Saving money is an important step in your journey to financial wellness. However, you can’t get rich by letting your money collect in a bank account for ages. Sure, the number amount may go up, but the value of your money is depreciating all that while due to inflation and various other factors that are out of your control. And even the highest yield savings accounts will probably only give you less than 1%.
If you plan on retiring at some point, you’ll have to do a little more than just save money. You have to figure out a way to grow your wealth and earn some passive income on the side. Sometimes, it really does pay to spend some money!
Here are 5 things to spend money on to actually become richer:
Invest in Yourself
As far as spending money goes, the best thing to splurge on is yourself! No, we’re not talking about buying that overpriced dress or suit; that’s just a waste of money. Instead, we urge that you consider investing some money into your education.
The nature of the job market has changed drastically just over the last couple of decades. Unlike your parents or grandparents, you can no longer expect to keep working the same job until you retire – not unless you don’t have plans to actually retire. Jobs are becoming obsolete at the same pace that new ones seem to be popping up. The best way for you to stay on the right side of that see-saw is to keep updating your skills and knowledge. This will help you find better, higher-paying jobs that are often more secure.
Flip Items for Profit
If you are someone who loves spending time refurbishing items, this can become a hobby that pays pretty well. If you love fixing up homes or cars, you can buy them and work on them before selling them for a higher price. Of course, buying up cars and houses – however rundown they may be – recovers quite a bit of upfront capital, but it can also yield a nice profit if you know how to make it work.
On a less expensive scale, you can still purchase rare and interesting items to flip for profit. And who knows, maybe you’ll make a few extra bucks or maybe you’ll strike gold. For instance, did you know in 2020, TikToker Demi Skipper set out on a quest to trade a bobby pin for a house? A year and several trades later, she achieved her goal! And she isn’t the first one to do so, because the inspiration behind her journey was another blogger, Kyle McDonald, who also successfully traded a paperclip for a house!
Buy an Apartment Building
One of the best places to invest has always been real estate since it is an industry that has largely been unaffected even during times of economic turmoil. Investing in private real estate is something all of the world’s wealthiest people do, so why not do it yourself?
Before you start complaining about not being able to afford a decent rental property, let alone an apartment, did you know that you could become a homeowner by investing as little as $10?
That’s right, first-time real estate investors can have a little taste of it without going all-in with the help of services like Fundrise, which uses crowdfunding to invest in more than $250 million worth of real estate around the country. They have a diverse portfolio of private real estate that includes everything from apartment complexes and homes to massive last-mile e-commerce logistics centers.
You can earn quarterly dividend payments from the rent Fundrise collects from its tenants, all without having to deal with the hassles of being a landlord yourself! You could also earn money through property appreciation over time. Since the company began operation in 2014, Fundrise investors have earned over $100 million in dividends alone. And the best part is that signing up is easy as A, B, C!
Buy Some Stocks
Investing in the stock market is one of the best-known ways to earn passive income. In other words, investing in stocks is a good way to make your money work for you, which is the number one way in which millionaires get “made”. Warren Buffett, Peter Lynch, and other top investors made their fortune by investing in the stock market, so why can’t you do the same?
The good news is that you don’t have to have hundreds of thousands of dollars to get started either, just $5 would do! Another way in which the financial market has changed is that investing in stocks is no longer reserved for the ultra-rich. Anyone can do it with the help of apps and websites such as Robinhood, Public, and a number of others. Not only can you start your investment journey with a fiver, many of these services even give out free stocks when you sign up!
Start a Business
Clearly, anyone’s number one goal to starting a business is to make money, but it also requires that you spend quite a bit of it before you can even make a dime. This isn’t something that should be done lightly. If you are lackadaisical about starting your business, don’t expect the results to be amazing. You reap what you sow, and money is one of the best fertilizers for a new business.
You will need to spend on everything from registering the business and getting the needed approvals to buying supplies, machinery, paying staff, marketing, and much more. A well-thought-out business plan can be the best tool to help you move forward. This way, you’ll be spending money, but you’ll limit wastage.
It can be tough to think of going all-in with your hard-earned money, but remember that you will make it back and more in profits. A business is definitely a long-term investment and it’ll probably take a couple of years before you begin to see any real returns, so keep that in mind before jumping in.