Any retirement professional can tell you that you need to invest your earnings in order to retire in comfort. They might tell you to look at bonds – debt issued by corporations or municipalities – and shares of stock, which are pieces of individual companies that entitle you to a portion of the profits (known as dividends).
And it’s true – investing is essential to stay ahead of the curve. Inflation (the gradual decrease in the value of currency) results in every dollar you hold becoming slightly less valuable over a year of holding it, averaging a rate of about 3% annually. That means that if you want to keep your money, you need to earn a 3% rate of return just to break even – so shoving your cash into a savings account paying out less than 3% return means you’re losing money, even if you don’t pay any fees on the account. It doesn’t take long to discover that even the highest-yielding savings accounts are currently paying below 1% in interest.
Such low interest rates are having an impact on bonds, too, generating returns well below 3% on the value of the investment for all but the longest term bonds. That leaves stock – and anybody who lived through the recent market crash knows you can’t count on the value of stock as a way of generating income. On top of that, dividends are at some of the lowest rates in over a hundred years of tracking the market. Meanwhile, corporate cash reserves are at all time highs as the corporate world cushions itself against future shocks, sharing even less of its money with the average citizen – although every wage earner knows that! Fortunately, there remains one investment you can make that offers a genuine chance of generating an inflation-beating yield – investing in yourself.
When you invest in your own revenue potential, the yield is determined not by central bank interest rates or uncontrollable fluctuations in the market, but by the amount of time and effort you’re willing to put into it. That puts you in control – no more asking somebody else for a raise, or riding the whims of the market like a Vegas slot machine. Once you’ve taken control of your own revenue stream and secured your own Personal Independent Earnings, you very literally become your own boss.
Building and managing your own business is not a free ride by any means; you’re going to put in time, money, and plenty of elbow grease. But whether you’re saving for retirement, getting yourself out of debt, or simply tired of working for somebody else, it’s clear that there’s never been a better time to look into your options for building your own source of personal, independent earnings.
It just might be the best investment you ever make.
