You have 15 mins a day to invest in yourself. What is the best way to spend them?

I often write on Quora.com, where I am the most viewed writer on financial matters, with over 275.1 million views in recent years.

In the answers below I focused on the following topics and issues:

  • Let’s say that you have 15 mins a day to invest in yourself. What is the best way to spend them? Invest in yourself, your network or financial assets, or a combination of the three?
  • How can people stop worrying about money so much? Is it even realistic in the world we live in?
  • Is saving ever any better than investing? I look at the evidence.
  • What lessons can we all learn from the Nasdaq’s performance in the last 21 years since the bursting of the “bubble” in 2020? The index is up 300% or so, but fell by 76% in the early 2000s, 50% in 2008 and about 25% in 2020. What can be learned from these fluctuations.

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If you want me to answer any questions on Quora or YouTube, or you are looking to invest, don’t hesitate to contact me, email (advice@adamfayed.com) or use the WhatsApp function below

You have 15 mins a day to invest in yourself. What is the best way to spend them?

It depends on where you are in life. Let’s say you are already in your mid 20s or later, and especially if you are already successful, it tends to be better to improve your strengths.

So, for example, if you are a social media star who is earning $1million+ on one of these online channels, it makes sense to keep perfecting your craft.

Working on weaknesses will never be as important as doubling down on strengths, after a certain point.

Beyond that I would try

  1. Any courses which improve your communication. That could be the local toastmaster as one example of many. Buffett once said that one of the best investments he ever made was in a Dale Carnegie course. A second bet would be negotiation, especially if you are a salaried employee, but for everybody. Think about it. Asking for a pay rise can take seconds. If you do it appropriately and you succeed, you can make a lot from a few moments of effort.

2. Networking. Most networking is pointless. A Harvard study showed 99% is pointless, in fact.

However, if you can find an event which is monthly, you could benefit from it tremendously. The best bets are to follow your hobbies. Are you into sport, like golf?

In which case, play golf for fun. If something comes out of it in terms of pay rises and business, then fine.

3. Health

Your health is your wealth. Unfortunately, it is partly out of our control, but we can dramatically increase our chances of being healthy and productive if we make the right choices.

That includes our mental health, which indirectly means investing in relationships.

4. Personal development

This is linked to the first point. For others, it could mean learning languages.

For others, it could be something else, like professional qualifications if they are useful in your industry.

5. Read

Some of the smartest, wealthiest and for that matter the happiest people in the world read for hours.

The world is always changing. Keep on top of it. It is best to focus on the most important things, like:

  • Health, which is indirectly your wealth.
  • Wealth, as it will also help with reducing anxiety.
  • Communication and negotiation as mentioned above
  • Your personal hobbies.
  • Your core business/job.
  • Anything which helps with your own happiness.

Audible and e-books are a good alternative for people who don’t like to read.

I would also focus on things which don’t take up much time once you have set them up.

So, I mentioned negotiation. It doesn’t take a long time to learn the basics and then sometimes apply the key points.

Another one is investing. It can take you 20–60 minutes to set up a direct debit, and then that is often it if you buy, hold and forget.

How can I stop worrying about money so much?

Did most of the business owners you know worry about a black swan event like a lockdown in 2018 or 2019?

I imagine not.

Do most of the people you know worry about overspending on that aily coffee?

Most people don’t.

Yet, how many people do you know who worry about investing money?

Probably most people worry despite investing not being, in most situations, a black swan event, and because many have poor financial literacy.

The reason I make this point is that people’s emotions aren’t rational. It is rational to worry about losing it all, no matter how unlikely.

It isn’t as rational to worry about losing a small percentage of money in say business, especially if you don’t worry about overspending!

So, perhaps the key isn’t to stop worrying about money entirely. The key is more likely to be to start worrying about only those risks, no matter how unlikely, that could wipe you out.

If people start saving, and especially investing, more they are reducing their black swan risks if something like COVID-19 happens again, or there is another recession.

Naturally, people worry less when they are more financially secure. People who just spend as they go along, always worry.

I know several people who are earning 10x more than they did after graduating, who still worry about money!

The reason is simple enough to understand. Every pay rise is met with a new, bigger, car, mortgage and other goods.

They worry about keeping up with the Jones’, and therefore also money, considering they don’t have much.

A more minimalist lifestyle gives you less to worry about, compared to worrying about whether the home improvements will be done in time for your holiday!

For others, being sensible with money isn’t the problem – the issue is a low income.

In this case, if you are struggling as most of us have at some point in the past, it gets harder not to think about money all the time.

A certain level of security acquired through wealth + only worrying about the right problems can help a lot.

Is rigorous saving just as good as investing at this point?

