In yesterday’s post about “play money” (My Money Blog – Play Money), I talked about the monetary allocation system that T. Harv Eker suggested in his book (see link below for book at Amazon), “Secrets of the Millionaire Mind.”
As we saw in the Play Money post, T. Harv recommends that an individual invest 10% of her take-home pay towards furthering her education or that of her family. But, what exactly does this mean? What types of educational outlets could you invest your money in? These questions will be the subject of today’s post.
Why to invest in your family’s education?
The reason to this is simple. Most financial texts say that your income/earning potential is your greatest asset. However, I would disagree and extend that statement to read that your mind is the single most important asset you have. This is due to the fact that it drives your earning potential; teach yourself or your family new skills, and your earning potential will increase.
How much to invest in your education?
Now, let’s get a more concrete idea (in lay person terms) of how much we are talking about when we say 10% of your take-home income.
For example, if your gross salary is $5,000 per month and we assume you pay 28% taxes and contribute 15% of your income to your 401k pre-tax, this would give you a take-home pay of $3060 ($5000 – $750 to 401k = $4250 – 28% taxes = $3060 take home pay).
This translates in to $306 of money to invest in your education (10% of your take home pay). OK, great! Now we have a number we can grasp a little bit better.
So, I’ve got $306. How should I spend it?
Ways to Invest in Your Family’s Education
- Pay for your child’s college education (if they are at that time in their lives)
- If your children are younger, open up and/or fund a tax-sheltered educational savings account (529 savings account described in this post: My Money Blog – Give Your Children a Financial Head Start in Life).
- If you are disciplined enough, use the money to buy and sell individual stocks with the specific goal of teaching yourself investing in the process. This should not be done to MAKE money, but only to learn. If you make money, great! But, don’t expect it.
- Pay to take a seminar/workshop with a professional organization in your field of work. For example, in my field of pharmaceutical engineering, ISPE is a powerhouse of knowledge and professional development. ISPE.org – Education and Training has many details on the professional training classes they offer.
- Take a seminar/workshop on developing “soft” business skills – how to work with people, how to sell your ideas better, etc.
- Buy the foreign language version of a movie you know by heart, and try to learn a new language. Or, just sign up to a take a night class in a foreign language.
- Take speed-reading classes to enhance your reading effectiveness
- Since I don’t have children, my favorite way to invest in my education is to buy finance/real-estate, business methodology, Spanish language, and biotechnology related books used from Amazon. See link below for special offers.
Naturally, this list is not all-encompassing, and it should be adapted to best suit each individuals’ needs. The key takeaway that I would like to drive home for you all is to always be thinking about actively developing your skills in your daily lives.
As always, please let me know if you have any questions.
Keep on learning!
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