By Kyle Winkfield
When you hear the word “investment” what’s the first thing that comes to mind? For most, the default definition is the stock market, real estate or one type of financial product or another. Whatever the intended purpose of the investment, most people think of investing as a monetary commitment that must be made today in the hopes of an increase in value in the future.
In his book, Quadrant Living, author and renowned estate planner, Lee Brower asserts that the most valuable assets/investments that a person may possess go beyond those that can be purchased. In fact, most tangible wealth, like money in the bank, real estate, business interests and a prodigious stock market portfolio is a byproduct of what he deems the most important assets/investments a person possesses – one’s time, values, and belief system. Brower believes the most valuable investments that you have are the ones you don’t even realize are investments. Below are a few tangible and intangible investments that almost everyone can take advantage of to help create greater financial security and happiness.
Time: Many people don’t look at time and see it as an investment or asset. However, ask a person whose spouse is dying, what would be the one thing that they would love to have more of, and they will tell you “time.” While time is an asset on a personal level, it is also a critical component to growing investments and wealth. All in all, the more time one has, the better. When assessing time as an asset of limited quantity, consider its inherent value. Time spent efficiently and effectively ensures the creation of deeper value, both monetarily and otherwise. Consider the impact of time on your life and also how it equates to money and the creation of wealth. The best example? The incredible value of uninterrupted interest compounding over time.
Experience: It might sound like a Hallmark card, but your life experiences are investments. Every good and bad in life presents an opportunity for personal growth – an investment in yourself. Those pivotal change points, ah-ha moments are often hidden opportunities that can easily be overlooked. Your abilities are quite often “hidden” investments. In addition to what you’ve already learned or skills that you’ve acquired through past experiences, consider what future experiences might deepen your personal investment value so to speak. Investing more in yourself, perhaps through strengthening existing skill sets or learning new ones, will always increase your inherent value. This can often translate into more external value (income, experience, opportunity). Your life experiences are investments in yourself and once you recognize that you can better hone those investment for greater benefit.
Hobbies: What would you do if money didn’t matter? The late British philosopher Alan Watts made quite a point – what happens when you settle for paycheck over passion? Think about whatever it is that you may love doing – golf maybe? See if becoming a golf instructor in your spare time is an option. An investment in your hobbies and passions sometimes turns fun into paychecks (example: etsy.com), but always turns into happiness.
Old Whole Life Policies w/ Cash Value: Something a lot of parents did “back in the day” was to buy their children whole life insurance policies with a cash value. Many people have these laying around and some of them accrue generous cash value balances over time. Maybe it’s time to take a look at that old policy that you forgot you had, it could be worth something.
Social Security: For most, social security is an “entitlement” and therefore its investment potential is overlooked. How and when one files (timing strategies) are important details for how much one can glean from the social security pot. For example: If your social security benefit at age 66 pays $2,800/month with life expectancy set at 96yrs, this is just like having an investment worth $1,008,000 spent down over a 30 year period. If you choose to begin receiving benefits at age 62 instead, your benefit is lowered to $1,900/month, an investment worth $775,200, spent down over 34 years (if one lives to age 96). What other investments do you have access to that will be guaranteed to increase in value simply by waiting to access it? Social Security isn’t just a pot you’ve paid into, it’s an investment – manage it wisely!
Come to think of it, the American classic by Russell Conwell titled Acres of Diamonds sums this up well. A man who grew frustrated with his believed-to-be unsuccessful life, sold his farm and went in search of riches in diamonds. Shortly thereafter, the new owner of the man’s farm began to discover rock after rock after rock, each one gleaming with light like he’d never before seen – the farm was rich with diamonds. There are multiple morals to this story, but for our purposes, so often the best “investments” are right underneath our nose. You just have to know where to look. And for any help, you can always seek them from industry experts like Mark Varacchi Sentinel Fund Management.
Read the full story here: http://www.temple.edu/about/history/acres-diamonds.