how money makes money you can't get wealthy trading your time for money no matter how hard
you work there are only so many hours in a day and unfortunately you won't get paid for the time
you take for rest sleep and other activities what if there's an easier path to wealth what if your
money could work for you what if it could be the perfect employer it doesn't need sleep breaks or
a salary so it is continuously hard at work making more money for you round the clock all year long
fortunately there are many ways your money can be put to work making money for you and while you put
in your 40 hours of work every week your diligent dollars continue working non-stop so in today's
video we will share with you six ways money makes money but before we get into it give this video a
big thumbs up and comment below what video or topic you'd like us to make next now let's get
into it high yield savings account a high yields savings account can serve as a safe base for your
army of dollars before deploying them towards more profitable but riskier ventures high yield savings
accounts are fdic insured and typically pay 20 to 25 times more than the traditional savings
accounts so your money can generate more money while it waits to be called and do other duties
let's say you have an extra ten thousand dollars and not sure yet of the best way to get it to make
money for you keeping it in a high yield savings account that offers an annual percentage yield
apy of two percent will yield two hundred dollars in a year while this is hardly a fortune
it's better than leaving it in regular savings or checking account that offers about 0.1 percent apy
you might as well keep your cash under your pillow as every financial planner will tell you it's
a good idea to have a minimum of six months of living expenses saved up in easily accessible cash
as emergency funds before deploying the excess to make more money for you your emergency funds are
better kept in a high-yield savings account where you can easily access them when the need arises
you can easily open a high-yield savings account where you already bank
however online banks typically offer the highest rate they keep their costs down by minimizing
physical locations and can pass this cost efficiency as higher rates for their customers
before we get into the second strategy i'd like to thank skillshare for sponsoring today's video
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accounts 401ks and iras are the two most important retirement accounts these are investment accounts
and your savings are invested in the market with the promise of exponential growth a 401k is an
employer-sponsored retirement account it's best for people who don't have the self-discipline to
set aside money by themselves since the cash is taken straight from their paycheck with the 401k
you invest pre-tax dollars this means that your taxable income for that year is reduced to get
the best out of your 401k start saving early and as much as possible when you've set up your
emergency funds the next target is to optimize the tax efficiency of the 401k and get your money into
the markets to start making more money for you if your employer matches your contribution go for the
maximum limit so that you don't leave any money on the table after you've maxed out your 401k
start putting your money in an ira independent retirement arrangement or roth ira traditional ira
and roth ira are retirement accounts that you open and fund yourself the difference between the two
is that with a traditional ira you contribute pre or after tax dollars your money grows tax deferred
and withdrawals are taxed as current income after the age of 59 and a half but with a roth ira you
contribute after tax dollars your money grows tax-free and you can make tax and penalty-free
withdrawals after the age of 59 and a half the ira and 401k aren't the only retirement
savings plans out there other lesser-known options to consider include simple ira plans
savings incentive match plans for employees sep plans simplified employee pension payroll
deduction iras profit sharing plans psps health saving account hsa these funds in retirement
savings are typically invested in mutual funds cds etfs stocks bonds and other financial assets
whichever retirement plan you choose to grow your nest egg it makes sense to start early
starting early allows you to leverage the power of compound interest to reinvest and earn from
your earning essentially a snowball effect that exponentially grows your money so you start with
a single investment of twenty thousand dollars on your 20th birthday and it grows at a conservative
five percent annually till you retire at 65. your initial investment will compound to about 90 000
stock market when you have set up maximum permissible contribution to your retirement plans
you should consider investing in the stock market if you want your money to make money for you
however avoid timing the market or day trading that is trading stocks to take advantage of
favorable fluctuations in the market you're better off with a long-term investing strategy also known
as buy and hold strategy this is a conservative approach to investing where you buy security
such as the stock mutual fund bond etf etc and hold on to it for a long time this way
the investment is not subject to short-term market fluctuations as a long-term investor you'll hold
on to your investments with the hope that in the future the sector that you invested in will have
grown substantially you ride out whatever new development that arises over the period with
