What is the best asset to invest in? It's not what you may think!

Why do we invest?

Great question, right? after all we all want to be successful investors for various reasons: being financially independent, retiring early, having enough money in our retirement account, creating generational wealth for our children, and the list goes on.

Investment examples

When we hear the word investment, usually the first things that come to mind are some old-school assets like stocks, bonds, mutual funds, real estate, or the more contemporary ones like bitcoin, altcoins, and cryptocurrencies in general. 

How to measure our investment's success?  

Let's just talk about the very basic measurement of investment: return on investment (ROI). To put it simply, it is the amount of money or rewards you are getting relative to your initial investment. For example, if you invest $100 and you earn $10 then your ROI is 10%. 

Which investment is better?

You may wonder why I wrote, "It's not what you may think!" where so far I talked about the traditional or well-known asset classes. The reason is that I don't think any of them must be the first thing you should think about when talking about investments. 

When Warren Buffet was asked about the best investment, he famously answered: "Invest in yourself. Nobody can take away what you've got in yourself, and everybody has potential they haven't used yet."

I absolutely agree with this, especially with the first part: "Invest in yourself." however, I think what Buffet has intended to say is to invest in your skills and talents which are going to eventually pay off long term. 

What does "Invest in yourself" mean? 

I want to see "Invest in yourself" from another perspective. Yes, we need to work on ourselves every day to attain new skills or improve the existing ones to keep ourselves competitive. But should that be the number one priority?

Priority is a keyword in the world of personal development and investments. When you are trapped in a burning house, your number one priority is saving your and your family's lives. Nobody would think about saving TVs, furniture, or precious assets. The same thing applies to the investment strategy with a very subtle difference:

              Without an imminent threat, intangible conditions are taken for guarantee.
In the above example, you would immediately notice that the precondition of anything in your life from now on is to survive from fire. You don't have your well-being guaranteed anymore because there is an imminent threat. But didn't this precondition always exist? 

What is the most important element in "Yourself"? 

You guessed it! it is your "Well-Being". The very first thing that should come to everyone's mind when thinking about investment, is well-being. Alas that this rarely happens as we are so used to having it for guaranteed that we never think about losing it until we actually do. 

Yes, you should invest in your future, retirement, etc. but those are all only valuable if you have good well-being, so the first and most valuable asset that you can invest in today is your "well-being".

I'm coming from a computer science background and usually like to make a relationship between what I learned in the world of computers and programming with real-life events. Sometimes, I'm bewildered how we humans ignore the same logic and thinking processes that we invented in computer science. (I'll talk more about this in another article.) 

In programming, we have the concept of conditional statements. Typically we describe them with If...Then clauses. For example:

                                            If Health=="Good" Then "take action"

If you give this statement to a computer, it will only take action if the variable "Health" is equal to "Good". I wish we were similarly able to control our thinking and decisions based on some hard-coded logic as well, unfortunately, or some may argue fortunately we can not do it because we are not machines.

Although I agree that humans are different and need to incorporate feelings sometimes, the balance and the importance of logic should not be ignored.  

How can I invest in my well-being?

The reason I introduced, "priority" and "ROI", is because they can help you to understand how you can invest in your well-being. There is no fixed formula for this and may vary from person to person but what I like to do is to have some fundamental statements and questions always sitting in the back of my head.  
  1. What can I do today to help my physical health?
  2. How can I help my mental health today?
  3. If I make this decision, would it impact my well-being? 
  4. Since my well-being is my number one priority, I will/won't take this action.

The answers to these questions are personal and they vary from person to person. However, we can all agree that there is one universal measure of assessment to evaluate the ROI of our investment here, and that is your happiness. The happier you become in your life indicates that your investment in yourself was successful. So to evaluate your well-being's investment, simply ask the following:

                                   Did that decision (investment) make me happier?  

The Wisdom

Do not take your well-being for guaranteed and start investing in it today. It's easy to forget our very fundamental needs when there is no imminent threat to them so prepare for the rainy days wisely. Let's not forget about priorities and learn to remind ourselves every day what is the most important thing we should care about today. Remember that the most expensive car with a broken engine is the most expensive broken car!