Adam Sanders, Registered CPA®

Hey Veterans: Do You Know How To Generate Wealth Starting With Little Money?

Are you one of those hard workers who hope to have wealth when you retire but are feeling frustrated?

Does it seem like a task so daunting that you just don’t want to be bothered with it? Or do you have a little savings stacked up and want to rev up the returns?

If so, then you might be ready to put a portion of your savings to work in slightly riskier ways.  In America, the adage is true: “No Risk, No Reward!”.

But we need to level up your understanding of personal financial literacy concepts make sure you take justifiable risks let’s examine some of the more popular suggested things to do with your money

What To Do To Grow Money Quickly

In the 21st century you have to be financially capable to survive. If you don’t have the ability to make your money work hard for you, it is likely that you will be an employee well into your seventies or eighties.

Some of the more popular trends in wealth building today are trading investments, super savings, and business endeavors. These three are can yield good returns depending on your risk tolerance as long as the proper strategy is applied.

Can I Make Money Trading?

Of the three methods listed in this article, trading is by far the most aggressive and dangerous.  For that reason, we don’t recommend it unless you will be strictly working with 5% of your total liquid assets (meaning cash and investments that can be easily sold).  Why? Day-trading or just having a high trade volume monthly can easily draw an investor into to a gambler’s mentality.

When trying to grow your savings we do not really want to get involved with a game that we aren’t ready to play psychologically.  That said, have people made money by trading stocks and other assets? Yes, of course they have.  But many of those same people bankrupted themselves while learning the game before they went on to have great success.

An interesting book on the subject is called “Reminiscences of a Stock Operator“ by Edwin Lefevre.  It is generally understood that the subject of the book – Jesse Livermore – lost everything in the 1929 stock market crash.  Fair warning!

However, people are always going to be drawn to trading as it can be a way to double, triple, or quadruple your money, but it really does take special skill. Investing as little as $100 can enable you to engage in trading individual stocks.

The basic goal of trading is buying something at a low cost and reselling it for a higher price to generate profit.  If you were a computer or a robot, you could probably do this with a little smart programming.  However, being a human means you are programmed by mother nature to do the exact opposite.

Humans naturally buy when they see others buying (when the price is high) and sell when they see others selling (when the price is tanking big time). This almost ensures that you will lose what’s in your trading account.

There are other paths to take that can lead to wealth and don’t quite expose you to mother nature’s money losing programming built inside us all…

What About Building Up Savings Like a Madman?

If you are looking for the easiest, low-stress way to generate secure wealth, a savings account might be the way to go. Sometimes, there will be deals that banks offer to generate capital by providing a 1% or more interest rate on the amount put in the savings account.

Here’s the deal. That 1% doesn’t seem like much (and to be honest it’s not especially after accounting for inflation), but in 10 years you KNOW that the money you put in will be there.  By that time you will have enough to by a safer money maker like real estate or some other investment that you have taken a long time to study and consider.

Usually, utilizing this strategy for an extended period of time, over 10 years at least, will enable you to generate enough capital to really get into the game of asset building. This type of endeavor requires a slightly larger investment, and therefore has bigger rewards for those who can play.  A great book to give you inspiration to keep to the path is “Richest Man In Babylon“ by George Clason, one of my all-time favorites.

Well, Maybe Starting Up a Side Business Can Make Me Wealthy!

Given that sole-proprietorship is the most common type of a business entity nationwide, there are limitless opportunities to join those who are within this industry.

Whatever you are interested in could, ultimately, be turned into a successful business. The best part of this strategy is that it will not require an enormous amount of capital (that’s money to us regular folks).

If you decide to offer a service in exchange for an hourly payment, or some other type of fee arrangement, you will not need more capital than to advertise that service.

In fact, many people can take the skill they already use in their daily job and sell it as a service to other businesses.  There are many advantages to doing this, not the least of which is reducing learning time doing something new!

