With stocks looking pricey and rates coming down, investors are wondering where they can put their money for the best returns.
One place to turn for advice is Warren Buffett, the 94-year-old multi-billionaire and veteran investor who has beaten the market for decades.
In a recent interview, Buffett shared his view on where to invest: yourself.
“You can have all kinds of inflationary threats to your investments, and so on. But your main asset is yourself.”
Here’s what you can do to increase the value of that main asset:
1. Investing in yourself
Buffett’s “main advice” has remained consistent over the years.
“The best inflation hedge that you can have is to be very good at something that doesn’t go out of style that people are going to pay for.”
Back in the late 1970s, Buffett said investing in yourself was “the best investment you can make” and suggested that working on improving your own talents is “the best way for people to maintain their purchasing power over the years.”
More than 40 years later, he’s still making that claim. Buffett believes that if you’re good at your job, it doesn’t matter what the value of the dollar is or how high inflation gets, you’ll still command the same amount of purchasing power for “the things that people need you to do.”
Improving yourself and your skills allows you to avoid having to rely solely on market investments to maintain and build wealth.
“Nobody can take away from you the talent that you have,” Buffett tells investors. “And the good thing is, there’s no capital gains tax on that.”
2. Monetizing your ability
As of 2024, the average American stock trader is in their mid-20s to early-30s and has spent about nine years in the market.
If you find yourself in this age group — or even a little older — and are looking for ways to invest in yourself, there are plenty of ways to do it.
For example, think about something you enjoy, then develop that skill set. For example, if you know how to play guitar, improve your skills and become a guitar tutor. If you’re highly educated and specialized use those special skills and knowledge to educate others. Maybe you could even harness AI and write a book.
Most people know something that other people would pay to learn.
3. Additional ways to invest in yourself
Join professional organizations and attend events for people in your profession.
Interacting and networking with others is a great way to meet new people, learn new things and earn more money.
Also, consider additional training. Many companies pay for training, Coursera courses, etc. to educate employees. It never hurts to ask.
Consider asking your employer to cover the cost of a seminar where you can network with other professionals in your field or related fields.
In addition to expanding your skills in your existing field, there are endless ways to learn new things that could ultimately pay off. Studying financial markets, real estate and investing, for example.
Bottom line? The best investment you can ever make is in yourself. Get educated. Become more informed. Learn new skills, especially the kind that could pay off one day.
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