What is Self-Investment?

We often hear that we should be investing for our futures. And it’s true — investing is vital to building long-term wealth and preparing for retirement. 

But what about investing in yourself? Instead of searching for the next hot stock tip, perhaps we’d all be better off investing more resources in our own lives and self-development. 

This guide will show you how to invest in yourself — and why doing so is worth being high on your priority list. 

What is self-investment? 

Self-investment is the process of investing time, resources and money into enhancing your own life and self-development. 

In practical terms, what does it mean to invest in yourself? Here are just a few examples:

• Going back to school to earn a degree

• Reading nonfiction books to learn about new topics

• Learning new skills

• Earning a certificate that will improve your career prospects

• Maintaining your physical health

• Protecting your mental health

• Taking the time to build a community and social connections

In essence, self-investment is the act of taking deliberate steps to improve your own life. It’s a way to enhance and nurture both your body and mind.

In this case, the term “invest” doesn’t usually refer to money (although it can). In most cases, you will be “investing” your energy, time and attention, rather than your dollars. 

Benefits of investing in yourself

Why should you invest in yourself? The potential benefits of self-investment are diverse and significant: 

• It could help you be happier.

• It could improve your physical and mental health.

• It could help you make more money or further your career.

• It could set a good example for your children and loved ones.

• It could make your life more fulfilling in general.

And just like investing in the stock market, investing in yourself has compounding effects. This essentially means that your improvements build on themselves and accelerate over time.

For instance, if you start exercising more, you are likely to have more energy — which can make it easier to continue exercising. If you commit to learning a new topic, studying will get easier as you get past the initial friction and overwhelm. 

How to invest in yourself

Self-investment looks different for everyone simply because we all have our own unique goals and challenges in life. 

For precisely this reason, it’s wise to come up with a customized plan for how best to utilize your resources. 

Here is a six-step process to get you started:  

1. Think about your life goals, priorities, values and challenges. Make a list to get everything out of your head and onto paper.

2. Come up with a few areas of life you want to focus on. This could be your finances, your knowledge, your health, your relationships or something as specific as your tennis backhand. 

3. Set goals and make a plan for how you want to improve these focus areas. Use the SMART Goals framework (Smart, Measurable, Achievable, Relevant and Time Bound) to get specific.

4. Find time in your schedule to work on these new focus areas. If you have limited free time, it may be helpful to focus on just one area at a time.

5. Commit to spending a specific number of hours per week on these new focus areas. You could also choose to assign other goals that aren’t based on time (i.e., read 50 pages per week or lose three pounds per month).

6. Journal or take notes to track your progress and record any insights you gain. 

Example of self-investment

For example, let’s say that your life goals are to lose 40 pounds, to learn the piano and to eventually retire early. You decide to focus on these three areas of your life. 

You would then sit down and make a plan for each area, which might look something like this:

• Meal prepping all meals twice per week, on Wednesday and Sunday nights. Commit to hitting 10,000 steps per day, rain or shine.

• Practice piano four times per week, on Mondays, Wednesdays, Saturdays and Sundays for at least 30 minutes per day.

• Pay off student loans in the next 18 months by making an additional payment of $250 each month. Make a budget and stick to it diligentlyrigidly for the next 18 months. Invest any bonuses or extra money. 

• Contribute to your 401k

Related: 7 ways to crush your financial goals this year

This is merely an example — your self-development journey will almost certainly look different from someone else's. 

Tips for your self-investment journey

Start with life areas that have compounding benefits. For example, starting an exercise habit can help you lose weight, improve your sleep and even make you more productive (among many other benefits). All of these benefits essentially build on themselves and make it easier to have more focus and energy to make improvements elsewhere in your life. 

Find a community. Whatever you’re interested in — knitting, running, macroeconomics — there is surely an online community, subreddit or forum that you could explore for inspiration and support. Better yet, try to find a friend or family member who has similar goals and be accountability partners for each other. 

Find your “why.” So you want to lose weight or you want to study coding. Why, though? If you don’t find the true reason behind your desires and goals, it will be harder to reach them. 

Multitask. In many cases, you can work on multiple areas of your life at the same time. For instance, you could join a pickleball club to increase physical activity and build a community at the same time. Or you could listen to educational audiobooks while meal-prepping for your family. 

Make room for fun. Self-improvement can at times feel like a bit of a bummer — nobody likes swapping salad for pizza or reading about history instead of watching Netflix. But in most cases, you can find a way to have fun in your chosen life areas. For instance, you could join a recreational soccer team instead of mindlessly running on the treadmill. 

Is improving your financial situation one of your chosen focus areas? If so, making debt payoff a top priority is an excellent way to reach your financial goals — and Tally† may be able to help. Tally is a tool that may help qualifying Americans get out of credit card debt faster. 

†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. Based on your credit history, the APR (which is the same as your interest rate) will be between 7.90% - 29.99% per year. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.