On the other hand, when you are selling products, the costs and complexities (and therefore, risks) will be much higher.  When buying things to sell you will have to maintain an inventory so that you can deliver the product to the buyers.

Depending on what you sell, however, the expenses does not have to be tremendous in the beginning stages.

If you start to generate income, you will be able to reinvest it into the business and grow it further. This is how your business will get large enough to provide substantial revenue.

An awesome book for really understanding the entrepreneurial mindset is Robert Kiyosaki’s “Rich Dad, Poor Dad“

Concluding

Regardless of the way you decide to go about building your long-term strategic wealth plan, it should be thoughtfully planned out especially if you need to get rid of debt. An in-depth market analysis should accompany any planning stages, as the lack of it can cause detrimental effects. At the end, you should find what fits your character the best and start making money!

Images: Pixabay CC0

Hey Veterans: Here Are Some Fun Facts About Your First Million Dollars!

I used to think that I would be able to quit work and go live wherever I wanted to when I had a million dollars in the bank. Well, times have changed huh?!

I think we all know that a million dollars just doesn’t go as far as it used to…or does it? When we think of millions of dollars we tend to think only of purchasing power.

However, there are other curious things about $1 Million dollars that can help you put that amount of money into perspective.

For example, did you know:

1. Benjamins Are Lightweight

If you had a million bucks worth of $100 bills it would only weigh 22 pounds?  Pfft…

If your goal was to save ‘a million’ maybe the goal could be counted in pounds instead. It would be very interesting to say to your loved one “Hey hun we’ve saved 19.5 lbs of money! Almost there!!”

But what if you had 22 lbs of gold instead?

2. It Actually Wouldn’t Take Very Long To Get It If Only…

…you could earn $1 per second.  In that scenario you would be a millionaire in only 11 days! For most of us this is not a goal, but it does make you aware that the best way to earn money faster is to multiply our efforts.

This is mainly done by starting a business which allows you to earn money systematically at a much faster rate than as an employee. Of course, this doesn’t include some CEOs of Fortune 100 companies who seem as if they do indeed make millions per month.

See our article on “Do You Want to Know How to Make Money By Blogging?” for more details on making extra money from a side hustle.

3. Mimicking Wealth Is Easier Than You Think!

In America, millionaires prefer Fords, followed by Cadillacs then Lincolns (Ford). So if you are into faking it before you make it and want to seem like “one of us”, then buy a Focus (just kidding!).

4. Inflation Sucks…Royally!

If you plan to retire in 40 years and your goal is to save $1 Million dollars, you should expect that million to have the same spending power as $300,000 of today’s dollars. In other words, you’re gonna need a bigger goal!

5. Higher Education Pays…Sort Of

Roughly 80% of today’s millionaires are college graduates. So does that mean that you must finish college in order to be wealthy? Obviously, there are some notable examples of billionaires who didn’t finish college, but they are outliers.

The widest road to wealth is through higher education which means higher income.  Also, approximately 20% of those college grads have even higher education degrees.  Unfortunately, many people with higher degrees also have insane student debt loads.

6. I Say Sort Of Because:

In the U.S. only 9% of households are millionaires! So even if 80% of millionaires are college grads, at only 9% of households this excludes a majority of college grads as well.

I believe this statistic shows just how difficult it is to become wealthy, particularly through wage labor alone.

Combine this with the average household debt and credit card abuse and you have a recipe for “how not to be rich”. Financial education at an early age is extremely important for increasing this statistic in the future.

7. Apparently, A Million Isn’t Enough

60% of individuals with greater than $1.5 Million saved still imagine working as long as they can. Simply put, these people will probably not live to enjoy their savings.

My hope is that this is not because of some compulsive need to work solely based on habit because if that is true, that would be sad.

However, if working forever is more in line with their goal of providing wealth for the future generations, then the next statistic might sadden them too… Why?

8. Your Kids Are Going To Blow It

It is estimated that 70% of millionaire families LOSE their wealth by the 2nd generation. And 90% lose it by the 3rd generation. I think that along with saving for future generations, today’s millionaire savers should put into place strong financial and entrepreneurial training for their heirs. They should also train the heirs to train their heirs as well in order to avoid having all of their hard work go for nothing.

