“Investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the future.” – Anonymous
An asset is something that has or provides a certain type of value and that value can come in many different ways. With regards to finances, it’s about monetary value. When you think about investing in assets and getting a return on those assets, I believe few people ever think of themselves in that way. As an asset!
I’m not referring to investing in yourself, which generally means investing in the various ways of improving yourself mentally, physically or other wise. Although those are ways to add value to yourself, that’s a subject for another day. It’s the monetary value that you provide to yourself through the work you do everyday that I’m talking about.
It Starts with Deciding What You’re Worth
What I’m referring to is more about thinking of yourself as if you (your physical self) were an asset that you would expect to gain a monetary return from. If you invest your money (or time) into a business and the business is producing an income, you would hopefully expect to get a return from that investment, wouldn’t you? I’d like to think so. Just like any stakeholder would expect to get a return on their investment.
Well…what if you think of yourself as that business. As a stakeholder of that business, shouldn’t you expect a return on your investment? Wouldn’t you expect a return on you? I would…and I do! It’s really just a different way of thinking about paying yourself first. The return on your investment should be paid out to you before anyone else gets paid!
“Your greatest asset is your earning ability. Your greatest resource is your time.” – Brian Tracy
Even if you’re employed by someone else, you’re actually still in business for yourself. And to get a rate of return from your business should be expected. For those of you who may be self employed, this thought might make sense, but for most of the people who are employed by someone else, you may have a difficult time realizing the concept.
When you’re employed by someone else, you put your time in, day in and day out to do your job for your employer and your employer compensates you for your time in the form of a paycheck. Let’s look at it this way…your employer is in the business of XYZ, but you are in the business of Y-O-U. So, your paycheck is the income of your business.
In the business of Y-O-U, the compensation received from the employer (the paycheck) is the earnings the business of Y-O-U receives for the services you provided to the employer. From that compensation (or earnings), is where you should expect to get your return from. This would be the ROI or return on investment for your business.
That return is what I like to consider as being the Return On Youor ROY! That return can be whatever you want it to be, 1%, 10%, 20%. No matter what the percentage is, you should strive to get a return just like you would from any other investment. This concept plays into the ever-important strategy of paying yourself first!
“You will come to know that what appears today to be a sacrifice will prove to be the greatest investment that you will ever make.” – Gordon B. Hinkley
Paying yourself first plays a very crucial part in your journey to financial well-being. It’s about thinking of yourself as an investment and setting yourself up to gain a return on that investment. It’s making sure you pay dividends to yourself for what was earned. No one is going to do that for you, it’s a decision you have to make for yourself.
The thing to always remember is that the best asset you have is your very own self. This is where it all starts. It starts with YOU…your first investment. If you don’t take care of and manage your first investment properly, then no other investments will be possible. That means you can’t and won’t be able to acquire any other investments without starting with you!
Managing your investments and assets are a very important part of your financial well-being and wealth building as you go through your journey. What most people don’t realize is that you’ll never be able to managing a portfolio of investments until you can learn to manage your first investment, which is you.
So, what better way to start, than to start with your most immediate asset…yourself! See yourself as a valuable asset that can produce a monetary return. Decide what you want that return to be and start paying yourself first. Once you’re able to do that, you’ll have a great start on your journey to financial freedom!
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