Building wealth is a tricky objective to accomplish. Your main source of income probably comes from a job, but if that is not enough to achieve your financial goals, how can you build wealth effectively?
Fortunately, in 2023, there are many paths to building wealth that can supplement your primary income stream. Some of these strategies involve saving your money, while others are all about investing the money you have to bring in more.
This article is meant to introduce you to some financial tricks that you may not know about. Some of them can have a big impact on your future, while others are smaller in scale.
Consolidate Debt
Debt is a part of life. Most people cannot afford everything they want or need with cash upfront, so they will end up borrowing money and agreeing to pay it back. This can happen when buying cars, homes, higher education, or just when using a credit card. The more your debt builds, the higher your monthly payments become and the more interest you have to pay.
Managing your payments is crucial to getting out of debt, especially when you have high-interest debts like credit cards or student loans. You may be able to consolidate your debt into one personal loan with a lower interest rate. This will pay off your debts, leaving you with just one monthly payment that is often a little lower than your previous payments.
Move Money to a Certificate of Deposit (CD)
When you have money saved, it often sits in a savings or checking account doing essentially nothing. Even a high-yield savings account is only going to generate a few dollars of interest over a long period. If you know you won’t need to access some of your saved money for a while, then a CD would be a smart place to put your money. It is essentially a short-term bank account that yields far greater returns from a fixed interest over the course of the term, which could be a few months or several years.
As long as you don’t withdraw the money before the term is up, you are guaranteed to receive those returns at the end. The best rates for CDs can be as high as 5% or 6%, which is much higher than most high-yield savings accounts.
Borrow Fast Cash
Sometimes, you have necessary payments pop up very suddenly. If you do not have money in the right place to cover it, you may worry about adding to your credit card debt or not having enough money to cover the expense. Some online banks will let you borrow cash that is put into your account in mere minutes if you have an account with them. This emergency cash could be incredibly useful if you do not have the resources to cover an important payment. Whether you get a flat tire or a higher-than-expected medical bill, these fast cash tools can make it easier to cover the expense with a fair payback plan.
Invest in an REIT
Real estate is one of the most popular sectors in the investing world. Although housing markets can fluctuate greatly, it is also a fairly reliable opportunity for building wealth. Plus, many types of real estate investing can work well for those with varying needs. One example of a low-risk investment strategy in real estate is investing in a real estate investment trust. This is a firm that manages a broad portfolio of properties, chooses what to invest in on your behalf, and then pays you back with the returns that have been earned.
With so many investors backing the trust and a diverse portfolio, it is a low-risk, low-reward strategy. However, it is also a passive form of investment, so the effort required is minimal other than research.
Download Automated Budgeting Tools
Planning a budget can be complex. If you hate math or dislike looking back at all your finances, the idea of making a budget can be overwhelming. Luckily, with modern technology, a lot of the manual labor that goes into making a budget is automated. Many budgeting apps can access your spending habits through your phone, especially since many payments are electronic.
They can monitor these areas and then lay out how much you spend each month on various products and services. Often, these tools can also make recommendations based on their findings. That means all the hard work normally required to make a budget is skipped and you can get right to the stage where you make changes or set limits on your spending.
A Brighter Financial Future Starts Today
No matter what age you are or where your finances stand, it is never too late to start taking action. You can start saving more money today by investing in a CD or using an automated budgeting tool. Consolidate your debt to lower payments and pay off high-interest loans. Borrow fast cash from an online bank to cover expenses in an emergency. Invest in an REIT to start building passive wealth over time. If you want to upgrade your lifestyle, the best time to start is now.
