Invest in Yourself for the Greatest Return

A Penny Saved is More than a Penny Earned!

A Penny Saved is More than a Penny Earned!

I have been considering investing in government bonds. I would like to diversify my investments and government bonds are completely risk free. New Zealand and Australia both have relatively high interest rates, so bonds can pay as much as 5 or 6 percent per year. The problem is that 20 percent of the interest income will be deducted for taxes and with other exchange rate risks and fees, it is likely that I would make less than 3 percent. This is comparable to what US government bonds are currently paying.

Therefore, if I invest $100,000, I will make $3000 per year or $250 per month. $250 per month on $100,000 tied up for at least a year. So basically that means, making an extra $250 per month is equivalent to having $100,000 in bonds. In order to make an extra $2500 in passive income, you would need to be the government bond equivalent of a millionaire. A million dollars in bonds would only provide you with $2500 a month of income.

How about looking at this from a different perspective. Every $250 you could save in your current living expenses would be the equivalent of having $100,000 in government bonds. Let’s say you currently make $3000 per month in take home pay. If you are saving $500 per month now, and you increase your savings by an extra $250 to make a total of $750, you have increased your monthly savings by 50%. If you could cut back your expenses $500 per month, you could actually double your monthly savings, a 100% increase. The equivalent of having $400,000 in government bonds. ($400,000 X 3 % = $12,000 per year or $1,000 per month.)

Just for fun, look at it another way. What if you could find an extra $250 of income. Remember an extra $250 is like having $100,000 in government bonds. Can you find ways to add some passive, recurring income with minimum time and upfront investment? I don’t think it is so hard and I am currently working on a few ideas myself.

One of my passive income ideas is a website of PDF downloads for English teachers.

Time investment: 200 hours. (For the creation of the downloads and setting up the website)
Money Investment: $3000. (For artwork and design)

If I value my time at $20 per hour (200 X $20 = $4000), the total investment will be $7000. (Plus a nominal amount of time every month for marketing, admin etc.) $7000 invested at 3% per year will yield $210 profit per year. This is only $17.50 per month. So if I can generate more than $17.50 per month in ongoing income, I am better off than investing in government bonds.

Of course, learning how to make money online also has its own benefits. I will certainly learn more and make more money over time if I invest in myself. Undoubtedly, I will make far more than 3% per month by investing in myself. Forget the bonds, build yourself a business!

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My name is John Bardos. My wife and I gave up our business, house and possessions in Japan to search for more meaning and fulfillment in our lives. We've discovered that a satisfying life is about rich experiences, quality relationships and meaningful contribution, NOT consumption.

One Response to Invest in Yourself for the Greatest Return

  1. Neil says:

    Yes, all good points. And there are other benefits that are difficult to calculate at the outset. By investing in yourself, you become more marketable by way of reputation and experience, which is likely to lead to further opportunities and the potential for increased revenue in the future.

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