Financial freedom really isn’t that hard to achieve if you work for it. No matter your current cash flow problems or savings deficit, you can work through these short-term setbacks and create fiscal growth in your bank account and portfolio with a can-do attitude and the commitment to learning. In this article, we’ll discuss a few essential money making tips you should know.
Getting ahead takes some know-how and the boldness to break the mold. But it isn’t rocket science.
5 Money Making Tips You Should Know:
1. Learn about assets, buying power, and depreciation
Understanding just what is collateral, depreciation, healthy cash management, and other essentials will put you on the right path to future success before you even get started building wealth.
Collateral is the leveraging of your current assets to secure a loan to buy something. For example, your car might be worth $10,000 and you want a loan for fifteen to start a new business.
The bank might be hesitant to lend you the funds perhaps because the business model is shaky or they’ve never heard of the product you intend to sell and can’t judge its viability with any certainty.
At any rate, you may be able to offer your car as collateral in exchange for the loan itself or for a more favorable interest rate. Essentially, if you cannot pay back the bank, they can take your car to recover the lost revenue.
This is also a great lesson in depreciation. Inflation causes your money to lose value every year, currently at about 1.5%. This means that $100 in your wallet over the next year can exert less buying power year over year.
This is because goods and services increase in price over time and the face value of your cash remains the same.
2. Save all that you can in high-yield options
These invaluable lessons in the economics of money should mean one thing, you must save all that you can in high-yield investment vehicles in order to maximize your money’s buying power. It’s not enough to store it in a bank account that nets a one or half a percent growth rate.
Over the long term, this actually loses value! Understanding how to create the best profit margin on your capital is the only way to get ahead as the years continue to roll by.
3. Learn the stock market
The stock market is a great place for first-time investors. Utilizing index funds and the companies you know well, you can place your cash assets in the financial future of businesses that appear poised for growth.
Stock market returns are often much higher than bank savings rates, but nothing is guaranteed in the market, so assume only the risks you are willing to lose altogether.
4. Real-Estate: Buy the right fixer-upper at a steep discount
Many successful stock traders often wonder about the best time to buy an investment property. Fortunately, the answer is now! Covid-19 is producing a large impact on the real estate market.
With fewer people in a position to purchase a home, sellers will struggle to find buyers. That’s where and when the smart investors will show up and find their bargain deals. In the long run, prices will continue to rise and rentals will continue to increase along with rental pricing.
Buying real estate is a risk of course, and investment properties could flop, however, if done right, buying the right fixer-upper at a steep discount could net you a major gain on your profit margin.
Remember, the margin is the most important factor in considering investment opportunities because of the corrosive nature of inflation that seeks to drag your overall value down.
5. Find Alternative Investments with high potential
If none of this does much for you there are always the more obscure opportunities out there. Buying high-end guitars, gold bullion, or high-value artwork are all secure investments if you have an eye for detail.
Many alternative opportunities are independent of market fluctuations as well, meaning they rise and fall in correlation with their own set of rules. These commodities all appreciate in value over time, so buying for a long hold is your best bet in this arena.
Whatever your taste, finding the right blend of risk and profit potential is an exciting journey, and will be able to build your wealth at the same time.