Table of Contents
Recent news showed that Peter Thiel, co-founder of PayPal and investor in top tech companies like Facebook, has more than $5 billion dollars in his Roth IRA portfolio. Here’s the crazy thing: you’re only allowed to contribute up to $6,000 per year into it. Of course, he used investing strategies most of us don’t know how to execute and has access to financial strategies most of us don’t have access to, but it still shows the dramatic power of compounding.
I used this crazy example to expand your mind. Even if you were only a fraction as successful as Thiel, you’d be well off. You don’t need to be a billionaire with a high IQ to win the investing game. But you must understand the power of taking the time to let growth happen. This doesn’t just apply to your money—what you DO can actually compound and it can change your life
If you start to think like an investor in every area of your life, you’ll experience these compound returns and not just live a better life, but live a wildly better life than you probably can imagine right now. Let’s take a look at some different ways you can invest in your greatest asset—yourself.
1. Knowledge is power
In 2021, you have more access to knowledge than ever before. From books to YouTube videos, podcasts, and online courses, you can learn pretty much any skill. If you harness the power of that knowledge, you can change your life in a number of ways. You can take the skills you learn and turn them into a profitable side hustle or a full-time business. Or, make dramatic improvements to your life by learning to make smarter decisions because of the knowledge you gain.
Instead of trying to figure everything out for yourself, you can acquire wisdom from others and shorten your learning curve. Take books for example. Most authors spend years developing the insights they put into books and readers can access all of those insights by taking a few hours to read them. If you think like an investor, you’d understand the massive returns you can get for such a tiny investment. Years back, I read the book “Rich Dad Poor Dad” and it opened up my eyes to the importance of owning assets and thinking like an entrepreneur.
The concepts I learned in that book have helped me create thousands of dollars in revenue. I don’t know the exact math, but thousands of dollars in return for a $10 book is pretty good, wouldn’t you say? That’s just one book. Over the years, I’ve read hundreds and have used those insights to build a tailor-made career, attain financial flexibility, and most importantly give me control over what’s most important—my time.
Like I said earlier, books are just one recourse. Imagine what your life would look like if you spend a few years learning from many different mediums and applying that knowledge. When you combine knowledge from different areas, your knowledge multiplies. Just like an investment account, the more time you spend learning, the easier it is to learn and thrive at an even faster rate. When it comes to living the life you want, your willingness to learn is the number one factor in your success.
2. Your network is your net worth
You should never look at relationships transactionally. Your end goal shouldn’t be what you can get out of others. Instead, focus on bringing the right people into your life, so you can invest in each other and create mutually beneficial relationships. The more mutually beneficial relationships you create, the more your network grows. The more your network grows, the more opportunities you have that can change your life. Opportunities and rewards come as a byproduct of building sincere relationships.
This goes for more than just networking in a business context. If you have a romantic partner, it’s just as important to help them reach their goals and dreams as it is to reach your own. Too many couples focus on relationships simply from the perspective of romantic love. But when you’re with a partner, especially for the rest of your life, you’d benefit by focusing on things beyond infatuation. Couples should work together on things that have nothing to do with “love” per se—areas like finances, education, emotional well-being and mental health, physical health, communication skills, and building a true friendship that extends beyond romance.
When it comes to your friends and social circle, focus on how you can help each other grow personally, professionally, and even spiritually. Camaraderie and companionship are great, but again, truly investing in these relationships is valuable for everyone involved.
Good investments take time to grow. Transactional thinking is short-term.
Great investors are willing to weather ups and downs for long-term growth while transactional thinkers bail the minute they don’t see an immediate reward.
What’s the common denominator of all successful financial investors? They work in teams. If you work toward collaboration and growth—instead of solely focusing on “What’s in it for me?”—you’ll end up getting better long-term rewards.
3. When it comes to lasting change, this asset is everything
Saying “invest in your health” is a bit of a cliche at this point, but that doesn’t change how important it is. Health is the cornerstone of every area of your life. It doesn’t matter how much money you have if you’re not healthy enough to enjoy it. You can’t build relationships if you’re no longer around to build them.
Health is the one area that has strong positive and negative compounding effects. Poor health can lead to anxiety, stress, and poor job performance. Anxiety, stress, and poor job performance can cause problems in your relationships, finances, and your day-to-day life. The opposite is true, too. Notice how every area of your life seems to get better when you are healthier. Studies have shown a link between your gut health and your mood. Exercise can ease mental health issues like depression and anxiety. There’s been a recent focus on sleep, which has a wide array of benefits.
These are things you already know, but you can take your life and health to a new level if you take your health as seriously as a financial investment.
