How To Actually Invest in Yourself: A Guide to Get the Most Out of Your Personal Money
Everybody says that the best investment you can make is in yourself, but nobody teaches you how to do it efficiently.
“The best investment you can make is in yourself.”
If you have read at least three personal development or finance books, you have probably read that phrase before.
On paper, it sounds nice. No asset will be as valuable as spending money on your own development.
However, this advice is empty and meaningless when you don’t know how to invest in yourself properly and what things actually make sense to spend money on that are worth more than real estate or stock.
For this reason, I built a system that has allowed me to understand what purchases can be treated as investments and actually helped me earn more money in the process.
They can be divided into two big components, and here I will show you what they are and how you can apply them in your life.
Investment #1: Leveraging your skills.
An expense can be considered a personal investment if it helps you improve a skill you can use to earn more money. They can be knowledge or an ability.
In the area of knowledge, you can leverage your skills by buying books in the area you want to develop, courses, certifications, seminars, etc.
For example, I went to college, which gave me the knowledge I needed to start working as a Software developer. Then, I bought an online course to get a certification in a new technology that helped me improve my curriculum and get a better job.
When I started writing, I paid a total of $800 for courses that helped me improve my writing skills, and with them, I have made 5 figures online.
In the financial area, I have bought books that have helped me better manage my money and learn the best way to invest it, so $14 has become $100 or $1000 in passive income.
In the area of ability, there are seminars, mentorships, tutorials, and all the things that you can pay for that can help you perform your job in a better way.
For example, I subscribe to a newsletter that gives me weekly React advice. I have paid Duolingo to improve my English and French, which has helped me get international opportunities. I’ve also paid several people to give me business advice.
You must be careful when investing in this option because we often buy things that we believe can help us improve in some skill, but then we do nothing with that knowledge.
For example, I know hundreds of people who are obsessed with personal development. They read innumerable books on how to be a better person but then do nothing with that knowledge.
So, not every course or book you buy can help you earn more money, and to fix that, you have to be careful in choosing what to spend your money on.
To determine if something is worth paying money for, I analyze what I can do to earn money after I acquire that skill or knowledge and how much money I could make with it.
For example, when I bought the React course for $11, I knew it was a good investment because companies pay a minimum of $3000 monthly to know this technology.
However, I know that, for example, a public speaking course would not be good for me at the moment because I do not want to develop in public speaking and will not use that knowledge to earn money.
So knowledge is only an investment when you know you can take advantage of it after learning it. And the end result (or profit) you can make out of that investment is all the things you can do with that new skill.
Investment #2. Maximizing your output.
A personal expense can also be considered an investment if it helps you reduce the time you spend doing something and, as a result, increases your productivity.
They could be working output tools or time wasters.
Working output tools are premium things you pay so you can do something faster or easily, and as a result, you have a higher quality of work and faster working speed.
For example, as a software developer, I pay for AI tools that allow me to write code faster. Many cost as little as $20 a month, but it helps me earn up to $100 every time I use them.
As a content creator, premium tools can be automated for uploading posts for social networks, and a freelance editor helps me not have to spend hours editing my video, so I can use those hours to create more content for the channel.
Times-wasters can be anything you buy to avoid doing something. As a result, you have more time to dedicate to your job and business and make more money.
For example, I have a friend who buys food daily despite it being a big expense that is widely criticized in the world of personal finance.
When we asked him why he decided not to cook to save money monthly, he said that he would lose more money cooking at home than shopping on the street.
He earns $80 an hour and has two jobs to which he has to dedicate a lot of time and concentration. Cooking takes him 2 hours of work and probably an hour to refocus again, so he would lose $240 every time he decides to cook but only spend $20-$40 ordering food.
In my case, I paid for a cleaning service that cost me $200 monthly, so I don’t have to clean my house and spend 3 hours every day on it. I pay $10 to wash my car, $20 to do my nails (because if I do it myself, I spend 4 hours trying to make them look perfect), and a car so I don’t spend hours on public transportation.
To analyze what things are really worth paying for, ask yourself what you would be gaining if you decided not to do that thing and how long it would take you to do it yourself.
If paying for it is cheaper than doing it yourself, and you can use your time efficiently to do something better, then it is an investment.
An example of this was one time I had to go from Boston to Pennsylvania, and I was deciding between going by plane, which cost $120, but I was going to be there at the destination in 1 hour, or going by bus, which cost $40, but I was going to have to last 6 hours to arrive.
Six hours of work were much more than the plane cost, so the plane was worth more to me.
I know people who have spent $12 on an application that locks their phone for a few hours, and as a result, they have gained up to 5 hours of work and productivity a day.
So maximizing your output is a good investment when it helps you save time, and as a result, you are more productive and have more opportunities to earn more money.
The best investment you can make is in yourself as long as you know what things you have to spend to improve your life in the long term. The way I do it is in two principal components:
- On things that help me leverage my skills.
- Maximizing my output.
When I invest money in things that improve my skills, I can get better jobs and better clients who are willing to pay more for the things I know. If I invest in myself in proper knowledge, I know exactly what I need to create a business that can succeed.
In the investments field, having greater knowledge helps me make better financial decisions that allow me to grow the money I already have. It doesn’t matter how much money I have to invest; if I don’t have the necessary skills, I won’t be able to make it grow.
Investing in myself helps me to make the exact decisions to make any work or investment happen as I want.
When I invest money in maximizing my output, I delete from my life everything that could be a distraction so I can focus only on things that matter. This means that if a car helps me get better to a place than going walking, investing in that can help me use that time to make more money.
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