A Man Alone Can’t Hold an Empire, It Requires a Giant Workforce. Here’s How to Turn Every Dollar Into an Employee.
Aluxers, how often have you heard “make your money work for you?” We’re sure plenty of times, but what does it even mean or are they just loosely thrown around words leading to nowhere.
How could you take $1,000 and turn it into $10,000 without having too much, or perhaps no experience in investing or trading?
We can’t simply move a comma and add a zero; so, what can we legit do that can make our money do a little hard work to benefit ourselves?
Let’s throw around some ideas today, and we’d love your input too.
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With that working for you, let’s dive into the first money secret in today’s listicle.
Look at Money as a Renewable Source
Aluxers, changing your view on money is crucial to starting the process of having money “work for you.” How do people with access to huge resources use them to their advantage? What if you only have a little, can you still make it happen? The answer is a resounding YES!
We’re not simply referring to changing that $1,000 into $10,000 but rather focusing on a financial strategy that will work on both a micro and macro scale.
So, changing your mindset is step 1. Push past the “poor mentality.” Stop telling yourself you don’t have enough time, cash flow, or connections to move up in the world. Begin on a small scale and work your up to bigger, grander investments.
Ditch the idea of getting rich overnight and rather remain focused on your strategy to get there. Forgo deals that seem too good to be true, and with the help of a financial advisor, stick to your goals and plans to get there.
Make Money Work for You
Now’s the time to assign a job to your money. What do you want your money to do for you? You need to provide your money with a job description, so it knows its purpose.
Let’s begin with a simple example.
You pop your cash into a bank account and earn interest on it. Now your money is sitting there, making a small, but steady profit for you.
You put down a payment for a property and you rent it out for the same amount as your monthly bond and interest rate. Here, your money is doing 2 jobs: working as an allocation tool – providing housing for someone and paying off a bond.
You buy ads for your product, track down the profit from ads and reinvest the profit for more ads, and keep repeating the cycle. Here your money is being used to generate a constant flow of income while increasing your interest with each cycle.
Aluxers, you are the CEO of your money – now it’s time to play the role and get things working like a well-oiled machine.
Real Estate Investment Trusts or REITs
When you think about investing in real estate, you generally think of purchasing property, fixing it up and renting it out. And there is nothing wrong with that, as we just highlighted in point number 2. It’s a solid investment, however, it’s a long wait before you’re able to really benefit from it.
If you’re not keen on that path, then consider investing in a REIT. This option provides greater diversification, and offers better returns and generally, lower overall risk.
They’re worthwhile looking into as they generate dividend income along with capital appreciation. Who said you can’t have your cake and eat it? Fees are minimal, and you don’t have to be actively involved in managing the properties!
Need more grounds before you can let your cash roll in that realm? Here are 15 Reasons Why Real Estate is the Best Investment.
You Could Play It Safe
Aluxers, we’re not going to go into too much detail here, but you’re bound to know a little about each of these options. And they’re great if you’re keen to keep a finger on the pulse at all times with your cash flow and how it’s working for you.
Options include the obvious of paying off your debt. It just makes sense. Like the Yiddish proverb says, “Interest on debts grow without rain.”
Another go to option is taking out 401(k) plans which have funds that range from conservative to aggressive.
Bond ladders are a great option for passive income, or you could opt to invest in a high-yield CD. The bonus here is that you can choose an online bank which could offer better rates than your local bank and as long as it’s backed by the FDIC, your money is safe.
Investing in your children’s college education could also reap rewards, but that’s further down the line and you’d need to start while your children are little to really get the benefit of the saving and interest rate. In some places, you may be eligible for tax rebates if you’re making substantial contributions to the fund.
Listen to “You Are a Badass at Making Money” by Jen Sincero. It’s worth every minute of your time and will really leave you inspired to try some options on our list and new ideas by Sincero. It’s available here on audible.com
Dave Ramsey once said, “Earning a lot of money is not the key to prosperity. How you handle it is.” And on your financial journey, there will come a time when you’ll decide that it’s best to park your money.
You will need to be smart about where you park it because financial institutions will be lining up to get to your funds. Don’t be fooled by the razzle dazzle. Chat to your advisor before making any decisions.
These are the areas you’ll need to consider when choosing a short-term savings account.
