The Most Important Investment of All – (Why I Stopped Saving for Retirement)

Just two weeks ago, on this very blog, I wrote about the massive importance of starting to save early and often. If your goal is to reach financial independence sooner rather than later, there’s nothing you can do that’s even remotely as powerful as a simple increase in your savings rate.

And yet, I have something I have to admit: I stopped putting money into my retirement accounts back in December of 2013.

It’s true. Up to that point, my savings had been on auto-pilot since I was 23 and my Dad convinced me to open an IRA (thanks Dad!). And those consistent contributions have helped me a lot, doing more than anything else to build up my savings.

But 15 months ago I knew I needed to put them on hold.

I had something more important I wanted to invest in.

A different kind of investment

It was high time I started investing in myself and in the life I wanted to live.

For years I had been dreaming of running my own financial planning practice working with people like me, people starting their families, their careers and trying to make the right financial decisions. And for years I had been putting that dream on hold.

Well no more. In December of 2013 I officially decided to take a chance and start this business.

I was excited, but also nervous. Because starting a business from scratch meant I had to do a few things that many people would consider a little unconventional, and some might even say downright risky:

• Go without income – By turning down a “normal job” and starting a business instead, I was intentionally deciding to live for a period of time without an income.
• Stop saving – Because I didn’t have an income, I didn’t have a way to save for the future. All the automated contributions to IRAs, 529 plans, a future house purchase and the like were all turned off.
• Live off savings – In fact, I was actually going to be depleting my savings to pay the start-up costs of my business and to put food on the table until the business was making money.

So just to sum up, I, the guy who just two weeks ago wrote about how your savings rate is BY FAR the single most important part of your investment plan, was intentionally deciding to make my personal savings rate negative.

I was taking FROM my savings, not adding TO it.

And oh yeah, my wife and I had a 1-year-old AND a newborn at the time, both with mouths to be fed and bottoms to be diapered.

A little crazy, right? Maybe.

But…

What the heck was I thinking?

I decided to do all of this for one simple reason: I believed that this was a chance for me and my family to create a life that made us happy.

Specifically, I was investing in my ability to build a business that could do two things for me:

1. Generate all the income I needed to not only provide for my family, but to create our financial independence.
2. Allow for a happier, more independent lifestyle. I could spend my days doing work I loved while having the flexibility to do things like visit the fire station for my son’s birthday on a weekday morning or travel for two weeks to see my parents across the country.

THAT was the return I was looking for, and it wasn’t something that the stock market alone could give me.

If I wanted to get them, I had to invest in myself.

The most important investment you’ll ever make

When we talk about investing, we typically talk about things like contributing to retirement accounts, investing in the stock market, and technical details like asset allocation and diversification.

And those things ARE important. They’re powerful tools that can make it easier to reach your long-term goals.

But that’s not the only way to invest.

Every day you have the opportunity to invest in yourself. To invest a little money, time or energy into something that might give you a chance at living a happier life.

You could invest some money to learn new skills or gain new experience that might help you earn a higher income or pursue a different job.

You could invest some time with people you love, deepening your emotional connections to the world around you and maybe even opening up some new opportunities.

You could invest your energy doing work you love, work that fills your day with meaning and excitement as you strive to make the world a better place.

The possibilities here are endless. The only questions are what you want and what you’re willing to do to get it.

How will you invest in yourself?

Personal finance isn’t about checking off all the right boxes. It isn’t about doing all the “right” things so that you can wake up years down the road and hope that you’re where everyone else wants you to be.

No. Personal finance is about using your money purposefully to build a life that makes you happy. And sometimes that might mean bucking conventional wisdom a little bit in order to pursue something that’s truly meaningful to you.

So as you think about how you want to invest, don’t forget that YOU are a pretty powerful place to put your money. The more effectively you invest in yourself, the more opportunities you’ll have to create whatever kind of life you want.

So tell me, how will you invest in yourself next?