You know how they say “it takes money to make money.” Well, doesn’t it make sense to invest heavily into, you know, the vessel that you exist inside of?
Some may scoff at the idea of strategies like spending top-dollar for a personal trainer, eating organic food and grass-fed meats, or getting a DNA study to see which foods work best for your body. But these can be a net positive when you consider that they can help you avoid major hospital bills and preventable illnesses. Or when you look at how much more productive and efficient you can be in the marketplace if you have more energy and mental sharpness.
Your body is an asset. The more you invest in it, the higher “ROI” you’ll see throughout your entire life. The point isn’t to judge. It’s to make sure that you have the best chance possible to not only get the most from life but also live long enough to enjoy it. Building healthy habits isn’t always easy, but neither is investing in anything for the long term. Focus on playing the long game with your health.
4. The key to solving many of your problems and becoming free
Even though this is a post about investing in yourself, investing in your finances is important when it comes to your overall life satisfaction. Maybe money doesn’t buy happiness, but it can help you avoid the problems that come from a lack of money.
Also, money does provide access to things that make your life better. Having more financial resources gives you the opportunity to spend more on your health and fitness. It eases stress in relationships (remember, money problems are one of the biggest factors in divorce). When you own assets that make money for you, you have more free time to enjoy your life.
If you master the money game, you can focus more on the things that matter to you instead of always worrying about money. Unfortunately, a quick look at statistics today shows a society filled with people who are stressed out and in financial disarray.
Just 39 percent of people in America can afford a $1,000 emergency. The median retirement savings for those above age 60 is only $172,000, enough to last them just a few years. And many people have little to no retirement savings at all.
If you don’t learn how to invest, your money loses value over time. The Consumer Price Index for All Urban Consumers increased 4.2 % over 12 months from April 2020 to April 2021. In short, this means your money affords fewer products than it used to. Many are concerned with the excessive money printing from the federal reserve, which further weakens the value of your dollars.
But learning to invest your money can not only help you avoid financial woes but it can also provide great wealth if you play the long game. You don’t need to be a genius to do it well either. The strategy is simple. First, find a way to increase your income (which of course relates back to building valuable skills). You can use these skills to get a better job, start a side hustle for extra income, or run a business. Next, avoid “lifestyle creep.” Naval Ravikant put it well:
People who live far below their means enjoy a freedom that people busy upgrading their lifestyles can’t fathom.
I advise focusing on increasing your income instead of simply cutting expenses because this approach makes it much easier to save money (as long as you don’t try to keep up with the Joneses). And the more you save and invest, the easier it is to grow your money without needing crazy returns.
You can choose a simple investing method like buying index funds, blue-chip stocks, or real estate. Then, you have to do one of the most difficult yet simple strategies it takes to succeed. You have to learn how to wait. Stashing your money away, letting it grow, and leaving it alone is an unsexy yet extremely powerful strategy.
5. Change yourself and change the world
Ask not what your country can do for you, but what you can do for your country.
—John F Kennedy
These days, society is more split and divisive than ever before. Much of this comes from people thinking only of themselves. We fight over what we want instead of thinking about how we can do better. Instead of looking inward, too many of us focus on attacking others.
You don’t have to participate in the division. You can put your energy into making the world a better place instead.
But how?
First, look in the mirror and examine your own actions before judging others. Next, be intentional about treating others well. This creates the positive effect of “paying it forward.” If you’re genuine and thoughtful, you make others feel known and cared for, which can have the ripple effect of sharing that kindness. To make positive change in your community and beyond, lead by example.
Like Gandhi said:
Be the change you want to see in the world.
Don’t do good deeds because you want praise. Do it because it’s the right thing to do. Do it because treating others well and being a good example is good for your spirit. Some make the argument that all philanthropy is self-interested. This might be true, but at least it helps other people in the process.
What if we lived in a world where people focused first on being better people, then being great friends and family members, then contributing to their community, and lastly worrying about the entire society? A lot of our problems would go away. This takes personal responsibility, which isn’t a priority for everyone. But you don’t have to worry about everyone else—be the exception and try to make positive contributions everywhere you go.
Final thoughts on how to change your life
It’s no coincidence that the wealthiest people on planet earth are investors. But, as you can see in this post, you can attain wealth in many other areas aside from your finances. Live a life of wealth in every area of your life. Each of the points above overlap with one another. When you do well in one area, it positively affects the rest. Get great at investing in all of them over time, and you can dramatically improve your life.
The best part of it all? These strategies are simple. Yes, they require patience, a bit of diligence, and the right mindset. You have the power to take ownership over all of these things, but you have to decide to become an investor in your own life.
No one can do that for you, but understand that you already have everything you need to start.