously means if you make $50,000 a year, then you should spend at least $1,500 on ways to improve yourself. We aren’t talking about clothes or shoes either!
When we study successful people they are alway investing back into themselves because they know the returns are astronomical. They don’t do this once they became successful, they started long before they made their fortunes.
Why Invest Back Into Yourself?
1) You Learn New Skills
Did you know over 40% of college graduates never read a single book after graduation? Also, 80% of American families won’t purchase one book over the next 12 months!
If more than 40% of college grads aren’t reading books EVER, then they probably aren’t doing much else to improve their skills or knowledge.
When you consistently read books, take online classes, or get more credentials; then you are setting yourself apart from others in your field. You are becoming an expert.
2) You Become More Marketable
Imagine if your dentist never learned anything after graduating dental school. Would you trust him to perform a root canal on you?
Whatever your profession, you need to learn new skills that pertain to your job and ones that don’t pertain to your specific job.
When you learn new skills that pertain to your job, then you become an expert. If you are a financial advisor, then get your CFP. If you are a teacher, learn new ways to teach to a “techy” generation.
When you learn new skills that don’t pertain to your job, then you become the most employable person ever.
Here is a small list of skills everyone should learn no matter your career:
- How to read profit/loss statements
- Personal finances
- How to read people
- How to properly build a network
- Managing/motivating people
These are skills sets that will transcend over many different career fields.
3) You May Discover a New Passion
30 years ago no one ever said, “I want to grow up and make iPhone apps. Or “I want to host my own podcast”.
The point is things change quickly and when you continue to learn, then you may discover a new passion. That new passion may turn into a new career or business.
A few years ago, I didn’t know much about starting a blog or an email list. Then I started learning how to build websites and how to use mail chimp.
The more I learned, the more I enjoyed it.
Then, as James Altucher says, I had idea sex. I took my enjoyment of building a website along with my passion for family, fitness, and finances and created Stuff Parents Like.
If you have an interest in other areas then check out sites like Udemy or Teachable. There are thousands of inexpensive courses that can teach you everything from how to code to building your own website.
4) Action Creates Opportunities
When you take the initiative to learn new skills, new opportunities will present themselves.
There are an endless amount of examples that prove this principal, but below are just a few stories I love:
- Lewis Howes was broke on his sister’s couch and mastered LinkedIn. Then he taught others how to use it and now runs the School of Greatness.
- My friend, Alex Barker runs the 66 Day Experiment and is a pharmacist, but has made a great side business by creating websites and podcasts.
- Natalie Jill was broke when she started her fitness empire.
I like to share these stories because these people weren’t given anything. They are like you and me.
They didn’t have famous parents. They weren’t CEOs. They didn’t have millions in the bank. They just took action and created opportunity.
How do you invest in yourself?
Luckily, we live in an incredible time. There are endless ways to invest in yourself.
Here are my favorite ways to invest in yourself (many are free):
- Online courses
- Magazine subscriptions (the paper ones that come in your mailbox)
If you didn’t find anything that will help your personal development efforts, then I suggest checking out some of these great posts:
- 50 Life Hacks Your Future Self Will Thank You For – J.D. Meier at Sources of Insight
- 10 Personal Development Ideas – Simona Rich
- 50 Self Improvement Tips for Success at Work and Life – MBA Crystal Ball
I cannot reiterate enough investing in yourself is the greatest investment you can make. Instead of earning the traditional 10%, you will quickly learn the returns are much higher.
Start with the 3% rule and soon you will discover a whole new world.