Most people think that the only way they can build wealth and become financially stable is with a job. While having a job is the main way to earn money, it’s not the only way, especially if you’ve saved up a nest egg over the years.
One of the major differences between the wealthy and the less wealthy is that wealthy individuals have the ability to earn interest while everyone else pays interest. Money is a tool that can do most of the work for you if only you save and invest consistently.
The easiest way to become financially independent is to have your money begin to work for you and not the other way round.
Not everyone would like to get up five or six days in a week to go to work to generate much-needed cash for their families, and here are four amazing ways on how to make your money work for you to generate more dollars.
How To Make Your Money Work For You
Not everyone knows how to utilize their money effectively. Sure you can leave it in a regular bank account where it will be safe, but you won’t make much money that way so why not make it work for you?
Passive income is the best type of income in my opinion, because it allows us to have more of one of the most valuable asset we have, our time. Time to spend with family, travel, pick up a new hobby or simply relax.
Here are some of the top ways to make your money work for you:
- Open high-yield savings account
- Invest in the market
- Invest in real estate
- Be a silent business partner
Open a high-yield savings account
If you are getting tired of the low interest and slow growth rates of your traditional savings account, it’s high time to consider moving your funds into a high-yield savings account.
Basically, a high-yield saving account is a bank account that earns you a higher interest rate for your deposit when compared to the typical savings account and whether you want to stash away cash for improving your home project or boosting your emergency funds, this account will help you to quickly reach your saving goals.
Annual percentage yields for typical accounts is around 0.01%, while that of a high-yield account falls between 1 and 2 percent or even higher.
For instance, if you deposit $10,000 in a high-yield savings account at 1.35% interest rate, you will have $135 annually and the value gets higher as you continue making deposits.
These accounts are available through brick-and-mortar or online bank and ensure that the account you open is insured by the FDIC.
Invest your money in the market
Another great strategy on how to make your money work for you is by investing in the market. To invest is not a scheme that can get you rich quickly but it’s a way to grow the wealth you have consistently.
Participating in the market is a sure way of making your money works for you and will help you become financially stable.
Most people pull their money in and out due to future uncertainty as they try to minimize losses when the market dips or take advantage of favorable fluctuation, and that’s where they get it all wrong.
You should, therefore, leave your investment alone and it will eventually grow and give you great returns.
For instance, you can put your money into the stock market where you purchase a stock and own a small portion of the firm you bought into.
When the firm profits, they will pay you a portion in terms of dividends depending on how many shares of stock you already have, and this will ensure that you have a constant flow of income.
Invest in real estate
Over the last few years, real estate investment has been spreading like wildfire across the world, and more and more people are considering it as the best money-making strategy.
However, it is not for the fainthearted as it requires patience and hard work to get returns. If you have the risk tolerance and available cash, investing in commercial or residential real estate is a great way to take your financial standards to a higher level.
Real estate investment involves two things. One is the house-flipping, whereby an investor purchases a home, makes few changes and renovates it to make it more appealing on the market and thereafter sells it at a higher price.
Secondly, an investor buys land to resell later at a higher price or build properties (industrial, commercial or residential) for rentals. Either way, real estate investment gives you a steady and reliable income stream throughout the year to boost your financial status.
Become a silent business partner
Starting and running a successful business is not as easy as it seems especially because it requires high managerial skills. If you don’t have these skills but you have capital, becoming a silent partner is a great way to grow your money.
A silent business partner is an individual who provides financial support to a business without participating in the daily operations of the partnership.
In other words, silent partners are individuals who are looking for the potential profits associated with owning a business but are unwilling to manage the company.
They are regarded as silent partners because they have no authority of entering into contracts with any third party or perform any action on behalf of the business.
The objective of becoming a silent partner in any profitable business is to earn passive income while engaging in little to no effort in the business’ operations.
These individuals are brought in a company, not for their knowledge but their financial resources. This, therefore, means that when you become a partner, you will receive an income stream as the business grows and profits will increase with time helping you to become financially independent.
However, any business can incur loses so be prepared for that too as you enjoy the profits.
Final thought
Getting money to work better for you is easy. If you’ve been working hard to get money, it’s high time you let your money work for you.
Investing in the market, opening high yield accounts, investing in real estate or becoming a silent business partner are great ways to start your journey to becoming financially independent.
The good news is that when you invest in any of the aforementioned ways, you’ll have a constant flow of income with little or no effort.
