Here's the biggest asset that's missing from your 2020 investment portfolio
No, it isn’t Tesla or Bitcoin…
The topic on investing never fails to excite my friends. After all, for young working adults like ourselves, the enticing prospects of capital growth and financial freedom are often far too hard to resist.
In our rare handful of catch-ups this year, they would spend hours discussing the most coveted investment assets in today’s tumultuous market (Tesla and Bitcoin duh) and what their ‘ideal’ portfolio would comprise of to achieve that mythical return on investment (ROI) that even Benjamin Graham would drool over.
At the height of our conversations, I would often interrupt by asking if they have ever considered themselves to be part of their ‘ideal’ portfolio. Sadly, this question never really got through to them and it was often dismissed as just another elliptical rhetoric of mine which they have probably grown all too familiar with.
But I know it was far from that. It was, truly, a question of paramount importance to each and every single one of us; one that is worthy to be mulled over and over again at every juncture of our lives. Yet, why is it that we hardly devote much thought into it? Do we not see ourselves as an asset too?
“The best investment you can make is an investment in yourself”— Warren Buffet
To be clear, investment herein is not just limited to a monetary context. It applies equally to us dedicating time and energy into ourselves — whether is it signing up for an online course to learn a new skill or even simply just picking up a self-help book at your local library. But of course, by the classic sense of the term and as the practical beings that we are, we will only do so when we expect a positive return to our efforts.
So, tell me, how does enrolling into that $299 week-long data-analytics course going to benefit my career in sales? Will I become the next Jack Ma by simply watching this 10-minutes YouTube video on entrepreneurship? Heck, am I even going to expect a pay raise just by spending a day reading this Digital Marketing for Dummies book that I grabbed off the library shelf?
“Formal education will make you a living; self-education will make you a fortune”— Jim Rohn
Surely, it is hard to deny these thoughts. It is hard to convince ourselves to continue learning beyond our formal education especially since we have been indoctrinated to believe that an undergraduate degree is all we need to get dem monies rolling in. It is hard for us, especially in this age of pragmatism and immediate gratification, to see value in a rudimentary course or a meagre 30-page self-help book. Yet, at the same time, it is hard to explain the strange irony of why we can so readily see ‘value’ and place confidence in that one stock that has been raved about all over by the financial analysts and gurus out there who likely have zero interest in our state of wealth and well-being.
Sometimes, it takes a ‘Black Swan’ event like the Covid-19 pandemic to throw us into a necessary state of flux — and, through it, emerge with a new found epiphany. As this unprecedented year draws to a close, I thought it would be a good time for all of us to look back, reflect, and rethink how we approach the concept of self-investment.
You are the best hedge against economic adversities
When the Covid-19 calamity struck in March this year, who would have thought that it would ignite the worst economic crisis since the 1929 Great Depression. Countries worldwide headed into lockdown, markets tumbled at record breaking pace, and major industries became obsolete overnight. Millions loss their livelihood and were left helpless in the devastating trails of the global crisis. My family was not spared either.
I recalled beginning my job hunt as a fresh psychology graduate right around the time when the economy was withering and employment rates were plunging. What made matters worst was an earlier accident which had left me with significant mobility issues for a hefty period of time — and that further narrowed my job choices in an already debilitated labor market.
To sustain myself, I began to put my skills to work; skills in digital design and video editing that I had picked up from government-funded courses a few years back. I took on gigs that involved designing marketing posters and business cards, basic video effects, and video subtitling. With the surge in number of retail investors jumping in to capitalize on the prevailing market volatility, I also saw scope in the demand for customized trading chart signals/indicators — and that spurred me to begin learning coding by watching hours after hours of free YouTube tutorial videos (God bless YouTube!). To be frank, the money that I earned from these gigs was modest. Nevertheless, they were sufficient to get me through those trying months.
My mum? She gained quite a following herself by selling fabric face masks which she personally hand-sewed. Credit is certainly due, in part, to our late grandmother, for she was the one who imparted the precious craft of sewing to her. As for my sister and her fiancé? Well, let us just say that the couple baking classes that they attended were not entirely for fun and recreation after all. During those months when they had to take unpaid leave off their retail work, they started their own home baking business which continues to be in operation till this day!
“The beautiful thing about learning is nobody can take it away from you”— B. B. King
The point here is this. Some day in the near future, our beloved stocks may come crashing down on us again, the jobs that we hold so dearly could be taken away overnight, and the flourishing economy that we once knew could be upended in a blink of an eye. But the one thing that stays, through all ups and downs, are the skills and knowledge we have within us. Yes, perhaps we can never really tell when they will be put to work for us, but when that day comes, you can be sure that they are your best bet to get you through.
You are part of the disruptive future
Even before the advent of Covid-19, we often hear of the saying about how 85% of jobs that will exist in 2030 have yet been invented today. Admittingly, I was amongst the greatest skeptic of this statement when I first heard it from my professor back in university — I mean, I could still see our drivers, food vendors, aviation crew, retail and tourism staffs going about just fine. How different can things get? Mind you, these were jobs that already existed decades ago and they have been a significant part of every nation’s GDP. But guess what happened?
