Introduction to Making Your Money Work Harder
Making your money work harder is a concept that has been around for centuries. It is the idea that you can use your money to generate more money, rather than just spending it on things that will depreciate in value. This concept is especially important in today’s economy, where the cost of living is rising and wages are not keeping up. By making your money work harder, you can increase your wealth and financial security.
Let’s say your monthly income is $3,000 but we’re not going to think of it as money but a business owner with 3,000 employees. Some of those employees (dollars) are responsible for keeping the roof over your head and food in your belly. But out of those 3k employees which ones and how many are responsible for growing your business or in this case your net worth. You see if you have a business with 3000 employees this month and 3100 employees next month and 4000 employees next year. You’re business is growing and those dollar employees you got are working hard for you.
Do you see how thinking of each and every dollar as a business employee will make you look at saving and investing differently? Biggest and best money saving and investing tip I could give is the sooner you start thinking of your hard earned dollars as hard earned employees with a business mindset the better off you will be. When you start looking at it this way and see the results of the few employees you actually assign to grow your business (savings and investments) you’ll quickly want to start assigning more and more to do that sort of work for you.
#Strategies for Maximizing Your Money’s Potential
One of the best ways to make your money work harder is to invest it. Investing your money can help you to generate more money over time, as well as provide you with a cushion in case of an emergency. Investing can be done in a variety of ways, such as stocks, bonds, mutual funds, and real estate. Each of these investments has its own risks and rewards, so it is important to do your research and understand the risks before investing.
With that newly developed business mindset you have now you should thinking increasing assets and reducing liabilities. Remember here, its good for business. And remember even the big successful business started small somewhere. Think of Amazon selling books out of garage or even Nintendo actually couldn’t pay the rent and named its famous character Mario after their landlord who gave them a break when they couldn’t pay.
Another strategy for making your money work harder is to save it. Saving your money can help you to build up a financial cushion that can be used in case of an emergency. It can also help you to reach your financial goals, such as buying a house or starting a business. Saving your money can be done in a variety of ways, such as setting up a savings account, investing in a certificate of deposit, or investing in a retirement account. If you’re single with no dependents I think 3 months is sufficient. If your married with kids and are the only working income 6 months of income might be more better savings goal for you.
Benefits of Investing Your Money
Investing your money can provide you with a number of benefits. One of the most obvious benefits is that it can help you to generate more money over time. Investing can also help you to diversify your portfolio, which can help to reduce your risk and increase your potential returns. Investing can also help you to reach your financial goals, such as buying a house or starting a business.
I’ve done a lot of stock trading and on the short term swing and day trades but now I’m very focused on building a dividend and growth stock long term portfolios. I still swing trade occasionally when I find something I really like at a discount but for the most part I’m going long term. Not every stock I own pays dividends but I’m working towards about 80% of my portfolio doing so for me. Buying a little more each and every week I’m quickly growing my annual dividend payouts.
Another benefit of investing your money is that it can help you to build wealth. Investing can help you to build wealth over time, as well as provide you with a cushion in case of an emergency. Investing can also help you to reach your financial goals, such as buying a house or starting a business. For some people the only way they’re realistically going to ever have 3 or 6 months worth of income saved is for them to use investments to grow with time. Keep in mind that those employees you put in the savings accounts don’t work very hard at doing much of anything but sitting there.
Tips for Getting Started with Investing
If you are new to investing, there are a few tips that can help you get started. First, it is important to do your research and understand the risks associated with investing. It is also important to set realistic goals and create a plan for reaching those goals. Additionally, it is important to diversify your investments and to be patient. Investing can take time to pay off, so it is important to be patient and not expect immediate returns.
Even if you have a large lump sum of money that you just inherited or you’ve been lucky enough to win the lottery I am firmly against putting large sums in the market at one time. It’s so much better to DCA (dollar cost average) over a long period of time. The market goes up and down constantly and DCA consistently buying weekly smaller amounts for long periods of time with long term growth plans will greatly increase your successful positive returns of investments.
Making your money work harder is an important concept in today’s economy. Saving money alone will not beat inflation no matter how much you save. You must put your money to work by investing in assets and limiting your liabilities (debts). To think that 50 years ago your grandparents purchased a home for 40k that now 50 years later that same home is going for 250k. This is exactly what I mean by investing in assets. Not just real estate but a home is considered an asset because its value usually goes up long term.
Keep in mind that there are millionaires out there who own multiple homes that actually rent the home they reside in. Doesn’t make sense or does it? I don’t know about you but I’m not going to question the logic of a self made millionaires logic when it comes to what is financially smart or not. Simply put by investing your money, you can generate more money over time and build wealth. Think of it as paying your future self.
Earning money takes Action.
Saving money takes Discipline.
Growing money takes Intelligence.