Making money is something that is very important. Most people trade their time and skills for a paycheck. But if you ever want to become debt free and financially independent, you’ve got to figure out how to use your money to make more money. Once you’ve got this figured out, you are on the road to riches. While it may take several years of effort, it is much better than trading your time for a paycheck.
The first way is the most simple, and the way most people do without thinking. You put your money into a savings or checking account that bears interest. The bank actually pays you money in order to be able to use your money. The rate of return for banks are anywhere from one percent and up.
A slightly better return on your money is with a certificate of deposit, or a CD. These pay higher rates because they are for fixed terms. you can’t take more money out of these during the fixed term. You can expect to get three or four percent on these.
Even higher rates of return can be found in money market accounts. These are where your money is invested in the stock market. Since you aren’t investing directly, there is less risk, but there is also less return. You can expect about six percent or more on these, but it’s not guaranteed.
Those that would like a slightly higher rate of return can invest in mutual funds. These are large collections of various stocks, usually centered around a certain investing theme, such as aggressive growth or conservative long term gain.
Naturally, if you want to make some significant double digit gains, then you’ve got to invest directly into the stock market yourself. Buying shares of individual stocks offers the most possibility for gain. However, this also comes with a large amount of risk, so you’d better be careful.
When you realize how many different ways there are to invest your money, you can begin to start looking for a method that’s right for you. And when you find it, you can invest your money and watch it grow.
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