If you get to prioritize one investment today, what would it be? For many of us, the answer might be starting a business, buying a home, or investing in the stock market. While those actions are important to building wealth, the energy you spend improving yourself can provide far greater returns for you and those around you.
According to Warren Buffett, one of the most successful investors of all time, the best investment you can make is in yourself. And he’s right. Research links longevity and overall well-being to healthy habits like exercising regularly, eating well, getting enough sleep, maintaining social relationships, and having a purpose that brings you joy and gives your life meaning.
As you focus on improving yourself, those habits can translate to other areas of your life, including your financial well-being.
Here are seven practical tips to jumpstart your self-improvement journey.
Find balance
When it comes to work-life balance, numerous studies show that working long hours doesn’t amount to more productivity. In fact, it could be counterproductive. Consider a study from Stanford University, which discovered that after 55 hours of work, the net benefits of working additional hours are essentially null.
Apart from being more efficient, appropriately distributing our time and energy among work, personal life, and relationships can lower anxiety levels, fatigue, and sleep disruption, while improving our physical and mental health.
In the context of financial investing, finding balance is also critical. By maintaining a balanced portfolio with multiple assets, such as stocks, bonds, and real estate, investors can minimize potential losses and increase the likelihood of long-term gains.
Set boundaries
Creating a balanced and fulfilling life requires awareness of our needs and priorities and effectively communicating them to others. Setting boundaries is not about being selfish or rigid. Instead, by valuing our time, energy, and emotions, we show respect for ourselves and others – whether at work, in relationships or other areas of our life.
Doing so also opens the door to mutual understanding, better communication and healthier relationships. Boundaries can also make us feel more secure and empowered.
Setting boundaries also applies to investing. For example, by establishing clear financial goals and risk parameters, investors can make intentional, sound choices, removing impulsive decisions from the equation.
Develop healthy habits
The key to exercising regularly, being more productive, achieving financial success, and attaining any other goal begins by recognizing our habits. In the book “The Power of Habit,” author Charles Duhigg explains how even one small behavioral change can have a ripple effect on other areas of our lives.
Habits are the building blocks of behavior driving our decisions and motivations, according to Duhigg. As a result, by understanding the science of habit formation (cues, routines, and rewards), we can follow that formula to transform our lives and achieve our objectives.
In financial investing, like in our daily lives, habits play a significant role. For example, consistently investing, or dollar cost averaging, in a diversified portfolio and sticking to a long-term strategy can lead to more successful outcomes.
Define your goals
Whether you desire to get in physical shape to run a marathon or get in financial shape to pay off your mortgage, having specific goals can provide a roadmap for where you want to go.
Experts suggest beginning with the desired result and then working backward from there to define measurable and realistic actions you can take to reach those goals.
For example, paying off a 30-year mortgage early could involve recasting your mortgage annually. Through this approach, you lower your monthly payments and save thousands of dollars in interest, which you can use towards another recast.
The key is to monitor your progress and fine-tune your strategy as needed. In financial investing, for example, defining and articulating your vision helps you create a customized plan that aligns with your objectives, time horizon and risk tolerance.
Invest in community
Society and our connections to others are critical in shaping who we are and who we become. Whether you volunteer in your neighborhood or participate in a professional network, staying connected and engaged with your community allows you to learn from others, gain new perspectives and develop a greater appreciation for the value everyone brings to the table.
Social connections also provide emotional support, which is essential for mental health and well-being. Beyond having a sense of belonging, maintaining strong social networks could affect longevity.
When it comes to financial matters, your community can be an essential source of information about new investment opportunities, financial lessons, and insights. In summary, don’t discount the power of knowledge sharing and community.
Get a mentor
Developing a relationship with a mentor is essential for anyone looking to grow and succeed. This concept applies just as much to financial investing as to any other field.
A good mentor can offer guidance, share valuable insights, and help you navigate the challenges and opportunities of investing in financial markets and other areas of your life.
Like any other relationship, mentorship isn’t a one-way street. Instead, seek opportunities to foster trust, exchange ideas and experiences and maximize your time together.
When it comes to investing, growing your money can be complex without the time, knowledge, or resources. By partnering with an investment advisor who looks after your financial needs, you can gain the support you need to reach financial stability and security. Use Bankrate’s free matching tool to find a financial advisor for you.
Celebrate your wins
We are often so focused on what’s coming next that we forget to pause and celebrate our accomplishments whether big or small. Celebrating our wins allows us to gain perspective and appreciation for each day, approaching every moment as a new learning opportunity.
By acknowledging where we’ve been, where we are and where we’re going, we embrace the flow of life. With appreciation also comes wisdom — the wisdom to identify what matters the most: health, family and community.
Ultimately, recognizing and appreciating our progress motivates us to continue charting the path toward reaching our goals, both personal and financial.