9. Maybe It’s All About Luck?

Four of the world’s youngest billionaires are somehow attached to Facebook. What does this mean for you? You’ve gotta get lucky!

Err, wait, no…

It means that you should not count on something as random as a corporate lottery ticket to make you wealthy. Having a steady investment and savings plan won’t make a person wealthy overnight, but it is most likely to be a plan has a high chance of success.

10. No, It’s All About Financial Education

If we want to build foundational wealth for our families and for future generations, we have to learn how to earn a lot of money (through sales and marketing of a needed service), then learn how to disentangle ourselves from rampant consumerism and live WAY below our means.

Lastly, we need to learn how to put our money to work making babies.  It’s as simple as that, but life complicates this formula with non-stop commercials, rising costs, and non-increasing wages.

Please enjoy this Infographic and give your opinion on Facebook!

Hey Veterans: Don’t Get Caught Up In The Negative Gearing Real Estate Game

To all my veterans ready to invest all the extra money you’ve earned from your side blog income (see this article) into some hot property in real estate: You’re a wise and knowledgeable investor. You work hard for your money and only want the safest returns possible.

You’ve decided to invest your hard earned money into real estate.

Sounds like a good idea!

However, you must ask yourself before you plunk down that dough, “did I do my money math properly?”.

If not, you just might have set yourself up for a negative gearing nightmare!

Now while brick and mortar purchases can be a sound investment, sometimes these investments can prove to be real money pits.

The trick is to know what pitfalls to look for before you fall down the well.

Negative gearing is a term commonly heard in Australian, New Zealand, or Canadian real estate investment circles.

However, after 2008, many of us US based real estate owners got caught with upside down property values too.

Negative gearing is defined by when a person purposefully gets a loan on real estate (or some other investment) on where the loan payment and other costs amount is going greater than the rents received.

In the past, real estate professionals and other investment guru types would tout the benefits of having a negatively geared property.

The main promise is that you would save a bunch of money on taxes.

The problem with this logic is that for any normal, middle-class person, there is simply no need to avoid taxation in this way.

In most places, having to pay taxes means you actually made money.

This is the first and foremost goal – not to lose money on an investment transaction.

Once that hurdle is cleared, then we can start looking for legal ways to shelter the income from taxation.

But going in the door with the idea that “I’m going to lose money on this–Yay!!” is a recipe for long-term financial heartache and disaster.

Now if you ever find yourself in this kind of pickle the following options may be worth considering:

Sell!

Sell the property and bail yourself out of at least the debt. Most property owners in this situation are already in a bind. Cut your losses and get out of the debt.

You may be iffy when it comes to parting with your nest egg, but selling is the smartest option if you are in over your head.

Furthermore, if you do take the plunge and sell the house, offer it to your tenant first.

After all, they have helped you with the investment, so it seems like the right thing to do.

Try to raise the rent

If you went in for a floating rate on the loan itself, then you might consider raising the rent on the property in question.

While many tenants may leave, you are sure to find one willing to pay the rent set, especially if the property is in a desirable area.

If you do decide to raise the rent, you should exercise caution and consult your tenancy agreement before making the move to up the rent.

Offset the property expenses

Now, this idea ties into the raising of the rent. Most landlords will pay the utilities and just collect the rent, however, these are landlords who are not in your position. Consider having your tenant pay all expenses on the property to ease your own financial burden.

Consider an investor

If you really want to hang on to the investment, but you just can’t see a way out of the hole then you should consider bringing in an investor. Some are put off by the idea as they are afraid of losing control.

If you are one of these people, then don’t fret because you can negotiate whatever terms you see fit. For example, you could have the investor come in with the proviso that you maintain majority share, but they get some sort of return over X amount of time and money invested.

Make sure you find any tax deduction you can!

