The Best Investment You Can Make Isn’t in Your 401(k)

Investing in yourself, through classes, career building, networking and just plain taking care of yourself, can pay off more in the long run than anything else.

(Image credit: praetorianphoto)

I recently spoke with a woman whose company is being acquired, and this has introduced complicated financial decisions and opportunities into her life. Her one concern about working with me is the idea of paying my monthly retainer fee (for her, $150 per month).

I get it: $150 every month isn’t nothing. But if you look at what you are currently spending your money on, how much of it is actually an investment in your most precious asset (you), and how much of it ends up in the “miscellaneous” category?

Women, particularly, don’t invest enough in themselves. And they suffer for it, financially, professionally and personally. I’m not here to be your pop psychologist, or to pitch my services. I want to talk about how to invest in yourself and why.

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Invest in your health

We all have challenges in our lives. Some are short-term, but the important ones usually aren’t. I realized recently if I’m going to continue working for what I want, what I believe in, then I need to replenish myself every day.

For me, that means a morning home yoga practice, regular visits to the chiropractor, getting at least eight hours of sleep every night, and home-cooked dinners.

I fall down on these resolutions on a weekly, and sometimes daily, basis. But they are the standard to which I try to return. (Anyone with a yoga or meditation practice will recognize this constant struggle as “return to the breath” or “return to the mantra.”)

Invest in your happiness

My husband is good at finding ways to invest in his happiness. He’s an avid amateur photographer, regularly writes for his photography blog and regularly works on his photography projects … all while being a stay-at-home dad to our two young kids.

This is something I struggle with, and I think I’m fairly typical for a woman. I feel I should use any “spare” time or money I have on someone else’s behalf. His dedication to self keeps him from being the surly, emotionally depleted wreck that I too often am.

So spend some money. Carve out some time. Do what makes you happy (or don’t do what makes you unhappy). It’s not an indulgence; it’s a necessity.

Invest in your relationships

This is something that my therapist is helping me learn. (I love modern life, where having a therapist is a thing of envy, not derision!) If you are not intentional about each of your relationships, they’ll be neglected.

For me, this has included marriage counseling (I cannot recommend this too highly), hiring a babysitter regularly so I can have an uninterrupted conversation with my husband, and taking every Thursday afternoon off to spend time with my elder daughter.

Invest in your career

This is something I hammer on with my clients: Your financial future is not just a matter of good financial planning. It depends on your professional success, too.

I work primarily with women in the tech industry. They are underrepresented in the higher-paying technical and leadership roles, in company ownership and in founding companies. All of this translates to less money. This community of women needs to take explicit steps to achieve professional success.

I recommend my clients intentionally cultivate a network of people who might support and guide them at every juncture. This doesn’t mean you have to glad-hand strangers at official networking events. You can thoughtfully pick out one person at a time you want to get to know better and take them to lunch.

I also encourage them to spend money on developing career skills instead of saving for retirement. No, this isn’t permission to be frivolous. If you make enough money to do both, then do it. But at age 25 or 35, spending $5,000 on conferences, a degree or classes should bring you far more money in salary over the course of your career than investing that money in your 401(k).

What skills should you develop? Whatever skills your job requires, certainly get better at those. But then there are broader career skills, like public speaking, negotiation or leadership. Take classes; buy books; hire a coach. This is not your momma’s employment landscape. (I mean, except for that pesky, persistent pay gap…)

Invest in your finances

Rule No. 1 in personal finance: Educate yourself. You need to do this regardless of whether you work with a financial professional.

I often recommend to people the following books about financial planning and investing. They’re easy to read, and inexpensive or free:

If you’re not able, willing or interested in staying on top of financial issues that affect you, hire a planner. Maybe it’s a real cost to you. I get that. But this is very much a case of “you can’t afford not to.”

The earlier you get your finances in hand, the longer you reap the benefits. Usually people seek out a financial planner when they’re 55, wondering if they can retire. At that point, it’s a matter of “doing the best we can with what we have” and trying to undo mistakes.

If you start getting control of your finances when you’re in your 20s or 30s, then it’s all about avoiding mistakes and making the most of your opportunities. I love that about working with the early- and mid-career set: There’s so much potential.

Especially for women, this is both a protective act (far too many women cede responsibility for their finances to other people, and then are left in the lurch by a divorce, unscrupulous people or other unfortunate events) and an empowering one: If you understand and control your finances, you will be better able and more confident in taking risks and pursuing your goals.

How are you investing in yourself now? How could you invest more in yourself in the ways I’ve discussed above? Even if you’re still unconvinced that investing in yourself is worth the time and money, what can it cost to try it out for six months? A few hundred dollars? A small price to pay to find out if we can be happier, stronger versions of ourselves.

Meg Bartelt, CFP®, MSFP, is the President of Flow Financial Planning, LLC, a fee-only virtual firm that provides financial guidance to women in tech. She is a member of the XY Planning Network.


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Meg Bartelt, MSFP, CFP®
President, Flow Financial Planning, LLC

Meg Bartelt, CFP®, MSFP, is the president of Flow Financial Planning, LLC, a fee-only virtual firm that provides financial guidance to women in tech. She is a member of the XY Planning Network.