ntent now you may be wondering what does he mean
when he says little money do I need five thousand dollars saved up to start
investing the answer is absolutely not I understand that not everyone has that
much money put aside so the investing methods I will go over will require only
$500 to get started and as your money starts to grow you can decide further
how you want to invest this extra money but Betterman boss I don't have $500 how
can I start investing if $500 is a stretch for you then before you start
investing I strongly suggest you start to employ the cookie jar approach not
familiar with this approach let me briefly explain before you can start
investing you must save up the money to do so unfortunately many people lock the
money saving habits needed to accumulate wealth which ultimately hinders their
ability to invest if this sounds like you don't worry that's what the cookie
jar approach is for the cookie jar approach works by making incremental
contributions to a savings jar you can start by putting away just 10 dollars
per week that may not sound like much but over the course of a year it amounts
to more than $500 which is how much you'll need to start investing in the
ideas I'm about to go over by contributing to your cookie jar every
single week you will start to build the habit of saving which is crucial when
striving to improve your financial situation and hopefully finally reach
financial independence someday in the future now maybe you don't want to leave
physical cash flowing around your house and that's totally understandable the
electronic equivalent of the cookie jar is an online savings account that you
maintain separately from your main checking account the money stored in the
savings account can be withdrawn in two business days if you need it but it's
not linked to your debit card meaning that you won't be tempted to spend
then when the stash is large enough you can take it out and move it into some
actual investment vehicles okay now that you have the money to invest with here
are five ways you can put that money to work number one
investing in real estate when most people think of real estate investing
they think of buying residential or commercial properties and renting them
out to tenants and while this is a great way to make money it isn't the only way
you can invest in real estate there are many options for real estate
crowdfunding and though this may seem like something you'd be nervous about
looking into it actually can be an intriguing investment for instance you
can invest in a REIT or a real estate investment trust and essentially it's a
company that owns or produces income producing real estate you can think of a
REIT as a mutual fund for real estate investing and like a fund the way you
own it is through buying stocks you see when you own stock in a read you were in
a share of the profit produced by that real estate investment it's a way to
invest in real estate without the hassle of being a property owner and every time
profits are shared you will receive your portion of the cash distributed and the
best part was that there was no property maintenance no dealing with tenants and
know chasing rent payments required the company fundrise allows individuals to
invest in commercial real estate online to an eread and the best part is that
starter portfolios begin at as low as $500 making the barrier to entry low
enough for just about anyone to start making money through real estate number
two investing in low barrier mutual funds mutual funds or investment
securities that allow you to invest in a portfolio stocks and bonds with a single
transaction making them perfect for new investors
the trouble is many mutual fund companies require higher minimum
investments which isn't going to work if you are working with a thin budget
luckily some mutual fund companies will waive the account minimums if you agree
to automatic monthly investments of between fifty and a hundred dollars
which will have by leveraging the cookie jar approach the two main benefits of
investing in mutual funds is the diversification it provides and it's
hands-off nature you see when you diversify your investment holdings you
are allocating your money among various financial instruments industries and
other categories by doing this you are investing in different areas that would
each react differently to this same event for instance if one stock you
own declines what an election is called another increases and you were
offsetting your potential losses in fact most investment professionals agree that
although it does not guarantee against losses diversification is the most
important component of reaching long term financial goals while minimizing
risk moreover because mutual funds are typically run by money managers you will
have to exert little to no effort to start your investing journey all you
have to do is set up one time or regular contributions to your investing account
and the money manager will handle selecting the funds that will hopefully
grow your wealth number three investing in Treasury bonds now many small
investors begin their investment journey with the US Treasury securities but that
doesn't mean you can't well investing in Treasury bills will
not make you rich I believe that they are an excellent introduction to
investing and are a great place to park your money until you are ready to go
into higher risk investments Treasury securities also known as savings bonds
are easy to buy to the US Treasuries bond portal Treasury Direct there you
