What’s the best investment?

Today’s question comes from Elijah. He asks:

“Best investment?”

Squirrel pelts. Definitely squirrel pelts. Okay, this is a bad question, so first I’m going to teach you how to ask a good one: Provide some background, list two or three options you’re considering, and the one you’re leaning towards. Here, let me show you what a good question looks like.

“Hey Chris, I’m 25 years old and I want to start investing. I’ve paid off all my credit card debt, and now I have $500 a month to invest. After doing some research, I’m considering a robo-advisor like Betterment or Vanguard. I’m leaning towards Vanguard to keep fees low, but it’s all so confusing.”

This question I can answer. But I’m still going to answer your question about the best investment. And you already own it, because it’s you.

Yes, cliche, but let me explain.

You probably think about your job as a way to earn money, which you then use to pay your bills and have a little fun. Maybe you even have enough to invest for retirement because you know if you don’t then you have to work until you’re so old and sick that you can’t work anymore.

So why is investing so important? It’s because when you invest in things like stocks, they become more valuable over time. We can apply this same thinking to ourselves. When you invest in yourself you become more valuable.

I don’t know why personal finance writers don’t like to talk about this. Instead they talk about how you should clip coupons to save $0.25 on aluminum foil, or if you book a flight with two stops instead of flying direct you can save $47.

Yes, we should all be aware of ways to save money, but one of the best shortcuts to wealth is making yourself more valuable.

I just read Cal Newport’s book So Good They Can’t Ignore You (and I highly recommend it). He talks about how when you start your career you’re at the bottom, and then it’s up to you to increase your value. You do this by continuing to build a more specialized skill set, or as he calls it, career capital.

Career capital is how you gain more control over your life. When you’ve built enough of it you start to have options. You can negotiate for more pay, to work from home, maybe even to work only when you want.

Is building career capital easy? No. If it was, everyone would just copy and paste something into a Word document and then it’d be Coronas-on-the-beach time. Some people never even try because they might be afraid to fail, or to look stupid, or they feel pressured from their co-workers to stay average.

Like everyone else, my career started at the bottom (it was in IT). I didn’t really know shit, and I got paid like someone who didn’t. For years I worked hard, I built career capital, and the money followed. But then I discovered I’d gone about as far as I could doing what I was doing.

If I didn’t want to stay stagnant I had to build career capital in a different area, and that was leadership. So, I joined Toastmasters, I read self-help books by people like Dale Carnegie and Stephen Covey, and I got mentors to help guide me.

It wasn’t long before it paid off because I was offered an opportunity to become a tech consultant which was a position that I’d become a really good fit for.

Remember, no one is going to force you to invest in yourself. It’s something you need to take responsibility for on your own. But the more you do it, the more valuable you’ll become. And when you do that long enough I’ll see you at the beach.