Access: How often are you going to need access to this account. If it’s 30-day call account, your interest will be higher than one you can access anytime. If it’s a minimum 12-month fixed deposit, the interest could be even better, but then you don’t have the convenience of withdrawing whenever you please.
Interest: This is the most obvious point to consider. Shop around and see who provides the best interest rate.
Penalties: What if something happens and you do need to access your 12-month deposit? What will be penalties be like?
Service: Ask around to see who others have had a great experience with. Often the razzle dazzle salespeople lose their spark and you’re left frustrated, annoyed and without access to your cash!
Aluxers, there’s an incredible true story called “One red paperclip,” and it tells the remarkable tale of a man who bartered his way up from a red paperclip to a house in 14 trades and within a year! Kyle McDonald was inspired by a game he played as a kid called, Bigger, Better.
Maybe you don’t have $1,000 to spare at the moment, so, what do you have?
Here’s where it gets fun!
Perhaps you’re starting a health-screening business where you’re going into corporations and working out individual plans for each staff member to perform at their peak.
You have the skills to do the job well, but you don’t have the budget to invest on an incredible website. So, you approach a website design company and exchange your services for a website. It’s a win-win situation. You get a great website, and they get happy, healthy staff.
The possibilities are endless.
It brings us back to what we mentioned in our first point… What if you only have a little, can you still make it happen? The answer is a resounding YES!
Also known as P2P, crowdlending or social lending, is gaining traction as a solid way to grow your capital.
Before we explain the concept further, if you’re keen to get a loan but want to avoid going through a bank, you might want to consider this option.
So, P2P is an individual or a group of people who lend people money. If you are interested in being a lender, you will need to apply through certain websites and each site has their own rules and regulations.
Since it’s conception in 2005 P2P lending has grown by 110 % yearly! Each lending site differs in their loan rates, eligibility, loan amounts, and clientele.
One major advantage of becoming a P2P lender is that you start earning interest from the first month. So, you can immediately pump your interest straight back into the lending programme.
As an investor, you’d decide what risk category you’d be comfortable putting your money in.
The riskiest options can pay back as much as 11.74 % interest while the least risky can pay around 5% interest.
Swimming Against the Tide
Aluxers, we’re not going to delve into investing here, because at this stage, we already know that if done right, you can make a lot of money.
But where the real money is, is when you’re going in the opposite direction to what everybody else is. It’s all good and well buying stocks because everybody knows those stocks are on a good wicket, but many investors are afraid to invest in a company that is going through a slump. Fickle investors refrain from purchasing shares when the market has taken a knock and prefer to wait it out.
However, this is often a perfect buying opportunity. Shares are more affordable and if you have the time to sit and wait, your money will do the work for you, without you having to lift a finger.
One of the most successful and well-known investors of all time, Peter Lynch, spoke truthfully when he said, “You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.”
Invest in Assets That Will Increase in Value
In our video, 15 Assets That Are Making People RICH, we speak about assets that are making people a lot of money. They include real-estate, bonds, stocks, mutual and index funds, patents, trademarks, royalties, unique rights and Books, Songs, Digital Courses, Information or Content and others.
The point of the video is to provide you with insight that can help you take your earnings to another level, with several of the streams mentioned providing a passive income.
You’ve done the job once, but you keep getting paid for the content. This is a great reminder of how money is simply a renewable source. If you know how to make money, there will always be money. Sometimes you might have more, sometimes less, but accept the ebb and flow of the dollar and with time, you’ll have more ebb than flow with more dollars working hard for you, to earn you even more dollars.
Invest in an Idea That You Believe Has Potential
Aluxers, there’s no point in having a huge bank balance and just hoarding like Ebenezer Scrooge.
What joy will that bring you?
So, here’s a way to let your money do some hard work. Think Shark Tank. Like Kevin O’Leary once said, ‘Here’s how I think of my money: As soldiers. I send them out to war every day. I want them to take prisoners and come home, so there’s more of them.’
Keep up to date with what’s happening in your community. Put your feelers out for something that’s bound to be amazing. Invest in someone with a great idea, drive, and passion, and let that person do the hard work for you.
Give advice, be a mentor, and make money like only a true Aluxer can!
Now, it’s time to put your feet up and leave the working to your money!
What advice can you share with other Aluxers that will make their money work for them? We value your input in the comments below.