By virtue of hindsight, I thought I could refine the above statement into one that better epitomizes the predicament of our existing labor landscape; one that has a greater bearing to what we have witnessed throughout Covid-19:
85% of skills required in the jobs of 2030 have yet been acquired by us today.
Just take a look at what happened to the millions of poor workers who are ill-equipped to survive the market debacle? What happened to those vendors and businesses who persistently resisted change to their operation models? Little, if not none, were able to withstand the relentless transformations of reality in those short months. But what about those who were able to adapt and embrace agility? They emerge, worn, but ever equipped to overcome future adversities that come their way.
The truth is, jobs and businesses do not just disappear. They continuously evolve and are reinvented to stand the test of time. When they do, the job roles and skill-sets that are required of us get redefined too in order to fit the present realities. What we know today may not be what is needed tomorrow.
If we are able to realize this and begin taking ownership of our future — to actively discern and equip ourselves with what tomorrow’s demands will be — rest assured that you will continue to thrive even in the most dire economy. However, should we fail to do so and remain comfortable resting on our laurels, we will become obsolete and eliminated in no time.
Positive returns take time
Patience is a dying commodity these days. Two seconds is all the time we will wait for websites to load and same-day delivery options are fast becoming the de facto criteria of what we look for in online retailers. There is nothing inherently wrong in this as humans are hard-wired to demand immediate pay-offs, and today’s technology, for good or for worst, has indeed afforded us this luxury to.
“Patience can produce uncommon profits”— Philip L. Carret
That said, not all things in life can be delivered to our doorsteps the next day. Do you remember how long it took to complete our formal education and to graduate from university? At least where I live (Singapore), that takes a minimum of 12 to 13 years. What about the time it takes to achieve meaningful and fulfilling relationships with our clients, peers, or even our loved ones? Well, I believe many would concede that they are still in the process of doing so — and this is, perhaps, a process that could even take us a lifetime.
How about in terms of our savings and investments? Have we ever been told that our deposits and investments would multiply by ten or twentyfold in a short few months or days even? I am pretty sure very few of us would buy into that. Instead, we would, realistically, expect our funds to generate handsome profits for us over a long-term horizon through the power of accumulation and compounding.
The very same logic applies to self-investment. Indeed, we may not be able to observe immediate, tangible returns from the one book that we read or that short rudimentary course that we have attended. Nevertheless, always bear in mind that every minute you spend learning something new is a minute contributed to the growing wealth of knowledge and the repertoire of skill-sets that you possess. Like the money that we conscientiously commit to our savings and investments, it is only a matter of time for their value to be realized and accrued. We ought to place faith in this.
The fundamentals are favourable
In the realms of finance, fundamentals entail the cogent economic and financial factors that govern the valuation of a particular security. Information from the evaluation of these factors is generally used to inform our investment decisions. A company, for instance, with favorable fundamentals can be described as one with outstanding financial performances backed by positive economic sentiments — and for most investors, these all add up to be a good and worthy investment opportunity.
If you ask me, I would say that the fundamentals for investing in ourselves have already been favorable for a long time coming. Technology has enabled information and knowledge to be made available right at the tip of our fingertips. Want an answer? Search it up on Google. Want to pick up a new skill? YouTube and Vimeo are great places to begin with. The biggest catch? All of these come at almost no costs to us at all!
In recent years, we have also observed the proliferation of online learning platforms such as Coursera, Udemy, Udacity, edX, and Skillshare which offer a plethora of educational and development courses put together by professionals from all around the globe. Fees for these courses are relatively affordable and many of them also offer certificates that complement and add value to your personal portfolio. Moreover, signing up for your desired course or workshop takes just a few clicks! That is how convenient it is to begin your journey of learning.
For years, nations worldwide have placed a high premium on lifelong learning. In fact, during the World Economic Forum held earlier in January this year, global authorities have highlighted once again the imperative need for a “global reskilling revolution” — and in the short few months that followed, we have seen how Covid-19 has been nothing short of a catalyst that substantially accelerated the adoption of this notion.
In addition to the rise of online learning platforms and educational technologies, there has also been a multitude of government initiatives to support organizations’ commitment toward employee development and to provide individuals with a wide range of high quality learning opportunities. Educational and training courses are heavily funded, employers are incentivized to upskill their workers, and educational infrastructures continue to expand rapidly — all these in the name of building a resilient and future-ready workforce. The coming years will never be a more ideal time for you to begin establishing a better version of yourself.
The fundamentals are aligned. Are you ready to invest in this greatest asset?
At the time of writing this piece, I am five months into my new role as a learning designer at ArcLab, an EdTech solutions provider that empowers organisations to create effective mobile training for employees. I have been privileged to be handed the opportunity to work with a host of companies from F & B, retail & hospitality, manufacturing, and construction industries — supporting them in digitizing their training materials as well as developing meaningful learning modules and experiences for their workers.
In this time of economic pandemonium, plagued by soaring retrenchment rates, it is exceptionally heart-warming to see these organisations continue to channel faith into upskilling and nurturing their human capital for a post-Covid-19 era.
If you too identify with the ethos of personal development, and you too, subscribe to the notion that human capital is the most valuable asset to your organisation, then let us journey alongside you to digitalize and futureproof your workforce today!