the hope that in the next 10 years or more your investment must have yielded a reasonable return
with time the fluctuation should even out resulting in an overall gain let's assume
an average annual return of ten percent a ten thousand dollar investment would yield twenty
five thousand nine hundred and thirty seven dollars after ten years even better if you add
five thousand dollars yearly to your portfolio your investment will grow to a whopping 105 624
dollars in the same period suppose you don't have time and skill to handle your portfolio personally
in that case there are now robo advisors which can automate your investment portfolio using advanced
algorithms robo advisors like betterment and wealthfront will create a bespoke portfolio based
on your goals risk tolerance and other preferences they'll give you a diversified portfolio made up
of multiple funds to minimize your risks other ways you can invest your money in the stock market
and have it create more money for you include index funds individual stocks target date funds
and real estate investment funds reits real estate housing is one of the basic human needs
and the demand is always there therefore putting your money in real estate is a great way to get
it to create more money for you you can either invest in residential or commercial real estate
investing in real estate makes money for you in two ways appreciation and rental income
a property appreciates or increases in value with time and you turn a profit by selling
when investing in real estate bear in mind that property appreciation is fast tracked by location
improvements and development location is the most critical appreciation factor for
a residential property when facilities like transit routes shopping malls schools and
leisure facilities spring up around a neighborhood the value appreciates considerably the second way
you can make money from real estate is through rental income your tenants pay a fixed amount
monthly which is known as rent and this applies to both residential and commercial properties
let's take a look at some of the actionable ways you can start earning from real estate
flipping flipping is the process of buying a property improving it within a short time and
selling it off to make money from flipping properties you must have an eye for viable
properties you should be able to easily determine the underlying cost involved in
improving the property to the desired level and its potential value you should also be able to
fix them up yourself or hire a renovation firm buy and hold here you buy a residential or commercial
property and rent it out you can opt to manage the property yourself or get a management agency
to take the stress linked to being a landlord away from you vacation rentals you can earn some money
by renting out a house or room on a short-term basis companies like airbnb have made it easy for
homeowners and property investors to cash in on this by catering to travelers this is especially
profitable if your property is located in a well-known tourist destination the demand for such
arrangements is high as many vacationers prefer it to staying in hotels real estate crowdfunding
this method of putting your money in real estate is especially suited for those who do not have
much access to capital traditionally investing in real estate requires a significant amount of money
this has made the sole preserve of the rich and those with access to financing but in recent
times crowdfunding real estate deals have taken off it involves the process of pooling resources
together to invest in real estate the best part you can start with as little as a hundred dollars
there are many real estate crowdfunding platforms where you can own a piece of high value property
with a mere tap on your smartphone business you can make a whole lot of money by starting your
own business although not without risks putting your money in a startup can pay off handsomely
if you can't stomach the stress of getting a business off the ground you can be a silent
partner by putting down your money in someone's venture you won't have control over the businesses
daily running but if all goes well you will share the company's profits without breaking a sweat
self-improvement another way your money can work for you is by increasing your value invest time
and money in improving your marketable skills and you will start reaping the rewards financially
in no distant time look for certifications and professional degrees that make you a high earner
and highly sought after in your industry and it doesn't even have to cost you a lot
nor do you have to go to an ivy league university and spend four years many online courses offer
you an opportunity to further your education at a reasonable cost and get certified in your interest
areas so in conclusion your money can make money for you if you know how to use it right the tips
above can all be classified as passive income sources that is making money without exerting much
effort the best part about passive income is that you continue to earn once you set it up even while
you sleep sounds easy right still they all require a significant upfront investment in time and money
the list is not exhaustive and there are many other passive income sources out there
however the most important thing is that you now know how money can make money
just pick one and run with it thank you guys so much for watching if you like the video give
it a thumbs up and if you're new to the channel welcome and consider subscribing for more awesome
content like this with that said have a great day you guys and i'll see you all in the next one