Forget Stocks, Buy Yourself!
- December 11th, 2008
Our society tends to be mesmerized by the ups and downs of the stock market. We place stock market gurus such as Warren Buffet on the top of our most admired list and crown him as a financial super hero. I’ll be the first to admit that his story of rags to riches via the stock market is compelling, but it’s very difficult to repeat. Very few of us will ever get rich dumping money into our 401k or buying stock with our online accounts. In fact today, most people are happy with a modest gain. It simply amazes me when I hear people brag about getting a return on their 401k of 20%; then the next moment they are complaining about their job. While 20% return is a solid pay back on your investment relative to stock market performance of late, it pales in comparison to the return you can get if you simply Invest in Yourself.
I’ve had a fair amount of success over the years buying and selling stocks, never enough to retire, but often times I get asked what I’m buying next, or what’s the next home run stock. Each time I respond with a simple answer, Yourself. Why are we so comfortable handing our hard earned money over to a complete stranger to invest in hopes to get 20% back on it? Even more so, why are we just as comfortable putting that money into the hands of a greedy CEO running a Fortune 500 company? Yet when it comes to putting a $5 or $5000 investment into ourselves we hesitate, second guess, and doubt the choice. If you’re like me it’s extremely hard to take that leap of faith and consider myself as the best investment on the market.
If you stop to think about the pro’s versus the con’s of investing in yourself, it’s a no brainer. Who else would you rather see succeed (except your kids or spouse) then you and your company? Take John Chow for an example; he could have easily put the money he spent launching JohnChow dot com into a bell weather stock in the Dow and more then likely be at a negative return right now. Instead he built a highly successful blog that is yielding huge returns month after month that he would only dream about getting from stocks. Take a look at his blog income report from October and you’ll see he turned $335 dollars into over $34,000 in one month! You don’t have to build a company to invest in yourself and get a high yielding return, there are other ways to invest in you as well. How about going to get your Masters Degree or training for a trade you love. That money will pay itself back many times over not to mention learning a ton along the way. It might even propel your career or give you the confidence to start your own company.
The main point is to stop looking for other people to make money for you; believe in your abilities to get to the next level by investing in Yourself. I’m not saying that having a good retirement isn’t important, in fact I do think you should save and invest, but the next time you look at your 401k or think about taking a risk on a stock, stop and ask yourself is that 20% return going to pay a higher dividend then if I buy a couple hundred shares of me?
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Nice writing. You are on my RSS reader now so I can read more from you down the road.
Allen Taylor
Interesting take there Rachel!! I personally invest in both the stock market, as well as myself. You make many valid points, and I definitely agree with you, but for the most part, I think you have to have a good, unique idea like John Chow did for this to truly work.
I have seen many business startups fail, simply because they were unable to execute, no matter how much money was pumped into them. With some hard work and good ideas, it can be done, but I think that for investing in yourself to truly work, you need that good idea, or a solid plan before anything else! Without that winning idea, you might as well just put your money all on red.
Personally I hate stocks. I invested a lot of money in stocks back in the 90’s and lost it all, never did it again, my kids are my stocks now
Every penny goes into them 
@Webdesi3:
Yea the 90’s was just really bad timing for the most part – same with the current state of affairs, but things will bounce back and if you’re investing in the companies for the long haul, you should come out alright!
The one thing I did learn for the future was to set stop losses, so you can lock in your profits and protect yourself from heavy losses. You just have to have a bit of discipline to stick to them and figure out when/if to buy back in if the stock you love sells off on a stop
More truth than poetry, and I see it all the time. Not just with the stock market, but spending the money on yourself it takes to grow your business in general. I hear people say “Oh, I don’t want a website it just cost too much a month to maintain”. At worst they aren’t willing to spend $20/month on hosting to get the website they need, but will happily by a $5 cup of coffee everyday. It doesn’t make sense not to invest in yourself and your business especially when you look at the other more frivolous things we spend our money on.
Thanks,
Matt
Hi Rachel,
An interesting take on the topic. Kinda goes back to the kind of society that permeates everything – especially this time of year. I truly believe that people should be our focus. Also, how can you take care of others without taking care of yourself first?
Cheers
George
Rachel,
Invest in yourself, great advice. If you don’t believe in you, why would anyone else believe in you. And as far as the success of John Chow, the chances of repeating that success are as likely as repeating the Warren Buffett success, then again, if they can do it why can’t you or I do it!
There are some interesting parallels between Warren Buffett and John Chow, versus the rest of us. That is both offer advice on how to do what they do, but no one wants to follow it. Either they are too lazy, too impatient, or think they have a smarter way. John Chow says be consistent, post often, and blog for a year. But people want it now or don’t want do what it takes. Warren Buffet buys undervalued companies with good management and lots of cash. Few mimic him. Neither offer rocket science, they offer simplicity with work over time. Both have a lot of followers, who read what they have to say, few practice what they offer.
Great advice. Stockes are good when they go up, when theya re falling, there is nothing you can control. you have full control over tyour own abilities, and investing in yourself is good idea!
Can’t agree more. This is exactly what I’m thinking of at the moment.
@BusinessX:
Good points!!! Very true – many are out there just for the instant gratification!! So when am I gonna see a new post on your blog??? I haven’t seen one in a few days BusinessX!!
This is a great pep talk! What better investment than yourself. Really, invest on yourself (dream) and others would too. If you do not; then why would anyone else…..
Hey Rachel, great post! You’re right, your post is very similar to mine in that we’re focusing on how to make “me” better. I’m telling you, the best way to be of help to others is to help yourself. Thanks for stopping by!!
I would agree that in order to be successful in life you need to take the initiative; having a great network of family, colleagues, and of course family helps a ton as well.