If you?re fortunate enough to find yourself with a leftover discretionary fund, you may be stumped on how best to spend it. Stocks? Bonds? Mutual funds? While there are benefits to investing in the stock market, let?s not overlook some other smart, alternative investments that are sure to offer sound returns in life.
Financial Freedom
Investing in your financial freedom ? by paying off debt and building personal savings ? guarantees a better night?s sleep (not to mention, financial security). Experts agree that paying off debt is one of the smartest investments you can make because once you?re free of financial obligations, you can more easily grow wealth. If you find yourself with a windfall like an inheritance, raise, or bonus ? or even if you choose to work a second job for this exact purpose ? it makes financial sense to prioritize debt first, then put any extra toward retirement.
Self-Development
While there?s an ongoing debate about the ?value? of a college degree, one thing?s for sure ? the more talented, educated and skilled you are, the higher your chances of employment and better pay. Now, for those of us already out of college, this doesn?t mean going back for a Masters or PhD, sometimes just learning a second language (hello, Rosetta Stone!) or taking an evening course can enrich our careers and life. In fact,?experts say this is one way the rich in this country stay rich. They invest in self-development. It?s a fabulous long-term investment financially and also emotionally.
Travel
While having oodles of money doesn?t necessarily equate to happiness, one type of spending has been proven to lead to bigger smiles. ?Thomas DeLeire, an associate professor of public affairs, population, health and economics at the?University of Wisconsin?in Madison, examined?nine major categories of consumption?and found leisure spending was the only one linked to happiness.
DeLeire?s research shows that?a $10,000 increase in spending on leisure goods is associated with a 0.17-point increase in life satisfaction. A $20,000 increase in leisure spending is ?roughly equal to the happiness boost one gets from being married,? the report says.
Agriculture?
According to Sir Gordon Conway, author of the book,?One Billion Hungry, we can expect?food prices across the globe to rise steadily for the next 20 years, maybe even by 20%. Try buying shares in a local farm like a CSA (many?bloggers?have reported saving more than?50%?on produce alone), or, start raising more of your own food by planting a backyard vegetable garden. According to MotherEarth News, you can grow?$700 worth of food?annually in a mere 10?10 patch of yard, an impressive return on a few dollars worth of seeds. Don?t have the time or space to tend to a garden? Planting as few as three strategically placed trees?in your yard can reduce your heating and cooling expenses by up to 20% according to the EPA, and can even increase your home?s value.?Planting things in the ground may seem like a rather soft investment ? but you never know what will grow if your green thumb is nurtured!
Health & Fitness
To ensure a healthy financial future, the single smartest investment you can make is to maintain your physical health. If you don?t, none of your other investments will matter (because you won?t be around to enjoy them). It?s not just about saving money on future healthcare costs: most people generate their lifetime?s wealth, including their retirement funds,?predominantly?through labor, not investments. And in order to work, you need to be healthy. According to the Center for Bioethics and Human Dignity, of the?10 most common causes of death, including heart disease and cancer, half are related to lifestyle choices. That means for every penny you spend keeping your weight down, quitting smoking, staying fit and reducing stress ? even if some of these activities are costly (physical therapy, nutrition classes, or even stress-relieving massage) ? they could still pay dividends when they help prolong your life and reduce what you?ll have to spend on hospitalization, medications, doctor?s visits, medical equipment and other health-related expenses in the future.
For example, if you weigh the relatively inexpensive cost of regular check-ups and screenings (my co-pay is around $55 per visit) against the enormous expense of major care such as cancer treatment or long-term home healthcare (researchers from Duke University Medical Center examined the cancer spending of 216 patients with breast cancer, who did have insurance, and found the average out-of-pocket costs averaged $712 a month, most of it going to prescription drugs) you?ll see that the math speaks for itself.
Even insurance companies are recognizing the cost-benefits of preventative health measures; many are offering discounts on wellness services so check with your insurance provider to find out what?s covered under your plan. What?s more, investing in your health doesn?t necessarily have to be expensive: some of the healthiest foods happen to cost the least ? often less than a $1 a pound ??and you can skip the expensive health club, too (walking, jogging and neighborhood meet-ups can take the place of a pricey gym membership).
It?s all about a mindset: putting your savings, safety and health above competing priorities ? and viewing them as legitimate investments in your financial well-being.
Photo courtesy of Flicker/?USFS Region 5.
Source: http://www.farnoosh.tv/making-money/the-best-personal-investments/
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