Not everyone who is wealthy got that way by inheriting a huge stash of cash from family members, and then sitting back and wasting a lot of it. No, many people who have achieved significant wealth worked very hard to make their first stockpile of money, but then they began to work smart as well.
The key is to make your money work for you, to create what are called passive revenue streams that will not require a lot of work on your part, just a lot of wisdom. Here are five ways to make your money work for you:
1. Save, then invest.
To make your money work for you, there has to be something to work with. In other words, you need some starter money to truly get the ball rolling. It doesn’t have to be a huge amount, but given the savings rates in the U.S., you would be the exception if you saved anything from your paycheck each month and did not go into huge debt. So, if you can master this tough first step, you will be well on your way to making your money work for you. Benjamin Graham and Jason Zweig point out in their book The Intelligent Investor, that there is no set amount that you have to amass before you can make a move, but $1,000 is a nice, round figure to begin with. You can turn that $1K over to someone to invest or do the research yourself and play the market. If you have several thousand dollars saved, you can invest in a business that has caught your eye or an idea that you think will take off. If you lose everything, you haven’t lost much. The next four tips will all depend on you having saved a bit of cash to use.
2. Put some money into a high-yield checking or savings account
Obviously, with today’s microscopic interest rates, you’re not going to get rich quick with this idea, but if you shop around a bit, you can find checking and savings accounts that rise well above the 1% interest rate that is now common.
3. Rent out what you can
A recent Time magazine story documented our nation’s shift to becoming a rental society. That means that if you own items or properties that can be rented, you are in good shape to get a nice passive income stream going. You can rent out a lot more than simply a home, apartment or vacation cabin. You can also rent out furniture, tools, film equipment, parking spaces, just about anything. And, don’t forget—you can certainly put that spare bedroom to work by renting it out and make your money work for you.
4. Share your knowledge on the Web
If you have a great deal of expertise about something, often an area in which you also have a passion, you can definitely make money off of it on the Web. People are looking for great information on how to train a dog, how to take a great photo, how to pick winning football teams, etc. If your life experience has made you somewhat of an expert in a given area, you can make money off of that knowledge. Few bloggers make a living only off of their blogs, but this can be a fun way to generate another passive income stream. If you can start a quality website with good content and are able to draw traffic to it, the next thing you know you are selling tens of thousands of copies of an ebook on your area of expertise as people download it every day.
5. Go gold, silver or blue.
As in: invest in gold, silver, or a blue chip company. Gold and silver rise and fall like any stock, but over the medium term, they always rise. Again, don’t count on getting rich quick with this type of investment, but given time, gold and silver will pay off handsomely and you will be earning money doing nothing. There is actually a hot debate over which of these metals is the better investment, but both are winners. As for blue, look for blue chip companies that have weathered the recession and continue to pay dividends, great passive revenue streams for their investors. Do research and/ or hire a financial advisor that can steer you to blue chip companies that will consistently make money for you.
Finally, one way to make passive income is to sell your smartphone pictures. I haven’t explored this a great deal, but savingadvice.com has a cool article on foap, which is the latest and greatest smartphone app that lets you do this. Evidently, you can get $1 – $5 bucks for every picture you sell. Check it out here: what is foap?
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