Wealth Planning Insights
Wealth Planning Insights | One of the Best Investments You Can Make? Yourself.
Adam Lawrence, CPA, January 2025
A gym membership and a healthy diet are probably not the first things that come to mind when you consider investments for building wealth. Instead, most people think of stocks and bonds as ways to accomplish their financial goals. However, poor health impacts the ability of many Americans to achieve financial freedom. Smokers, for instance, have been found to have an average net worth 50% lower than non-smokers. Less obvious dangers like physical inactivity are estimated to cost thousands annually in lost productivity.
Rarely does one consider that the extra helping of pizza on game night slowly chips away at our physical health, and by extension, our finances. Obesity, one of the most prevalent health issues in the U.S., can result in significantly higher medical costs each year and a lower quality of life. Prioritizing a balanced diet and staying active, one will not only feel better but will also likely increase their earnings potential over more years, while saving on healthcare costs along the way.
Education is another key area where investing in oneself can pay off in a big way. According to a study by Georgetown University, individuals with an associate’s degree earn almost $500,000 more over their lifetime than those with a high school diploma. The results are even more stark for earning a bachelor’s or master’s degree, which increase lifetime earnings by $1 million and $1.7 million, respectively, over a high school diploma. With the average tuition of an in-state public university currently around $11,000 per year, attaining a bachelor’s degree results in an exponential return over one’s life.
Investing in oneself is often looked at as starting one’s own business. The dilemma here is often how to maintain a balance between the business and securing one’s financial future. Entrepreneurs starting a business should balance contributing to a SEP-IRA with investing more in their business upfront. If the business takes off, the returns could be multitudes of the initial startup costs. If the business fails, maintaining a solid retirement fund ensures one has a good foundation to fall back on.
Whether it’s for your health, education, or small business, investing in yourself could be the best decision you make for your long-term financial well-being.