You have probably been told that to be financially secure, you need a savings account or an emergency fund. Although this is correct, it’s only a step towards attaining financial freedom. You should go a step further by finding out ways to be financially buoyant without necessarily enslaving your entire youthful life. Making your money work for you while you sleep, go to work or indulge in a passion, is the smart way to go.
Here, we have identified five ways to make your money work for you:
1. Get rid of debts
Unless you are running a private enterprise that requires you to loan money with the guarantee of business expansion, you have no business accumulating debts.
Debts encroach into your savings and suck the life out of it. For you to build a system where your money works for you, you need to first get rid of debts.
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2. Have a pension account
It all seems like a glorified savings account that will be collected upon retirement and old age, but the good thing about it is that your employer (if you have one) sponsors part of it. Plus, it allows you to save up a piece of your paycheck before taxes. Taxes aren’t paid until the bulk is withdrawn from the account. So, register with a licensed fund administrator that helps you invest your pension, in treasury bills and the like.
3. Own a savings account
Savings can never be overemphasised. Without savings, investments will be almost impossible.
A certified financial planner and wealth strategist, Sean Gould, explains that before you send your money to do the heavy lifting, you’ll want to have an emergency savings account of about six months of living expenses stored in cash.
4. Be a partner in a business
Starting your own business requires time, effort, discipline and resources. If you don’t have all in place to start your own business or perhaps have no desire to do so, consider investing in successful business ventures where you don’t need to contribute to the day to day running of the business. Rather, you would be a silent partner who contributes financially. As the business grows, so does your purse. Note that if the business does poorly, you will also be affected. So, choose wisely!
5. Invest in real estate
Investing in real estate can be quite lucrative. It is cool to save up to buy a plot of land or a house for yourself. You can, however, hasten your step towards financial freedom by buying plots of land and selling or renting them, while their value appreciates.
The downside to Real Estate is that returns may not materialise immediately, so it might take some time to get an income from your investment Other than that, you are in business!
6. Invest in financial markets
You can also invest in the stock market, bonds, treasury bills and develop streams of passive income. To do this effectively, it’s advisable to engage the services of the right Asset Management firm.
There you go, it’s time for your money to start working for you.
Saved enough yet? Are you ready to invest and be financially free? Let’s hear from you in the comment section.
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