Tax time is Christmas to the self-employed! With depreciation and home office write-offs, tax time can also be your time to make lemonade from lemons.

Now if you are serious about getting as much as you can back from the tax man, then consult a tax accountant and tell them to leave no stone unturned.

Mileage, auto repairs, phone calls and time spent to “run the property” are always great places to start when looking for deductions.

So much the better if you planned tax-advantaged home improvements like adding solar panels or energy efficient windows.

So those are a few of the options to see you through a rough patch in your investing, consider some of the options above.

Also remember it is important to set the rent amount at least what the loan amount is, otherwise you could be stuck in the investment well beyond the 30-year mark.

Real Estate is a wise investment, so long as you cover your basis and do not borrow against the investment unless you know you can make the return before the interest bites into your profits.

Veterans: Are 401(k) Loans Bad For Your Retirement Future?

Hey my Veteran friends: Do you ever have an itch to get a loan on your 401(k)?

In theory, saving extra earned money (like you could get here) in your 401 K should be something that is easy to do and requires very little thought beyond the setup phase. Set it, forget it, retire wealthy, amirite??

Well, unfortunately life is not as simple as any living human being knows.

It is really, really hard not to gaze longingly at a huge balance in your retirement plan when you have a present need.

Big fluctuations in the market will also have you watching your balances. It can be like a bad roller coaster ride that won’t stop.

Then there are the significant unexpected economic hardships that make you want to break the piggy bank, and the fact that you can get access to retirement savings funds in a 401 k can produce some serious temptation.

On the face of it, taking a loan from a 401 (k) can seem like a logical thing to do.

It can be rationalized by saying “Hey, I am paying 6% interest to myself! What’s better than that!”

Unfortunately, the reality is that most people who take loans against their 401 k plans will lose in the long run.

Here are 5 reasons this is the case:

1.  You Want Tax on Top of Those Taxes?

As explained in the video below, when you take out a loan from your 401 k plan, you, in effect, are paying taxes on your retirement funds twice.

Why?

Because you pay the loan back with after-tax dollars AND you are taxed once you take the funds out at retirement.

This is a serious hidden drag on the amount of money you can have available to you in your retirement years.

Before taking that loan ask yourself: Am I ‘OK’ with paying taxes twice on this money?

Or even better, would I take out a loan at 20% interest to solve my problem?

Most would say “Hell No!” to that question.

Well, you will be paying effectively 28% tax on that money which is basically equivalent to paying a 28% interest rate just to get back to where you would have been before.

2. Hey, Yeahhh..Let Me Get Back…*click*

Most people who take loans against their retirement plans NEVER PAY IT BACK fully. This is because you usually have one to five years to pay the loan back, and nowadays, who stays at their job for five years or more?

Very few people!

So when you leave your job you will be asked to pay the whole balance back or be hit with penalties and fees. So you will be taxed and fee’d to death at tax time for that money. A serious drag waiting to happen.

3. Why Did The Nest Egg Stop Growing?

Most people who take loans stop adding to their 401 k balance. This is because the new focus becomes paying the loan back!

It still FEELS like you are contributing to the retirement account because you are paying some money into it, but you are not adding new investment dollars so the overall pie stops growing until you pay back the loan.

This is a potentially 5 year waste of compounding money growth. If you study compounding you will realize that the 5 years at the end of a 30-year investment cycle can mean the difference between retiring to a wealthy beach lifestyle and retiring while still needing a part-time job to make ends meet. Yes, it’s that serious!

4. If You’re Struggling Financially, This Ain’t Gonna Save You

If your financial situation deteriorates further, say through poor financial decision-making or events such as getting fired, having an outstanding 401 (k) loan adds two additional burdens.

First, is the aforementioned taxes and fees coming due. Second, is that if you really hit skid row, you have already eaten part of the nest egg that could save you from complete financial disaster.

Avoiding complete financial disaster (like the loss of a home while looking for employment) could be a time to break the piggy bank. But if the bank is already broken into, what will you do??

