We often feel like we need to earn a break, It’s a dream of all of ours to sit back, have our money grow, and be able to experience the fine things in life. It’s pretty universal for all of us to want financial freedom, however often we are left in the dark about how to get there. It feels exclusionary and as many of us often hear “The rich get richer…”. But did you know that you could be growing your wealth without the expensive price tag attached to it?
This week I’m giving you three ways to have your money grow while you sit back and relax… a crazy statement right? It’s important to remember to always take charge of your money and organize it before you start investing or moving money into different areas. If you need additional support with investing, reach out to a certified investor.
Before we begin…
These financial tips and tricks are meant to inspire you to find ways to grow your money. Not all of these tips may work for you depending on your location, needs, or current income status. Understand that to grow money, you must have money saved. What does this mean?
- Learn how to budget. It sounds like a broken record for some of you, but budgeting is hands down the BEST way to be able to jumpstart your path to financial freedom. Check out my other blogs on budgeting and find out what works for you.
- Educate yourself on terminology! The finance world is full of acronyms, words, and phrases that are commonly taught to us in our personal finance courses or even throughout life. Find an educational book, podcast, or website to learn these terms. It will help you when moving throughout your journey!
- Keep an open mind and do your research. All of these ways are backed by financial educators, businesses, corporations, etc. You may need to do some research to find what is best for you and your goals.
1. Earn Over Time: High-Yield Savings Accounts
(Also known as HYSA)
Let’s talk saving accounts! Savings accounts are generally opened when you want to put money aside. You aren’t drawing out of it every week, month, or year. The sole purpose is in fact to save. Now consider these questions:
- Did you open your savings account at a physical location?
- Have you reevaluated your savings rate?
- How many savings accounts do you currently have?
Brick-and-mortar (also known as physical) banks will often often automate a savings account when you open a checking account with them. These accounts are earning anywhere from 0.01%-0.50%, with the common rate at the low end. This means for every $100, the bank will give you one penny. Sounds bizarre right?
Now let’s say you decide to put that $100 in a high-yield savings account earning 4.0%, which means the bank will give you $4. Would you rather have a cent or $4?
Why isn’t this talked about more? This is often considered “hidden” to the general public unless you are seeing a financial advisor, looking purposefully to invest, or have stumbled across one of the apps like Ally, SoFi, Goldman Sachs, etc. Banks don’t want you to know that there’s more money out there when they can keep you at 0.01%!
How do you know it’s legit? Look for FDIC Insured Banks only. This means if anything were to happen to the bank, your money is insured up to a certain amount by the government at no additional cost to you. This is the only way to verify and secure your money in case of an emergency with the bank.
What’s the catch? These accounts are NOT meant to be withdrawn from. Depending on the bank, you may end up having to pay a withdrawal fee- although most will give you a certain amount before that kicks in. Saving is meant to be SAVED! Don’t touch it, keep growing it, and take it out when you need a large lump sum for a car, student loan, home, or down payment.
2. Earn Fast: Certificate of Deposits
(Also known as CDs)
CDs aren’t outdated, and they aren’t “old”. Many new fin-tech banking apps are even beginning to offer Certificate of Deposits. CDs are an amazing way for you to earn high interest on “locked-in” money at a set rate. This choice in investment is a great way for short-term goals. Let’s say you need a set amount of money for that family vacation, or a downpayment for a house in a few years. Find a CD that will give you what you need, based on what you have! The more money you “deposit”, the more you will make back!
So, should I do this or a HYSA? Both! A HYSA is an amazing opportunity for long-term goals and something you can keep growing. A CD is a great chance for you to work on getting a small amount of money fast!
What’s the catch? Withdrawal fees are HIGH on CDs. If you’re going to do it, lock in and wait for the money! If it’s sitting anyway, why not do it?
How long do I have to do it for? CDs can be anywhere from one month, to several years. Depending on the bank and their rates, it may vary. Banks also might offer higher rates for longer periods of time, which means the interest rate won’t change over time- something that HYSA’s may reflect.
3. Earn While Sleeping: Passive, Automated Side Hustles
Did you know you could be making money while you sleep? With the internet at our hands, the power of AI and the intuitive applications to build sites and utilitze tech- side hustles are easier than ever. Consider some of the following for some automated side hustles:
- Website Ad Traffic
- Affiliate Programs
- Digital Products
You CAN make your money work for you, and you CAN earn it while you sleep! Leave a comment below on what you do for extra money or where you may be earning extra!