Working Harder not Smarter
You’ve paid all your bills, you’ve put aside some cash in your savings account and you still have some cash left over. It may not be a large amount, but do you know if you invested that money faithfully it could end up becoming something significant. Let’s do some math. Let’s assume you have a hundred dollars left over every month. Instead of blowing this, let’s assume you just saved it in a jar in the house. No fancy investments, IRAs or 401Ks. Just plain old savings.
In one year you would have $1200. If you save faithfully for the next 10 years, you would have $12,000. That’s enough to help you do a ton of stuff, from taking a long-awaited boat cruise, to self-publishing that book you’ve been wanting to write and even providing seed capital for your startup. Considering this money has probably lost value over this time because it has not been earning anything, those are some pretty good options.
Now let’s talk about some ways you can invest that money over time and get a decent return on investment. Keep in mind these are relatively safe options to grow your income as we’ve left out riskier types such as cryptocurrencies.
Professional Certifications
As a real estate agent, your career should come first. Your business depends on how well you understand the processes and rules that govern the real estate market. Putting together your extra cash to pay for professional certifications will help you do this. By getting a certification such as the Professional Certificate Program in Real Estate Finance and Development at MIT, you can increase your capacity to take on bigger deals and even branch out into other real estate fields such as real estate financing and management.
Mutual Funds
Mutual funds are another safe way of investing your extra cash to bump up your income. Mutual funds offer a balanced approach to investing in the stock market or money market while hedging your funds against loss. Most mutual funds also insure your money so if the investment instrument runs a loss, your principal amount remains intact. Understanding how mutual funds work, however, may require you take some time to do research or speak with a financial advisor.
Index Funds
Index funds have been called the average man’s money maker. That’s because index funds help you bet on the overall movement of the market rather than on the movement of a basket of stocks. History has shown that index funds continue to appreciate and outperform managed portfolios. In addition, you can bypass expensive portfolio managers and invest in index funds yourself. Vanguard is an example of an index fund that has been steadily bringing returns since its inception in 1975.
Retirement Funds
An Independent Retirement Account or IRA is another way to increase your future income. While most people rely on their employer or make minimum contributions to their retirement accounts, you can grow your future income by making extra payments. The remarkable thing about IRAs is that you get a tax break from what you save. What’s more, when you liquidate your funds after you cross 60 years, the returns on your account will be tax-free. Only keep in mind that this is a long-term investment. Any early withdrawals will see you get slapped with a 10% tax by the IRS.
Real Estate
Look to your area of expertise to grow your income. Here you have two options. Flipping homes or buying rentals. Keep in mind you may need to save up first before you can do either. However, if you save up at least $10,000, you can put a down payment on a small property that will bring you good rental income. If you search well, you can find a property that has a rental income higher than your mortgage payments. You can also go the riskier, yet more profitable, route of flipping houses. Combine your cash to do a down payment, fix up the house and then flip it. While real estate may seem expensive to start, you can start small and grow over time.
Analyzing how much you can save from your extra cash can help you see new opportunities around you. You can also go a step further and forfeit those daily Starbucks or eating out. That can also free up some more cash to chase after these investment opportunities.
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