What Does It Really Mean to ‘Make Money With Money’?

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When it comes to making investment decisions based on your personal finances, there are limited options. However, no matter if you are setting short-term or long-term goals, there are some ways to grow your money that don’t include wracking up credit card debts or starting your fourth side hustle. Extra income is always great, but there are ways you can let your money make more money for you without you having to lift a finger. 

Read: What To Do if You Owe Back Taxes to the IRS

How Can I Make Money With Money?

Before you can sit back and start earning some extra cash, you need to lay down a solid foundation for your finances. Investment accounts and mutual funds are all great, but the first step you need to take is investing in yourself. Here are some key jumping-off points: 

Pay off Debts

Paying off things such as mortgages or student loans efficiently means you are lessening the expense of interest rates. To help you do so, create a monthly spending budget that allows you to cover your expenses, conserve around 20% of each paycheck for savings and take the rest to put toward paying down your debts.

Develop Your Career

Making the most of your skill set is one of the main ways to turn your money into more money. Whether this is taking on a mentor you admire or furthering your education through courses or programs, focusing on honing your talents on a career path you are passionate about goes a long way in putting you in high demand.

Live Within Your Means

Skimping where you can now may help you build enough wealth to invest in opportunities in the future. By avoiding the temptation to spend money where you don’t need to, you can have more to play with for long-term financial goals. Having a savings cushion built up also allows you the opportunity to leave a job you don’t want to pursue a new career path where you can grow. 

How To Make Money With Money: Invest Invest Invest

Depending on your risk tolerance, investing can be either terrifying or exhilarating. Making money with money doesn’t have to be a full-time job, but there are investment opportunities that can earn you passive income. The following takeaways can help you start to do just that: 

1. Invest in building your own business
2. Invest in real estate
3. Invest in the stock market

1. Invest In Building Your Business 

A great way to make more and keep more of the money you make is to start your own business venture. If you were to take a page out of the book of financially successful entrepreneurs, they would usually say starting your own company is the key to success and wealth. You don’t have to be Warren Buffet, Bill Gates or Oprah Winfrey to understand this could be the next move for you. 

With today’s social media influence and tech capabilities, you can start many businesses online from your living room with little overhead. Here are some starting pointers: 

• There are many existing markets and business models you can learn from and also alter to fit your specific vision. 
• Starting small means lower costs and overhead but also higher chances to grow steadily and not overextend your reach. 
• Use your existing social media platforms such as Instagram or your YouTube channel to take advantage of affiliate marketing. 
• Separate yourself from the pack by offering exceptional customer service, support and value for your client’s dollar. 

2. Invest In Real Estate 

Real estate investments are classic for a reason as though they can be a lot of money up front, the return on investment is typically consistent and high. One of the many advantages of investing in real estate is you can also borrow against these assets to help fund other investments. Here are some ways to get into the real estate game:

• Purchase rental property so you can have tenants paying off your mortgage while turning a profit. This also helps you build a real estate portfolio.
• Buy property that is considered a fixer-upper so you can then flip it and sell it for a much larger sum than the price you purchased it at. 
• Real estate investments can take a while to pay off as they are big expenses, so be sure you have enough money and you are comfortable with the risk of losing some return in the short term. 
• You should only invest in real estate if you have enough money to spare after you’ve paid off existing debts and the rest of your needs. That way your money makes money. 
• Real estate investments can be a great source of income from either rent paid to you by tenants or the capital return you get when your property appreciates in value. 

3. Invest In the Stock Market

Investing in general is commonly associated with the ins and outs of the stock market. However, it is one of the most high-risk yet high-reward ways to make money with money, in fact, it may even be where the phrase originated.  Here are some key ways to invest in the stock market:

• Stocks: These represent ownership in a company where you share part of the profit the company makes. You can make money by selling them for cash or sit back and make passive income on the dividends. 
• ETFs: Exchange-traded funds, or ETFs, can include stocks and bonds but essentially are a basket of securities that track an underlying index. 
• Mutual funds: This type of investment pools your money with other investors’ funds as well as pensions or endowments. This allows the capital to be efficiently invested and allocated. Simply put, this pooled money allows you to buy stocks, bonds and other investments through a fund manager, so there is less work for you to do. 

Final Take To GO

It takes money to make money with money. Though that seems like a lot of money talk without a lot of money walk, there are ways you can invest to earn returns and profit in a way that your investments become regular or passive income. Nothing is guaranteed to happen overnight when it comes to growing your funds but taking some steps now to invest in your future is a wise choice.

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