5. So You Made A Series Of Bad Choices, What Do You Think The Next One Will Be?

Taking a loan out of your retirement plan is a huge red flag that suggests you don’t have your financial house in order and are possibly living beyond your means.

According to Investopedia needing a 401 k loan basically means you are just looking for another loan in order to spend more than you are making or have saved for a particular item or situation. In this case, this loan is seemingly more harmless than say a credit card or home equity line of credit, but the end result is still the same: Your Financial Ruin…

Learn More

The video below can provide another viewpoint for a person considering taking a loan against their future retirement income.

So what do you think? Is there ever a good reason to take out a 401 K loan or are they all bad? Comment below or on our Facebook page!

Hey Veterans: Have You Ever Been Confused About The Difference Between An Investor and A Trader?

Warren Buffet (the world’s greatest investor, in my opinion) once said that “Calling someone who trades actively in the market an investor is like calling someone who repeatedly engages in one-night stands a romantic…”

That statement is dead-on. And really funny too!

His point is that investing is an action that is taken with such gravity that it is almost an act of finality.  It’s like you are choosing to get married to the stock, bond or other investment.

Trading, and in particular, active trading, on the other hand, is an activity that can be made on the slightest of whims and can terminate on even flimsier notice.

I like to think of this difference in more down-to-earth terms, and so we have put together this list which is borrowed from the infographic at the bottom of this article to help people really understand the difference more deeply.

1. The goals of trading and investing are basically different.

The goal of trading is to take advantage of temporary inefficiencies in the market and profit in the short term.  The goal of investing is to accumulate wealth over time through the increase in the value of assets which can only be done by holding them for the long term.

2. Different Belief Systems

The underlying belief system of a trader is based on the idea that she can predict the direction of a short-term price fluctuation and take advantage of it.  Investors typically have a deep belief in the intrinsic value of their asset and are only concerned about whether the asset will continue to add to this value.

3. Profit Expectations Differ

The way a trader profits is based on purchasing on a low fluctuation and selling on a “high point”.  This is considered by investors to be a fool’s errand as the short-term market price fluctuations are nearly impossible to predict. Investors want to profit based on the ability of the asset to provide cash flow in the short term and value gains in the long term.

4. Holding Periods Differ Vastly

The holding period of a trader can be as short as a few minutes.  The typical holding period of an investor is greater than one year, and many times, much greater.

5. Profit Expectations

The expected returns of an active trader might be as much as 10% per month.  This is not always reality as fluctuations in market conditions make this kind of return supremely difficult to maintain. An investor might expect between 5 and 15% per year return and would be delighted with a 5% loss if the general market tanked 25% over that time.

6. Tools of the Trade

The analysis tools a trader might use are termed technical indicators which are mostly statistics that are generally based on the direction of price movement.  Investors typically rely on ‘fundamental’ analysis which tries to determine the intrinsic value of an investment based on the cash flow the investment will generate over its lifetime.

7. Tactics

The tactics a trader uses to earn a return is rapid buying and selling of the assets.  The investor’s tactic is to buy an asset at a price they perceive to be significantly lower than the intrinsic value then hold as long as necessary for the market to bring the price to a point well above intrinsic value.

8. Avoiding and Preventing Loss

The trader’s defense against the unexpected might include trying to place sell orders that get them out of an adverse price move.  The investor usually rides out adverse price moves based on the faith that their analysis of the asset is usually more correct than the market’s often wildly inaccurate fluctuations.

If you have other information to share about trading or investing feel free to share in the comments or on our Facebook page. Also feel free to share the infographic.

Infographic: Slideshare.net

How Exactly Did Money Come To Be?

The infographic shown below is a tongue-in-cheek representation of how money has actually helped in man’s evolution while banking has helped speed up man’s devolution.