can buy fixed income US government securities with maturities of anywhere
from 30 days to 30 years in denominations as low as $100 now like I
said Treasury bills will not make you rich as the current yield on US Treasury
bonds is 1.5 percent but when you consider that the average savings
account only yields 0.09 percent this is an exponentially better investment
choice for any investor willing to part with their money for a short or long
period of time furthermore what a lot of people don't know is that you can even
arrange to have your money deducted from your pay and invested in these bonds on
a regular basis making it a hassle-free investing process number four investing
in an employer retirement account now if the previous investing options have an
appeal to you don't worry there are other investment vehicles you can use to
grow your wealth some of the most commonly used investment vehicles
include Roth IRAs and 401ks and if you're unfamiliar with them let me
briefly explain how they work with the Roth IRA your contributions are tax when
they're made so you can withdraw the contributions and earnings tax-free once
you reach age 59 and a half this is important because whatever
amount this account accrues to overtime will be the exact amount you'll have
access to when you go to withdraw it and similar to a traditional IRA a Roth IRA
has an annual contribution limit of six thousand dollars a year or seven
thousand dollars for people age 50 or older a 401 K on the other hand is a
retirement plan that is offered by employers which allows employees to
realize tax advantages when used you see normally when you earned money as an
employee you have income taxes withheld on the money you earn a 401 k plan
allows you to avoid paying income taxes in the current year on the amount of
money that you put into the plan the amount you put in is called a salary
deferral contribution as you've chosen to the first sum of the salary you
earned today put it in the plan and save it so you can spend it in your
retirement years then upon retiring you will draw up the amount of money you
need to live from the plan which will hopefully be at a lower tax rate then
you would have incurred when working allowing you to save tax overall once
you have one or both of these funds set up you then need to ask yourself how
involved do you want to be in the investing process if you want your
involvement to start and end with a deposit in your account then using a
Robo advisor to manage your investment portfolio is the way to go alternatively
you can self manage your fund by choosing these specific funds you want
to invest in either way the main thing is that you start letting your money
work for you number five paying off debt the least
obvious and potentially most lucrative way to invest your money is paying off
debt you see when most people fail to realize
is that paying off debt is one of the very best ways to lock it in an
above-average and guaranteed rate of return on your money this is especially
true if the interest charge on your credit card balance is in the double
digits and more likely than not it is as a 20-19 the average credit card interest
rate is nineteen point two four percent annually and no matter how wise of an
investor you are I can guarantee that you cannot secure that high of returns
by placing your money in other traditional investment vehicles one way
to realize these returns quicker and paint out here that faster is to
leverage the power of debt consolidation through a credit card consolidation long
this technique involves moving all your credit card debts onto a single debt
that is subject to much lower interest fees
in fact you can make that balance disappear even quicker if you capitalize
on zero interest credit cards and pay your owing amount before the zero rate
promotion period ends by doing this you are effectively paying down a double
digit credit card balance with zero interest charged meaning that all of
your payments will go straight on to the principal now if you're one of the few
people living without any credit card debt do you have to miss out on this
investing strategy not a chance if you maintain any form of debt then you can
use that debt as an investment tool for instance the same principle can be
applied to a student loan or a mortgage however admittedly the returns will be
far less than those realized on a credit card balance but that's not to say that
they aren't worthwhile investment vehicles let's say you decided to pay
down your 4% mortgage with the investing money you've been putting aside every
month well it may be less lucrative than paying down a high interest credit card
this type of investment can still you have multiple benefits first paying down
your mortgage locks you into a steady return that is much higher than some of
the other investing alternatives I have previously mentioned in this video such
as US Treasury bonds moreover by paying down your mortgage faster you will build
more equity in your home which can be drawn from and used to invest in
equities that yield a higher rate than your current mortgage and interest rate
in short paying off debt is a non-traditional way of investing however
being able to lock in your return and see your credit balance decline will not
only improve your cash position but your financial confidence as well thanks for
watching if you want to go from the life you have to the life you deserve then
hit the subscribe button now
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