Best Ways To Invest Your Money
Investing money in the correct manner can allow an individual to save far more money over time than a person that puts extra income in a mattress or a low interest savings account. Those that constantly have a plan for their money understand how a few poor decisions can turn a comfortable month financially into one where life is in a paycheck to paycheck situation. Luckily there are a variety of places to invest money that can help yield results and some that can completely change a person’s quality of life. There are positives and negatives to every form of investing to doing the appropriate research is a necessity to make an informed investment. The following are tips to invest in the following areas as well as some pros and cons of each investment. For more information check out Dr Wealth.
An investment property can be a great source of monthly income if there are consistent renters. Many families invest in an area where they enjoy vacationing so they do not have to spend money on lodging in the location and use it as an Airbnb during other times of the year. The question becomes whether the person investing in the property wants to have an active role in the property or not. This can be solving rent payment disputes, repairs, and other issues that come up when renting a property. For a smaller fee than many people realize hiring a property management company is a way to experience truly passive income. These companies have ironclad leases and do a proper check on potential renters to see if their rental history and entire background match up with qualities a great renter has. A few rental properties earning income can allow a person to retire while still earning due to wise investments form the past still paying off.
The stock market is the first thing that many consumers think of when investing is mentioned. Stock vary immensely in their risks as well as their rewards with some stocks offering decent annual returns while other skyrocketing stocks can change the life of an investor. The one tip for those thinking about the stock market as an investment form is to realize that a portfolio should become more conservative with age. This is due to a person only having a certain amount of income for the rest of their lives and one huge loss could delay or eliminate the possibility of retirement in a near future. A diverse portfolio is recommended throughout life though as a great investment strategy can earn you a good chunk of money yearly.
Personal Development Or Education
People have heard the saying “The best investment that you can make is one in yourself” which still rings true. A person that learns another language or gets certified in another area helps them maximize their earning potential. Take the time to sit down to think about what qualities or skills could really take your career to the next level. You will most likely find out that there are one or two glaring things whether it is a lack of a certain degree or skill, that learning this when a plan is put into place is far less difficult than expected.
Into Your Supplemental Income Source
People that have a side gig that helps them earn extra income monthly can invest their money in growing this income source. A freelancer could invest this in setting up a business LLC and design a website where they can direct new and potential customers. This not only can help drum up leads for business but it will end up paying for itself with sales over time. A person that has a drop shipping store would invest in SEO services as this can help their product rankings which is a huge part in being successful in this niche.
Lowering Existing Debt
For people that have an existing debt their best option is to pay off these debts in as timely of a manner as possible. The odds are that the interest rates are over 4 or 5 percent with some credit cards charging up to 30 percent. Take the money to pay these off as the money will not earn as large of a return as many of the interest rates on average. Set up payment plans that are manageable and use extra income to lower the principle of the loan. There are loan forgiveness programs that can be consulted as many of these programs help lower payments to make them more realistic for a person on a specific income.
Online Savings Accounts
A traditional savings account barely delivers any interest which most people do not realize. According to Elite Personal Finance online banks offer savings rates that range from 2.00% to 2.25% which dwarfs traditional savings interest rates. The best thing a person can do is to research which online accounts offer the most benefits and quickest access to funds. There are some stocks that do not deliver over a 2 percent return so this being guaranteed should be seriously considered. Make online savings account banks and platforms earn your business as they will be investing the money that you have earned.
The reason that a majority of people invest their money is so they can get to the promised land that many people consider retirement to be. Investing in a 401K when your company has a matching program is important as it will be a huge nest egg if you start investing when you are young. There is a penalty for taking the money out of this account prematurely as it is not taxed. A 401K payment could lower your tax rate if you are on the borderline income of a higher rate as it does not count towards your annual income.
Investing excess income is imperative if you want to maximize your overall income and net worth. Do not just let your money sit and not earn for you so start to invest ASAP!