People entering the world of investment for the first time can be overwhelmed by the wide array of choices before them.
Stocks, index funds, corporate bonds, government bonds, commodities, crypto – there is a dizzying amount of choice available to investors today, often at the click of a button or a tap on a phone.
But for the young, or those who have not yet reached high salary levels, the best thing to invest in could very well be themselves.
Microsoft founder Bill Gates, in a 2014 Reddit ‘Ask Me Anything’ thread, replied to a question asking for his best personal financial advice for people who make under $100,000 a year.
His answer: “Invest in your education.”
He will also help out – his blog, Gates Notes, offers rare insight into the thoughts of one of the world’s greatest minds.
While higher education is strongly correlated to higher income, the benefits of education go far deeper, and the education itself need not be formalised.
That’s a sentiment Elon Musk, CEO of Tesla and SpaceX and currently the richest man in the world, would very much agree with.
“Constantly think about how you could be doing things better, and questioning yourself,” he advised, basing it on his own childhood, when he frequently read for 10 hours a day, even reading the entire Encyclopedia Britannica once he had exhausted all the books at the library.
Mr Musk added that young people should find a way to “be useful”, although he acknowledged that “it is very hard”.
He described it as “contributing more than you consume” – something made easier with the knowledge and insight gained from extensive study.
But it is not only traditional ways of learning that Mr Musk suggests.
“Talk to people from different walks of life and different industries and professions and skills,” he said, arguing that the more one does this, the more their mind is opened to the richness and complexity of the world.
Warren Buffett, another of the world’s richest men, albeit with an entirely different public persona, agrees that education is the best investment.
“Go to bed a little smarter each day,” he once advised. “Investing in yourself is the best thing you can do. Anything that improves your own talents.”
Ultimately, Mr Buffett said, “The greatest investment a young person can make is in their own education, in their own mind. Because money comes and goes. Relationships come and go. But what you learn stays with you forever.”
The Money Guru is a BusinessNow.mt column presenting insights from some of the top business and investment minds from around the world. Are you looking for advice on a particular subject, or found useful tips you would like to share with a wider audience? Drop us a line on our Facebook Page.
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