Let’s just get one thing straight: I am so not an active investor. That said, I still have a pretty strong opinion about the single best investment you can make in 2017, and luckily enough, you can be just as passive an investor as I am to do it.
And no, this is not another post about my love affair with robo-advisors.
Instead, I want to tell you about an investment I made last year that earned me a 314.52% return.
It was something I was excited about, and something I knew a fair bit about before I dove in. It took time and knowledge, as most active investing opportunities do (or so I hear anyways) but it paid off, big time.
It was me.
The best investment you can make in 2017 is in yourself
“Investing in myself” sounds like I just bought myself a bunch of massages because I deserve it (I do, my shoulders are terrible) but by “investing in myself,” I’m referring to the money I spent on growing my skills, growing my business and learning how to manage my money.
When I look at money spent on those categories – which I can track down to the penny thanks to my pesky tracking-my-spending habit – and compare it to the extra money I’ve earned, those “investments” have ended up making me an additional $3 for every $1 I spent on them.
Pretty nifty, right?
And you don’t have to have anything close to an official “business” to have all of this apply directly to you, either. If you’re sitting there like “I don’t blog, or dog walk, or side hustle at all,” don’t worry: Investing in yourself is still one of the best ways you can spend your time and money.
Here’s why, and how to do it.
Investing in skills that make you money
When I took a look at the amount I had spent on Half Banked way back in September (light years ago, really) I made sure to note that I didn’t view that money as just about the blog. Sure, I love working on Half Banked, and it’s my favourite hobby, but it’s also a way for me to get hands-on experience with parts of marketing I rarely get to implement in my day job.
So when I spend money on the blog – like for my email marketing software, or graphics that I’ll edit in Photoshop – I know it’s helping me learn skills that are directly applicable to my main source of income.
Being better at your job is never a bad investment, and in my experience, it always pays off in the end.
If you want to invest in growing your skills this year, think about the following questions.
- How can you get hands-on experience?
- Which skills are in-demand in your industry?
- Are there reputable training courses out there you could invest in?
- How will these skills help you in the future?
Investing in your ability to make money
This might sound like the exact same thing as skills, but trust me, it’s not.
When I think about this category, it’s why I made decisions – and spent money – on the things that would help Half Banked grow, not just be a practice ground for my marketing tactics. See, without this blog and its growth, I’d never have found opportunities to freelance, and share some of my personal favourite financial tools with you guys.
This biz has turned into an additional way to make money, outside of my day job. Even if the skills involved were totally irrelevant to my work, that alone would have been worth investing in, because everything people say about multiple streams of income is hella true.
Having multiple streams of income is a great way to hit your goals faster.
It is a great way to diversify, so that you’re not as reliant on one specific source of money.
It is the perfect way to feel more secure while you’re building up your emergency fund.
So if there’s an idea you’ve had kicking around in your head, about how you could earn some extra cash this year by monetizing the skills you already have? That’s worth investing in, whether the investment is dog treats for your new dog-walking biz, or a website for your niche freelance writing services.
And yes, it’s even worth investing in if your biz idea doesn’t work out. You’ve learned something from it, and you’ll be more prepared to evaluate the next opportunity you see. (Just ask me about the time I thought I was going to run an Etsy store. Ahahahahahaha omg no.)
Investing in your ability to manage money
Last but certainly not least, investing in your ability to manage money is always going to pay off – even if it just means spending time reading financial blogs. Because yes, investing time is a real investment. (Ask me how much time I spend on this blog. Seriously, ask. It’s so much time.)
One of the biggest debates in the “personal finance world” is whether earning more or spending less really matters more. You’ve got some people who fall on extreme ends of the spectrum, who advocate spending almost nothing, or who rely on earning mountains of money, but most of us normals will fall somewhere in the middle.
Personally, I think they’re both important, and the best way to master your money is to focus on doing both at the same time. Think about it: if you spend a bit less, and earn a bit more, it’s a double whammy for your money (and you’ll be able to afford that dream trip, or that dog, or that fully-funded emergency fund way faster).
That said, both of them are easier said than done, and since the first two ways we talked about investing in yourself focused on the earning more side, I have to give a shout out to the “learning how to spend less” side of things.
If you’re just getting started with the whole managing-money thing, my best advice is to pick one small step, and do that – and no, I don’t mean giving up lattes. (I never mean give up lattes, let’s be serious.) That’s the advanced level, and honestly, if you like lattes? You’ll find money in your budget to accommodate them. I certainly have.
Instead, pick one thing that will give you a quick win without being overwhelming.
Follow it up with another small thing next month.
Building from those wins will have you feeling like A Person Who Manages Their Money Like a Boss in no time, and then you can tackle the big stuff, like saving a hefty emergency fund or totally overhauling your spending patterns.