In a nutshell we can prove the following items beyond a shadow of a doubt…

1. Life was simpler back when barter was the main mode of trade — Image = short caveman with spear

2. Banks started to appear around 3000 BCE in Sumeria and this allowed us to store our hard-won stuff a little more securely, freeing us to wander, or sit about and think, which helped us become more civilized –Image = taller caveman with a straw hat

3. Things start to get complicated when coins were introduced by the Sumerians around that same time – we now see a tall modern man with farm tool

4. Chinese Emporer Hien Tsung issues first known paper bank notes in 806 CE, Europe quickly follows more than 800 years later when Sweden issues the first bank notes in Europe — Image= same height man but now with a sack on his back

5. Great Britain creates the Gold Standard in 1816 allowing people to place more trust in their currency due to the fact that anyone could always trade in their paper (fiat) money in exchange for real gold — Image = man bent under the weight of holding lots of office stuff

6. The US follows suit adopting the gold standard in 1879, but discards the idea a mere 54 years later with advent of the Federal Reserve Board in 1933, an entity that is NOT under the oversight of the government structure and therefore is not bound legally to serve the highest interest of anyone but themselves — Image = a poor guy bent over a plow

7. The first general acceptance Credit card introduced by Diners Club in 1950 unleashing a new, more powerful way to expand the money supply and further devalue the currency — Image = man sitting at a desk (lower than previous guy similar to last person in devolution link)

8. Bitcoin introduced in 2009. Yay! We’re all saved! Or not… (small monkey connected by wires to a computer)

9. Where is money headed next? I am afraid to ask…

Hey Veterans: Here Are The Top Personal Finance Books You Should Be Reading

Are you a veteran who is interested in investing your hard-earned dollars for the future?

Do you want to learn about the pitfalls of personal finance before you risk your hard earned money?

Are you terrified of “losing it all”?

Well, you are not alone.  Luckily for us there are some real experts at gaining wealth that we can lean on to help avoid some of the most common mistakes.

We have done some digging around in the internet and have come up with some awesome books that can ‘level up’ your investing skill-set real quick.

It is clear that a new investor requires knowledge and inspiration to start an investment and stick to it long enough to reap profits. It is wise to read about others who have experienced pitfalls and success so that you can learn from their mistakes!

The better you understand the dynamics of personal finance the better you are able to equip yourself with knowledge that helps you make informed decisions.

The following books are a must read for any investor who desires to be successful.

1. “The Intelligent Investor” by Benjamin Graham

The author of the book is popularly known as the “godfather of value investing. ” He details the history of the stock market for you to understand proper investing in the market. He educates readers on how to analyze a stock. The book gives investors the secret to reaping big gains during the downs of the market rather than being caught up in it.

Graham gives insight into the type of trade advice to keep and which to ignore with his character Mr. Market. This book will keep you engaged and enlightened and thus it’s a must-have if you desire to be a successful investor. Look, this guy taught Warren Buffett what he knows about investing. Nuff said!

2. “The Essays of Warren Buffet: Lessons for corporate America” by Warren Buffett

Who does not know this investment guru? Warren Buffet is an investor who has been writing brilliant letters to his investors in Bershire Hathaway for over 50 years. The book gives his views on a variety of topics. Some of the topics he discusses are accounting and finance, valuation, tax planning, corporate governance, investing, mergers and acquisitions among others.

As a novice investor, this book can help you learn the proper relationship between corporate America and shareholders. The book is rich in ideas that detail the processes of enhancing a company’s value (and hence, your pockets). You cannot go wrong getting some tips from this legend.

3. “Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School” by Andrew Hallam

The author is a teacher who became a millionaire in his mid-30s. He is a self-made millionaire who never inherited wealth nor won a lottery. The book has nine strategies of ensuring that you become a millionaire. It is great especially for the millennials who want to really be rich through debt free living rather than look rich through heavy credit card use.

The author advises investors on what to spend their money on and emphasizes the importance of investing now with what you have. Hallam writes on why one should invest in stock index funds, bond funds, and stocks. A super way to start your investment journey by following the nine steps.

