3 Smart Ways to Put Extra Money to Good Use
Some people are struggling with challenging financial issues – reduced income, increased expenses, huge debt burdens, and gloomy financial futures among others. Others are in a better place financially – they are free of interest-bearing debt, their income more than covers their expenses, and they have emergency savings funds.
However, financial experts tend to focus their efforts on how to provide help to people who are struggling financially. Nonetheless, everybody could use a piece of financial insight irrespective of the size of your wallet. Some people need help on how to make money while others need help on how to keep the money they’ve already made. This piece provides valuable insights on how you can put extra money to good use.
Put money into a smart savings strategy
Many people invest their money savings account but we know that the average savings account only keeps your money safe without much of a yield. You should consider putting your money into a high-yield savings account. The savings could be targeted for 5-year or 10-year milestones for predictable future expenses. Such expenses include weddings, kids’ college tuitions, vacations or a new luxury car. Some financial institutions have specialized accounts for “targeted savings”; hence, you’ll find the necessary help you need to start saving towards your goals.
Pro Tip: you should consider setting up automatic deposits into your targeted savings account. Setting up automatic deposits makes it easier to save money because you won’t be tempted to spend the money. Automated savings moves funds out of your regular account into a savings account before you’ve had a chance to touch the money.
Expand your retirement portfolio
You can’t have too much money in retirement; hence, it doesn’t hurt to start applying your extra money towards increasing the size of your retirement portfolio. You’ll most likely have a 401(k), 403(b) or IRA retirement fund among others. You can reach out to the firm holding your retirement fund about your desire to increase/expand your portfolio.
Depending on much you have in extra money, the bank might ask you to add the extra funds into your existing portfolio or they could open new lines of investments for you. Some of the new lines of investment include buying into the IPO of new firms, developing a balanced CFD trading portfolio, or helping you invest in funds that have proven records of outperforming the market.
NikolayFrolochkin / Pixabay
Take bigger investment risks with the guidance of financial advisors
The Return on Investment (ROI) that you can expect on any deal is usually directly proportional to the inherent risk in the investment. Hence, low-risk investments will yield low returns, medium-risk investments will yield moderate returns, and high-risk investments will yield high returns. You might want to start considering some medium to high-risk investments if you still have some money left after settling all financial obligations.
Of course, you’ll need to seek the guidance of trustworthy financial advisors who will act in fiduciary if you want to take on risky investments. Some of the investments they might advice you to take include the following:
- Investments in emerging technologies
Bitcoin, Blockchain, Artificial Intelligence, Virtual Reality, and Augmented Reality are some of the emerging technologies that could cause massive disruptions in the world. An educated investment into these emerging technologies could pay exponential returns when they eventually hit the mainstream.
- Investments in emerging markets
A simple glance at the Silicon Valley startup scene will reveal hundreds of companies working towards a paradigm shift to disrupt industries. From fintech to medical technology, you’ll find startups where your money could be put to good use. Outside national borders, Asia, Africa and South America are catching up in industrialization and technological growth – you could invest in those markets after due diligence.
- Real estate
Subject to trustworthy advice and up to date market information, you may want to consider putting your spare money into an investment property. You build or remodel a piece of real estate. You can expect rental income as well as an increase in the value of your investment as the real estate market continues to boom.
