In today's video, we're going to talk about how to use your savings to
make more money.
If you have money sitting in a savings account, it is time to put that
money to work.
I'm going to share the steps on how to use your savings to make more
money.
And then I'm going to share how I became a millionaire by doing this.
The first thing we want to do is to assess our financial goals.
What is it you want to achieve with your savings?
Are you saving for something specific like buying a house or starting
a business?
Or are you saving for long-term retirement?
Understanding what your financial goals are is going to help you
choose the best investment strategy for yourself.
For me, I've had different financial goals throughout my life.
One of those goals has been to purchase rental properties by knowing
exactly what my goal is, I know how much I'm going to need for a down
payment, so I know how much money I need to save.
So make sure you are setting your financial goals and having them be
specific so that you know exactly how much money you are going to need
for those goals.
The second thing we want to do is make sure that we have an emergency
fund.
We want to have money in a savings account for emergencies that come
up.
And honestly, it doesn't have to just be in a savings account.
You could have it in CDs, in certificates of deposit, or you could
even have it in bonds, but something low risk for your emergency fund
that you can pull out if you need to because we never know when an
emergency is going to happen.
I like keeping my emergency fund in a simple savings account.
I use Ally.
They have a higher interest rate on their savings.
It's at 3.4%
right now, so at least have your emergency fund in a high yield
savings account so you can earn a little bit extra on that money.
And then number three on how to use your savings to make more money is
exploring mutual funds.
So exploring the stock market.
There are two main types of mutual funds.
One is an actively managed mutual fund, which I would stay away from
because they have higher fees and their returns do not outweigh their
fees.
These second kind is index funds.
These index funds are a type of stock market investment that tracks
something else.
For example, they could be tracking the s and p 500, so they would
include 500 different companies inside of this one single index fund.
This is a good way to diversify your investments but also keep things
really simple.
And if you are doing this right, you are definitely going to make more
money by investing in index funds than by keeping your money sitting
in a savings account or even in a CD.
Another option on how to use your savings to make more money is by
investing in exchange traded funds.
ETFs.
They are similar to mutual funds or index funds and the fact that they
are tracking something else, they are tracking an index, but they
trade like a stock.
So once you purchase or sell an etf, that order goes through
immediately.
ETFs offer the potential for a higher return and can be a great way to diversify your portfolio.
When you buy an index fund, the order goes through at the end of the
day, and with an index fund, there can be a minimum to get started
investing.
But with an etf, it is just the price of the etf, which it could be
around a hundred dollars or a couple hundred dollars depending on
which ETF you are investing in.
And if you're wondering about the differences among mutual funds,
index funds and ETFs, I do have a video for you.
I'll leave a link above.
You can watch that later on.
Another way to use your savings to make more money is by investing in
real estate.
Investing in real estate can give you higher returns sometimes than
the stock market, but there also is risk associated with that, and
it's not as passive as stock market investing.
But if you do want to stick with just stock market investing, you can
invest in what's called a reit.
It's a real estate investment trust.
It's a type of fund that you can purchase in the stock market.
And that way you wouldn't have to manage physical properties yourself.
But if you are considering that, I would keep an eye on those expense
ratios for the reit.
Sometimes they can be quite a bit higher than a typical index fund.
I personally like investing in actual physical properties when
investing in real estate.
I've been able to purchase four properties, and I did sell one of them
not too long ago.
If you are curious why I have a video about that, I will leave a link
above.
But investing in real estate has created cash flow for me, and I've
been able to see appreciation of those properties over time.
And not only that, but I can also have tax write offs.
There are deductions I can get by investing in real estate.
And while it is more work, I have found it to be worthwhile.
Another way to use your savings to create more money is to start a
business.
You could put some of your money from your savings into a business.
If you have that entrepreneurial spirit and want to start something
that you are passionate about or that you know you can do a good job
with, you can put money toward that and start creating money in your
own business.
And if your business continues to grow and you are successful with it,
that can have a really high return on your investment.
And of course, it is a lot of work to start a business, but if that is
something that you want to do, then you can definitely do that.
You can put your savings toward starting your business.
And if you keep at it, you can really grow your business and it can be
worthwhile.
And then number seven on using your savings to make more money is by
investing in education.
Of course, this is not going to pay off right away, but if you are
investing in things that are going to help you make more money, then
it will pay off over time.
And this includes learning about investing your money.
If this is something you are interested in, I do have a free
masterclass about investing in the stock market, I will leave a link
to that below in the description.
But honestly, the more you can learn about investing or about making
your money work for you, then the more money you are going to make as
long as you are taking action on the principles you are learning
about.
I've invested in different educational programs.
Yes, I do have a college degree.
I studied marketing and I do have an mba.
I've also invested in courses that helped me with specific things that
helped me grow my money.
And you can even learn by an expensive books or podcast or YouTube
videos.
And if you are looking for another good book about investing, I do
have my brand new book that I published.
I will leave a link to that below in the description and you can
definitely read that and become more knowledgeable about investing.
These are some different ways on how to use your savings to make more
money.
If you found this video helpful, please hit that like button and share
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Thanks so much for watching.
I'll see you in the next video.