The Last Safe Investment

By Brad Beckstrom

There’s this constant buzz, the stock market is overvalued, a major crash is coming, interest rates are going up, homes are overvalued. If you read all of these headlines, you get the feeling there are no “truly safe” investments. If you’re striving for financial independence, these types of alerts and headlines can really get to you. They used to really bother me. 

Over the past few years I’ve been steadily working on what I call the high quality, low information diet. The 2016 election set me back a bit, but I’m on the road to recovery. The news notifications are off, emails are being rounded up and unsubscribed, I’m getting higher quality news and information on my own terms.

Traditional Investing

If we can free up time, by removing distractions, then we can invest it elsewhere. Let’s start with traditional investing. I used to subscribe to multiple investing e-mail newsletters. I think I even paid for a few of them! I’ve unsubscribed manually, and using a tool called unroll me. Once in awhile they still find me and I marvel at all of the investing advice out there. Everything from, microcap stocks, crypto currencies, precious metals, the list goes on. What I take away from this deluge of information now, is to go in the opposite direction. Instead of expanding into new areas of investing I’ve chosen to vastly simplify my investing strategy, 4 low fee index funds, freeing up even more time for safer investments.

The Safest Investment

The “why” for making all these efforts is to allow me to make the safest investment of all. If you’ve been on an airplane you’ve heard the flight attendants recommendation that you put your oxygen mask on first so that you can assist others. That’s how I look at investing, but I take that one step further because the safest investment you’ll ever make is in yourself.

Even as I write this, it sounds a bit selfish, freeing up all this time, reading, learning, simply to improve your own lot in life. If you dig a bit deeper, you’ll see it’s exactly the opposite. I was recently asked to complete a simple exercise: List five things that are deeply important to you, then rank them. My list contained a lot of what you might expect — family, friends, community etc. The 5th item on my list was health. The purpose of the exercise was to honestly rank these and really drill down into what is most important. By the end of the exercise, I had moved health to the top of the list. Again, using the oxygen analogy, that if I can’t breathe I certainly am not much use to the other passengers in my life.

Once we get this top priority sorted out, we could then break it down a bit.  So we’ve decided to trade this thing called time for an investment in our health and personal growth. Here is why it is safest investment you can make.

The Health Investment

Healthcare costs are spiraling out of control in the US. As you age your health care costs will continue to rise. Even if you have insurance through your employer or Medicare, your personal costs associated with health will continue to rise. In the future, you’ll most likely have to cover more of your own costs and purchase a catastrophic plan. The biggest investment we can make in healthcare is in our own personal health. If you’re really thinking about it, why not start putting health in front of things like work. You also need to reframe your thoughts on health and exercise as something that is valuable to your family even if they don’t see the benefits right now.

The Personal Growth Investment

You can look well put together on the outside but stress, lack of sleep and overwork, could be killing you on the inside. In Japan they have a word for this — “Karoshi” which translates to “overwork death.” You don’t need to quit your job immediately and become a self-improvement junkie, but you do need a plan. What I do advocate is starting simple. Read one book a month and it will change your life. As you read (or listen to) these books you’ll begin to formulate a plan over time. Kick that plan into overdrive by writing down your thoughts.  When you write down your thoughts in a journal or blog, you’re committing them to memory. If you publish a blog or share the journal it gives you added incentive to follow through on your plan.

The Time Investment

It’s pretty hard to improve much of anything if you’re spending nine plus hours in office and over an hour a day commuting. The energy for that daily workout or an hour long walk will be greatly diminished. You’ll find that even if health and learning are your priorities, that three letter word J-O-B will continually push itself to the front of the list, often ahead of family, ahead of everything.

If you’re thinking long-term, you should be saving between 30% and 50% of your income with the goal of becoming financially independent. Financial independence allows you to completely realign your priorities, focusing on the most important things. Improvements in your health and knowledge will give you the time, energy and new ideas to create passive income and live a truly independent lifestyle.

Tim Ferriss dove deep into a lot of these ideas in the Four Hour Workweek.  While I’ve never achieved a four hour work week, I’m very comfortable with a four hour workday. This, combined with no commute, allows me to keep health and growth at the top of the list, versus commuting and working.

Core Principles

Once you’ve committed to these Health, Growth and Time investments, put them down in writing. Make a list of five or six core principles that you can refer back to to keep yourself on track.  For example, if one of my core principles is choosing “experiences over stuff”, I can use that to evaluate any purchase I may want to make. You can simply step back and ask yourself if this action will move you forward, or fit within these core principles. If it will, then you have your answer. Invest in it.


The Frug

Financial Independence through Living Lean, Working Lean, and Traveling Lean

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  1. Great article, Frug. This is such a great reminder, especially in light of the craziness of our health system. I’ve been trying to think about what’s the best return for how I spend my time. This also reminds me of a Warren Buffett quote I just tweeted that said he would trade all of this money to be younger. I definitely sacrificed my health for my job and family responsibilities, and I probably still am. So thanks for the inspiration. I’m going to work-out!

  2. This is so spot-on, thank you Frug!
    When I was in my early twenties, I saw my dad get ill and then die from cancer soon after he retired. That experience taught me the principal that health is wealth, the ultimate wealth. All else follows. You and I chatted about this in Ecuador. It was great to meet you there, and to share ideas about FIRE. My wish for you and your family before all else is Health first!
    Keep up the good work.

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