![]() ![]() The stock market is a great place to put extra money for a few years or build retirement savings, but many investors are their own worst enemy here, so make sure to keep your emotions in check, and only invest an amount that you’re willing to see fluctuate up and down!Īlthough the stock market averages a positive return over time, that doesn’t mean you won’t have down years, because you will. The average investor will do best to simply “set it and forget it.” Put the money into a 401k or brokerage account, make wise investments, and then leave it for years or even decades while checking every three to six months (not every day!) However, where most people go wrong is trying to time the market, beat the market, or second-guess their plan after they’ve entered a position. That’s quite good! In fact, a 7% return per year would double your money in 10.2 years! Since its inception in 1926, the S&P 500 index has averaged a return of approximately 9% per year when you include dividends and adjust for inflation. The stock market is one of the best places to put your spare cash each month if you’re patient and willing to leave it for a period of multiple years. This idea is especially powerful if you have a relatively small amount of money to invest.įor example, if you’re wondering what to do with an extra $1,000 or $500 a month, or just a single amount of $1,000 in the bank, investing in yourself is one of the best things to do with your money… and one of the most effective ways to see a return on that investment. So while traditional investments, like a 401k, should be a part of your strategy, and we’ll cover them soon, don’t neglect to put your pay and income back into yourself, too! Because if you’re like most people, your knowledge and skills are what earn you the most money right now. Those are the single best investments I’ve made as I’ve grown this website and blog, which is my full-time business! Other tiny investments, like a $100 online course, have also paid huge dividends in my life and career. I’ve learned skills from a $10 book that have made me tens of thousands of dollars or more (the topics I read about were digital marketing, copywriting, and other related areas). If you can build new skills via books, online courses, coaching, etc., you could earn thousands of dollars extra each year. One of the best ways to increase your income and future earnings is to invest your spare cash/income back into yourself! Now that we’ve plugged the biggest “leak” in your finances, let’s look at some more ways to put your money to work for you so you can earn more from your cash. So that’s why I recommend paying off all high-interest debt as one of the first steps when you have enough income or extra cash to do so!Īfter you’ve paid down credit card debt, look at other debt such as car payments. Every month that you carry high-interest credit card debt, water is dripping out! If you plug that hole, you get to keep all of your water. Picture your savings as water in a bucket that you’re trying to grow each month.Īnd those monthly interest payments are a hole at the bottom of the bucket. Pay Down Debtįirst, if you have high-interest debt like credit card debt, it’s usually a good idea to pay off that debt as quickly as possible.Ĭredit card debt often comes with a high interest rate (17-20% or higher), so you could free up a lot of extra cash by just paying down this debt and not having to pay interest in future months. Let’s get started… 10 Smart Things to Do With Extra Income and Spare Money 1. Mistakes to avoid when deciding where to put your cash. ![]() ![]() What to do with saved money and extra money sitting in a bank account.What to do with extra income each month (whether it’s $500 a month, $1,000, or much more).So here’s what we’ll look at in this article: …in helping you retire early, buy your dream house, or reach other big goals.Īnd if you’ve got free money sitting around in savings accounts and checking accounts, you can put that money to work to reach your goals faster, too!īut putting your cash in the wrong places can hold you back, force you into a late retirement, and keep you from reaching your financial goals. Making money in your career is half the battle, but what you do with that extra income can make the biggest difference… ![]()
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