4. “One Up On Wall Street” by Peter Lynch

Peter Lynch is widely recognized as an American business genius. This book emphasizes doing your own research rather than waiting for stock analysts to predict the most rewarding stock for your portfolio.  He advises investors to invest only what they can bear losing and to avoid investing because of the crowd’s seeming current success.

Am I a potential successful investor? Lynch answers this question by outlining the qualities of an investor. The author summarizes the benefits of investing in a company that you believe in and when to sell and when to buy.

5. “Think and Grow Rich” by Napoleon Hill

This books is more about a wealth mindset than actual investing tips.  Rules for success couldn’t be said better than in this, one of the best-selling books of ALL time. Hill describes the path to success which really always starts in your mind.  This success is then propelled by a plan and persistence and a “burning need” to succeed.

He talks about making definite goals and working towards making them work. Hill explains poverty as something that is not planned and changing it requires you to have a clear mindset and to overcome emotions that draw you back.

Final Assessment of Your Financial Reading List

The above are just but a few books available an investor who wants to make conscious and intelligent decisions on the backs of the trials and successes of geniuses. However, the secret is not just reading them but using the shared insights to your advantage.

Hey Veterans: How To Start Investing With As Little As $10

Let’s face it:When you only have $10 invest it may not seem like you have choices.

The money just doesn’t seem like it can do diddly-squat for us but quench our thirst at Starbucks.

However, people who want to attract wealth would do their best with whatever money they have.

These same people are typically surprised at how much a consistently small effort can yield.

Think of ants.  One ant drags a small crumb back to the nest. Doesn’t seem like much right?  But the ant consistently brings back the crumbs when its warm, then eats in the warmth of the ant hill for the entire winter.

Even a person with only $10 to spare will still have options available if they are willing to look around for investing opportunities.

There are a lot of different things to consider, and you’d really have to take a little time to explore your options, but rest assured, they are out there.

Consider an App for Investing

One thing that a person with $10 to invest needs to do is consider an app that will allow them to make better investment choices.

Investors have to take the time to explore the app community because there are many options out there.

When thinking about how to invest  $20 or so, try reviewing some apps that allow people to put their money into multiple funds through a diversified portfolio. A little bit of money is placed into a series of different investment opportunities.

These are the type of apps that people want because it gives them a chance to diversify even if there is no large sum of money available to put into a single investment. People that invest this way will be surprised about the returns on investment that they can have.

Savings Accounts

There are some that put their money into a savings account. This is something that can be tricky because most savings accounts really do not have a high rate of return.

Fortunately, there are online banks that have much higher interest rates than a typical brick-and-mortar bank.

People trying to invest money that only have $10 may consider this as an option but we don’t recommend it due to inflation and the current low rate of interest.

There are banks that can provide higher returns on interest, and it gives people the chance to save more money over the long run with low risk, but even this “high” rate of interest, quite frankly, sucks in today’s environment.

If you continue to save on a regular basis you may, however, have a decent amount of money at the end of the year to transfer from savings to an online stock investment account.

A $10 savings may not seem like a lot of money to invest, but if this is $10 a month  this is a total of $120 for the year.

A person that has $10 that they can invest for each week will have a total of $520 for the year. This can be a significant amount of money that can be earning interest in an online banking account.

Invest in Yourself

When your funds are tight and you are actually trying to learn about making small investments for beginners it can be tough. Turning this small amount into a significantly bigger amount will take more than slow growth bank interest rates.

To make your money double or triple in a short time period a person may need to consider investing in their own skills.

Someone that can draw or do things creatively may consider taking the money and investing it in supplies for artwork.

There are apps that allow people to freelance and sell the type of work that they are doing to potential customers online. This is great because it actually allows so many people to turn their skills into something that is profitable.  Think Uber.

If you are thinking about investing this $10 it may be to your advantage to actually invested in yourself and buy things that can help you make money in other ways.

This is ultimately going to be the fastest way to turn this $10 into more money than you may have been able to save on your own.

There is always a possibility to make more money when you invest in things that can return your profit. It just takes a little time to get what works best.