Why You Should Start an Invest-in-Yourself Fund
Don't miss out on important opportunities for growth because you can't afford them.
While building an emergency fund made sure I could always survive, financially speaking, building a fund dedicated to investing in myself -- a self-investment fund -- gave me the chance to thrive.
What is a self-investment fund?
A self-investment fund is similar to an emergency fund in that it's an amount of money you save up and then set aside in a way that leaves it easily accessible. And as with an emergency fund, you tap the reserve only for expenses that fulfill the fund's stated purpose and refill it once the money has been used.
However, while an emergency fund is used for emergencies, a self-investment fund is used for opportunities to invest in yourself. This can mean different things for different people, and self-investments can be professional or personal.
I've used my self-investment fund for writing courses when I felt like my skills were drying up, professional conferences when I needed to network and gain new clients, and yoga retreats when I needed some time off to improve my physical and mental well-being.
Why you need a self-investment fund
Most people consider opportunities to invest in their own self-improvement -- whether that involves taking a class or going on a wellness retreat -- to be unreachable, self-indulgent, or both.
However, if you have the money saved up, and doing so won't have any impact on your budget, investing in yourself is neither impossible nor selfish. In fact, self-growth is crucial to your capacity to contribute to the rest of the world.
Often, these opportunities arise suddenly. You might hear about a last-minute conference or workshop, or get the chance to train with a mentor at a moment's notice. It's best to have your money ready to go when that moment comes.
Most people say no to themselves when these opportunities come up because they're worried about money. Having a dedicated savings fund for investing in yourself will encourage you to do seize these opportunities more often, and allow you to do so without stressing out about your finances. You can even use your self-investment fund to avoid going into debt, rather than giving in to those circumstances that might tempt you to pay with your credit card or go into a payment plan that charges interest.
How to start a self-investment fund
You can start a self-investment fund with as little as $25. Opportunities for self-growth can be as simple as using that money to take a potential mentor out for lunch or go to a networking event in your area.
The point is that the funds you intend to use for self-investment opportunities are set apart from your other money, dedicated to that purpose, and regularly replenished. Ideally, you set aside money for your self-investment fund in its own savings account.
Once you've done that, you can start building the fund toward a goal amount each month with automatic deposits into your savings account. The amount of money you keep in a self-investment fund is completely up to you. You can gauge an appropriate amount by thinking up examples of how you might like to use the fund.
If you foresee using it for one-day seminars or day trips, you might need only a few hundred dollars. To have enough money to cover major conferences or other opportunities that involve travel, you should have at least $1,000.
Of course, a more robust self-investment fund will open up more robust opportunities for growth. A $5,000 fund will allow you to take on multiple self-investment opportunities at once, signing up for classes, retreats, and even big-ticket items as you please.
Where to keep your self-investment fund
I keep my self-investment fund in an online savings account, and I encourage others to do the same. You want to be able to access your money quickly and easily, and high-yield savings accounts from online banks offer higher earnings with full liquidity and no risk (as long as they're FDIC-insured).
With an online savings account, you'll be earning an interest rate that's often 10 or 20 times higher than what you'd get from a savings account with a traditional big bank. I earn hundreds of dollars in interest each year on my high-yield savings accounts, and all of that goes right back into my self-investment and emergency funds.
Another perk of using high-yield savings accounts from online banks is that they're free and often don't have any minimum balance requirements. What's more, many banks allow you to create as many accounts as you want. This means you can open several accounts, all under the same name and login, and name each one differently according to its purpose. You can keep your emergency fund and self-investment fund separate.
My self-investment fund has already provided me with huge benefits both professionally and personally. I highly recommend starting one for yourself now, even if you can spare only $25 to start.
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