Best investment you can make

When people ask me about the best investment. I answer that it is in their own health. I don't mean this in a hippie way. Actually it is pure math. A force that works strongly in your favour when investing is; time.

Compounded interest (Einstein called it the strongest force in the Universe) becomes tremendously powerfull over time. Being as healthy as you can manage to be is therefore a very strong investment tool. If your income (from all sources;investment and otherwise > living expenses. If it's the other way around, it's actually detrimental to the building of your portfolio but most likely still preferable.
.
Let me back this up with some simple math. Let's say you are a smoker. It's widely accepted that you will add years to your life by quitting right now. There are different studies showing different results in how many years you will add to your lifespan on average but one i found showed 10 years. I don't actually know whether this is a high or low number. But let's work with it. Say that you are 30 years old now and you have 10.000 $ to invest. If you would live to 60 and you could attain a annual rate of return of 8% (historically attainable) over these 30 years. Your initial investment of only $10.000 would make you a millionaire.
Pretty good. But if you quit smoking now. And added 10 years to your life. Then upon your death at 70 years of age you could bestow your favourite charity with over two million $. If you would invest every $ you would save from smoking a pack a day you can probably build a wing to a hospital or a university library.

So there you have it: compounded interest x longevity = profit

Note that there are many ways in which to increase your overall health. Probably the biggest profits are to be gained by quitting smoking, staying within a healthy BMI range and for all the financial and poker professionals out there most importantly; try to keep the stress manageable.

Category: compounded interest , Einstein , health , investment , quitting smoking , smoking , stress