For some ultra-quick wins you might want to tackle this week, why not…
- Map out your big expenses this year. You’ll have a better idea of what’s coming, and even that knowledge (sans savings plan) will help you avoid overspending.
- Commit to a free five-day investing email course that will give you the info you need to figure out which beginner-friendly investing method is right for you (Harry Potter references very much included).
- Figure out how much you need in your emergency fund. Not even save it, just know it.
- Read one book about money (you can find some of my faves at the bottom of this page, all of which are hella interesting).
The most important thing is to keep going.
Eventually, those small things will add up to big wins.
Example: I switched to an online bank almost two years ago, and it was my first foray into taking an active interest in my money. I’ve saved over $200 in fees since then, and earned over $100 in interest – just from my regular online bank, not my high-interest savings account.
Plus, when I started seeing the returns on my other investments in myself, I knew exactly how to handle them, where the money was going, and which goals to put that extra cash towards.
Managing your money is the foundation for making sure your investments in yourself actually help you get where you want to go – instead of just ending up with a bunch of stuff you don’t care about.
How are you planning to invest in yourself in 2017? I want to hear about it!
I love this. I always smile when I see people ask what they should do if they have five hundred dollars to invest. Invest in yourself! Developing skills and knowledge is huge, invaluable truly! Love, love, love this!
You’re so good at this too, on both the time and money front! I can’t even imagine pursuing another degree while working full time and running a blog.
Oh my god I have to lie down just thinking about it, and I’m in the office. This is so awkward.
I don’t really have the money to invest too much into myself, but I do have the time. So that’s what I’m doing! I really want my writing and my blog to grow, which I can easily do without spending any more money than I already have – but I do need to spend more time. Once I exhaust my free options, I’ll look into where I can best spend my money to help me grow. I’m sure there are a lot of options! But for now, I’m investing in me for free 🙂
Time sooooo counts! Honestly, when I look back at the amount of sheer time I spent before making a penny from the blog, I know it was a direct result of the time I spent learning and working on it – and you can find enough to learn almost any skill for free online these days! (Whenever people get mad about the evils of the internet, that’s my go-to point, lol.) The free options these days are unparalleled.
I’m definitely on the side of earning more AND spending less. So I guess that actually puts me in the middle 🙂
As far as what I plan to do this year…I plan to start taking my blog seriously and acting like it’s a business, because it is. I’d love to reach a ton more people and even mapped out how many visitors I want to see each day by a certain point.
I love the idea of investing in yourself. Thanks for being an inspiration to the rest of us!
Mrs. Mad Money Monster
Cheers to being in the middle on that particular topic! It’s totally a false choice – you need to do both (unless you really are the 1% of income earners or the 1% of frugality… and even then, it’s hard to out-earn stupid spending! There’s a reason yachts are A Thing, after all.)
And EVEN MORE cheers to treating your blog like a business! As I mentioned on Twitter, it’s been a much-needed and very valuable mindset shift for me, and I can’t wait to see where it takes me this year!
LOVED this post, Des. It’s especially nice to hear as I’m planning to spend $20k + on grad school this year lolololol But in all seriousness, I don’t except to see an immediate return on my investment in a monetary sense (we all know teachers are underpaid) but I do expect to see it a few years down the road as I become more engaged in my career, hopefully move up into administration, apply for teaching grants + other opportunities and you know feel HAPPIER and more motivated in my day-to-day life. Happy new years, friend.
Lol did I mention the part where everything I contemplate investing in costs way less than an MBA? I feel like I didn’t, but sometimes that’s the metric I use to justify the business books I want to read, lmao – but in some fields, like yours, it’s not quite as optional (or outdated, but don’t get me started on the whole to-do-an-MBA-or-not thing!) I’m so so so excited for you and this adventure you’re embarking on – and I’m so glad you have the support system and the ability to make this change! I think you’re going to be the most kick-ass teacher ever 🙂
Agreed. Last year I invested in myself to finally get my P.eng. this year I’m looking into my PMP designation. Both of those combined should open a lot of doors in my future
Oooof, that is a powerful combo! And knowing what a close friend just went through to get their P.Eng, CONGRATS! All of the high fives from me Stephen – that is no easy feat. And PMP on top of that? Just a casual plan to rule the world 😉
Okay, okay… I’ll get my P.Eng already… Geeze, stop applying all that pressure! 🙂
It’s amazing what we can accomplish when we take the time to set goals and write them down. Some of these things only take a few minutes, yet we never get around to them if we don’t make them a priority.
Right?! Writing down goals and formalizing them has been so huge for me in terms of hitting them and tracking my progress. And even when I miss them, I can at least analyze what happened and why!