The phrase “money makes money” is one that you often hear, but how true is this? Many people leave most of their spare money in a savings account, but you could be earning a lot more for your money by moving it around and this could make a big difference to your financial health in the long-term.
The Problem With Savings Accounts
So, what is wrong with savings accounts? Savings accounts are certainly worthwhile for some of your money as they can be easy access, there is no risk that it will decrease and you can earn some interest. The problem is that interest rates are low (especially right now) and this is problematic when it comes to inflation.
So, what are a few alternatives? There are many different ways to make money from your money which can have a big impact on your financial health.
Real estate is always a good area to invest because there is always demand. Of course, not everyone can purchase a property which is why real estate investment funds are worthwhile as a combined source of capital with other investors to make real estate investments.
Investing in stocks can certainly grow your wealth but there will always be risks involved. A safer option is to invest in an index fund. Indices trading involves investing in a large collection of stocks or bonds designed to mimic the performance of a financial market – this allows you to easily diversify and spread risk.
Following this, if you are thinking of investing in stocks then you should also consider bonds which are considered to be more stable. Many investors opt for a balance of 80% in stocks and 20% in bonds although this will depend on your age and appetite for risk.
Forex trading can also be a fun way to make money from your money with the potential for great returns (although there is always risk too). Essentially, this involves trading one currency for another for profit and it is the largest, most liquid market in the world. It is a good idea to use an experienced online Forex trading broker to get started and learn the ropes – you can even use a demo account to get the hang of things.
High Interest Accounts
You can also get more from your money by putting it into high interest savings accounts. It is slim pickings right now as a result of the pandemic, but if you are willing to lock away the money for a few years then you can get some favourable rates.
As you can see, there are a number of ways that you can make money from your existing money and hopefully this post will inspire you to start making positive changes.