While there is plenty of advice out there on how to pinch your pennies a little tighter, you don’t see as much counsel about investments. This is because investments are scary and a little intimidating to consider. What many people don’t realize is that you don’t have to understand the stock market to be an investor. Investors are people who take a calculated financial risk, with the hope that the money they spend will pay itself off many times over in the future. There are lots of ways the average person can do this, 3 of which I’ll discuss below.
- Buy a Home – Not everybody sees home ownership in their future, but its an option that more should consider. There are many arguments for buying a house. For one, you’ll be building equity, not throwing your money in the rent-toilet. Two, your mortgage payments will always be less than you will pay to rent the same property. Three, the interest rates are as low today as they are likely to be in your lifetime. Four, as you develop equity, you’ll be able to get home equity loans, one of the cheapest ways to get money around. Need more convincing? One day, you may even be able to be a landlord yourself, letting other people pay YOU to live in your house. Buying a house is a big expense, but it will pay off in huge ways if you are careful.
- Getting Further Education – If you are out of school, going back may be the last thing on your mind. But maybe its time to look at your likely career path. How much more can you expect to make than you do now? How secure is your field? How satisfied are you with your work? Does your current employer allow you enough time to cultivate your favorite parts of your life? If you are less than satisfied with any of these factors, or others you may think of, it may be time to go back to school. You can choose to advance your education within your field, with a certification or associate’s degree. Or you may decide to strike out on some new course. Whatever the case, try to take on no more debt than you could pay back in two years of working. This may not be realistic for all, but just make sure your debt doesn’t outdo all of the extra pay you’ll be bringing in for your new knowledge and experience.
- Sell Heirlooms and Structured Settlements – Many people have assets they don’t think about a lot. You may have family heirlooms, bonds, or a structured settlement that you could easily sell to bring in extra money. In the case of settlements, sometimes the timing on settlements doesn’t allow you to scrape together a lump sum in order to make real investments. By selling your settlement, you’ll be able to have the money in one place, to do either of the preceeding. Or you can find another savings or investment application for your money. You’ll have to check with the courts on this one, but if you are using the funds to generate more money, they’ll usually sign off on it. The same holds true for your heirlooms, though you’ll have to be the judge on whether its a good idea or not. Just invest the money in something that’ll pay off for you in the long run, and it’ll likely be a good choice.