In this episode, we discuss the importance of investing in yourself.
Full Transcript
Hi Everyone, welcome to the You’re Daily Cup of Joe Podcast, with your host Joe Bautista, where my goal is to give you quick lessons on how to grow yourself physically, mentally, emotionally, and spiritually so you can have better careers, better relationships, and better personal finances.
I’m also the author of the book “More You Know, More You Grow: How to Get Better Every Day”. In this book, I wrote down over 30 tips to help you grow in those four cornerstones.
In today’s episode we’re going to talk about the best investment you can make, which is in yourself. If you truly want to have a better life, the thing is, you have to start investing in yourself. Your personal development is going to take you to where you want to go in life. In finance, there is a formula called the rule of 72 where you take 72 and divide it by your average rate of return and the number you get tells you how many years it will take for your investment to double in size.
So if you’re getting a rate of return of two percent, that means that investment will double in size, every 36 years since 72 divided by 2 is 36. If you’re getting a rate of return of 8, that means your money is doubling every 9 years. For most people, they want to have their investment to double every 9 years, but these things depend on other factors on which one you should choose.
But this rule of 72 concepts can be applied to our own lives. If you don’t invest in yourself, that’s kind of getting a rate of return of two percent. So if you’re 20 years old, your human capital won’t double in size until your 56 years old and that might be too late.
If you’re 20 years and have a rate of return of 8 percent, your human capital will double in size by the time you’re 29 years old. This person with an 8 percent rate of return will have the opportunity to double four times by the time they reach 56 while the person with a two percent rate of return can only double once.
These are all hypothetical but we can see people who invest in their bodies, their minds, their emotional self, and spiritual self and see why they are so much more successful than the person that doesn’t.
Another thing you have to consider is that a 9 percent rate of return is the average over that 36 year period, so you have to constantly be putting time and energy into growing yourself as an individual if you want to double in size every 9 years.
And it has to be a balanced portfolio too. You just can’t spend all your time with your mental and physical self and neglect your emotional and spiritual self because you will only get a rate of return of 5% which would double every 14.4 years. It is still good but we can do better as individuals.
It doesn’t take much to build up your scores, but it will require to do the more difficult tasks than doing the easy stuff. Like not watching excessive television and reading more. Or removing toxic people from your life. You might need to have a difficult conversation with someone but it’s going to be required if you want to have a higher return.
You decide what you want out of life and then you go get it. If you want to be like Jeff Bezos or Oprah, you have to put in the work that they do and deal with the consequences of fame. That’s one percent of one percent of one percent there. So there will be many sacrifices that you will need to make if you want their rate of return. You might be satisfied with less and that’s okay, it’s your choice, just don’t complain about things not working out for you and don’t let others make you feel bad for the choice that you made.
If you’re worried about what you have, you got to look at yourself and see if you getting the right rate of return to get the life that you want. Plus if you’re looking to make more money, the best way to generate wealth is to be more valuable as a person that gets jobs that pay a decent salary. You have to figure what the number is for yourself but it is the choice you need to make for yourself.
To get the life I want to have, I know that the best investment I can make is to invest in myself. This will create much more wealth for myself and investing in my 401k could ever get me but it’s a lot of work and I’m willing to make those sacrifices. Right now, I pretty much work every single day trying to get my Grow With Joe Business off the ground because it will give me the lifestyle I want. I want to have the ability to work from home so that I can work out and spend time with family and not be stuck in traffic which would take a toll on my health. Plus it would generate the wealth that I want so I can start my endowment fund which would help others.
I want to create opportunities for others so that they can succeed. I grew up with two blue-collar workers, mom was a cashier, and my dad, an immigrant from Mexico, worked in the fields. They provided me great opportunities, but I needed to join the Marines in order to take my life to the next life. Plus when I went to DC, I saw what opportunities people had and I wanted to provide the same to others to grow.
I start investing in yourself, you have to believe that you can grow, if you have a fixed or victim mindset, then you won’t be able to invest in yourself, because you’re going to think what is the point, it’s not going to do anything but investing takes time and for you to follow the process. If you don’t have the patience or are not following the process, then you’re not going to get a high rate of return.
When you invest in yourself, you need to follow the same principles as investing. Don’t switch from thing to thing because there are transaction costs that will eat into your return. When you assume more risk, you’re seeking a bigger reward. Then investments run their full course and don’t pull out from the bottom. Understand what you’re investing in. Have some diversification in your investment in yourself so that you can have some downside protection when the main investment is not doing so well.
You can make a bad investment in yourself if you decide to do something like underwater basket weaving. There is probably not much demand for it but I guess if you’re okay with not make much money and you enjoy go ahead and do it. Just don’t complain that you don’t have enough life.
To summarize today’s episode, remember the best investment that you can make is in yourself. So have a strategy and a plan to help you reach your investment goals in yourself and you’ll be more likely to reach that goal.
Thanks for listening to today’s episode.
To get a free copy of my book “More You Know, More You Grow: How to get better every day” just go to my website growwithjoe.me/book and just pay for shipping and handling.
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Thanks for joining me today and remember if you go with Joe, you can grow with Joe, cause Joe knows Dough.
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