Below is a graph of the interest rates on offer in 2021. Banks typically pay these amounts or slightly less:

You will notice a commonality – interest rates are either close to 0% everywhere, or they are higher, in exchange for taking huge currency and inflation risks.

Getting paid 6% per year in some emerging market, or even mid-income country, is much riskier than just investing in ETFs for decades.

If you invest and markets fall, that isn’t a big deal. You can just wait it out. Markets have always recovered.

Nobody has ever lost money by buying the entire market and holding it for decades.

In comparison, I personally know people who have lost money in the bank, indirectly to inflation and currency falls.

People just sometimes feel more reassured as the name “bank” and “fixed deposit” sounds safe, as too many confuse volatility and stability.

So, the answer is no, as some other people have pointed out below.

However, if we look at the question in a broader, there are certain situations where how much you save matters more than total investment returns.

Numerous studies have been done on the correlation between wealth at say 65 and many variables.

How much you invest, and for how long, is often the biggest two variables. This might sound obvious, but it is even more important than total percentage investment returns.

Think about something for a moment. Let’s say you invest $1,000, and it doubles.

That is still only $2,000. In comparison, if you have $100,000, and it doubles, that is $100,000.

We all also know about the importance of compounded investment returns.

I am not saying that returns don’t matter, of course they do,but simple maths say how much you save to begin with, and for how long, makes the biggest difference.

Let’s give a simple example. Let’s say Andy invests $200 a month for 25 years and gets 13% per year, which is 3% more than the S&P500 has historically given and better than most investors.

In fact, it would put him inside the top 1%-2%. He would have $422,040.24 in 25 years.

Not let’s say Graham invests $500 a month for 38 years and gets 9%, which is 1% below the average the S&P500 has produced historically.

He would have $1,848,398.78. Stefan, in comparison, invests $500 a month, but for 40 years and adds $100,000 in the early years of the account.

He gets just 8.5% per year. His total wealth? $4,538,194.87! One of the easiest ways to leverage wealth, therefore, is to extend your investment time horizon.

It lowers risks and increases your expected total returns.

What lessons can we learn from the dot com bubble bursting in the early 2000s?

The biggest ones are

  1. Don’t get too excited by over performance. In the 1990s, there were many stock pickers who beat the market. Many got delusional and thought it would last forever. I once met an American man who admitted that, looking back, he didn’t know much about stocks, yet he beat the market for about ten years. In the 2000s, he did worst than the market, which was already down! Many people who invested in Tesla et al. no doubt haven’t learned that lesson.
  2. Don’t panic. Imagine you had bought the Nasdaq at the very height of the bubble. You would have been down about 76% from 2000 until 2002, another 50% in 2008 and about 25%-30% in 2020. There would have also been many mini corrections. Yet, guess what, you would now be up about 300%!
  3. Capital gains aren’t everything. The Nasdaq has run rings around the S&P500 since the 1990s. It has beaten the S&P500, but not as much as the chart below implies, as they aren’t factoring in dividends

4. Don’t follow trends. When did most people want to buy the Nasdaq? 1998 and 1999 and since 2016. When did most people want to sell it? Sometimes between 2000–2014.

At the same time, when did people want to buy emerging markets? During the 2000s. When did most people want to sell? In more recent times when the performance has been bad.

5. Stay patient. The Nasdaq was completely stagnant from 2000 until 2014. The S&P500 and Dow were from 65 to 82. That doesn’t mean you shouldn’t have bought.

To the contrary, a period of stagnation allows you to buy more cheaply. Which stock markets have done best this year, and last? Typically, “unfashionable” one’s like some mainland European ones, which have hit record highs recently.

I am not implying you should only buy unfashionable stock markets. The US indexes are some of the most tried and tested in the world.

They are also less risky in some ways as they are global, with many firms doing IPOs from all around the world.

The point is, merely don’t be worried if your account is going up for years or even a decade.

6. Asset allocation keys

Bonds are boring. They didn’t pay as much in 2000 or 2001 as they did in the 1970s or 1980s.

These days, the difference between expected bond and stock returns is even higher.

Yet an investor who rebalanced during the 2000, 20008 and 2020 period lowered their risk a lot.

The key commonality? Control your emotions when investing, by being long-term

Pained by financial indecision? Want to invest with Adam?

Financial Planner - Adam Fayed

Adam is an internationally recognised author on financial matters, with over 275.1 million answers views on Quora.com and a widely sold book on Amazon

Further Reading 

In the article below, taken directly from my online Quora answers, I spoke about the following issues and subjects:

  • Can you live abroad comfortably from dividends and having an online business?
  • Why do people want to emigrate to Singapore despite high living costs? Is it a good place for expats to live?
  • What are some of the easiest places for a US citizen to emigrate to permanently? I speak about the numerous routes available.

To read more click on the link below.

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