Investing in yourself
The best thing to invest in maybe be yourself. This means spending time and money to eat well, sleep enough, get exercise. It also means learning new things to keep sharp, as well as learning new things that might help your professional aspirations. What else does it mean?
Residual income/income provided over time
Nonetheless, ‘investing in yourself’ is only part of the picture. There may be a time when your energies are focused elsewhere and you are not working. For example, an extended vacation or trip, helping out family members, an illness, going back to school, retirement are all possibilities. You can’t be a professional football player in your 50s! You’d be retired and would hopefully have saved some or your money. In this case, you need to have your money somewhere. Stocks, bonds, cash, real estate, collectibles, etc. This article doesn’t talk about the details of investing.
But there must be some more ideas that are somewhat outside the box. Not to say they necessarily are the best ideas but just so one can have a broader picture of possibilities. How about: starting a business, starting a turnkey business, inventing something, writing a book or a song. All these aren’t really investing in something but rather creating something that at a later date might, among other things, produce income. If you start seeing investing as not just supporting other people’s creations (like investing in a stock such as “Bill Gate’s” Microsoft), but also creating things that might benefit others, then investing takes on a new perpective. It means creating value for the world, as opposed to helping other people create value for the world.
Helping others create value in the world is good. The main thing is creating value, not so much who does the creating. It’s just important to look at how many ways can one create value. What about microfinance or investing in timber, or other projects that would benefit people or systems that conventional ideas may not support so directly?
Diversification
How important is diversification? And to what invests does it apply? Certainly to stocks and bonds.
Currency
What about cash? How many people have multicurrency money markets? Are they available? Is it a good idea? For long-term investing currency probably doesn’t appreciate like stocks or bonds, but having positions in several currency probably lowers volatility. But to what extent? Don’t know. But currency is truly an investment even if people don’t want to admit it. When you choose to keep your money in dollars or euros, you are implicitly making a decision about the future course of events. For example, if you were in Germany in the 1930s, you should have had US dollars (it’s an understatement that you probably couldn’t have switched very easily). If you were in the US in the 2000s you should have had some euros!
Real estate
Real estate? If you have enough money you can diversify or an REIT or some vehicle to spread the risk among more properties. But how many people can invest on a large scale in real estate in another country or continent? At some point other more important factors become more important than diversification. As for Fannie and Freddie, one perspective is “government social engineering gone predictably bad”. This may not reflect the whole picture but the bailout could then be bailout might be viewed as “the state bailing out statism”. (Quotes from Sheldon Richman)
Government
This brings up an important point. Governments. When one puts money into something, it generally has some sort of affiliation with a government. But to be diversified in relation to governments one should have money spread among entities that are under different different governmental jurisdictions. How does one do this? Is this an important consideration or aspect of investing?
What about diversifying when you ‘invest in yourself’?
If you do too much you won’t get anything done. And how many professional athletes play more than one sport well? Michael Jordan? But being very focused may not be for everyone either. You can’t just eat good food and not get enough sleep. You have to do both. In fact you have do a lot of stuff. Brush your teeth. Wash. Eat. Exercise. Relax. Sleep. Just a few basic things among many.
What other questions could provoke more new ideas in the subject of personal investment? Another interesting point or idea is to look at someone who maybe doesn’t live in a place where stocks and bonds are a practical possibility. How and what do you invest in? What does someone who is successful in that society do? The answer may not directly apply to someone from another place and/or time but certainly it expands the range of the question. Perhaps the manner in which someone should invest in oneself is universal?
What would you do if you lived in Africa in 1950 or Europe in 1750 or North America in 1550? What would your financial advisor tell you to do then? Buy Manhattan? How would you invest in yourself? Maybe the answer is the same in all cases for you but not for everyone or vice versa. How would you really know until you got there? You would still need to eat well, get enough sleep, etc.
Universal truths about investing
Are there universal truths about investing that could be applied across the continuum of human existence? If so what are they? Perhaps the search for the answers to these questions will provide more long-term benefits than actual answers themselves? Anyways, best wishes and in the meantime invest in yourself.