قالب وردپرس درنا توس
Home / Business / 3 Ways to Make Money From You – The Motley Fool

3 Ways to Make Money From You – The Motley Fool



For best results when playing most games, think strategically. It's the same with your financial life: With a small strategy you can make the most of your money – and make more money.

There are gobs ways you can put your money on to work for you rather than just buy something or park it in a savings account that pays very little interest. Here is a look at three powerful ways to build wealth and future financial security.

  A paper plane folded out of a $ 100 bill flies toward a blue sky.

Image Source: Getty Images.

No. 1
: Pay Your Debt

There is a good chance that you carry a little or a lot of debt, and much of it can be on high-interest credit card accounts. You're not alone, though. Per the Experian Credit Reporting Agency, the average American consumer recently had a $ 5,551 balance in credit card debt. Many households have two or more such people and therefore have $ 10,000 or more in debt.

What does your debt burden have to do with putting your dollars at work? Well, think of the payout as a kind of investment – in the other way. If you owe $ 10,000 or $ 20,000 and you pay an unusual interest rate of 20% on your debt, it's $ 2,000 or $ 4,000 you reject to the credit card company every year – in interest alone. The long-term average growth rate of the stock market is close to 10%, and only the best investors can hope for an average of 20% (with most not achieving it).

Nevertheless, credit card companies get that kind of return you. If you retire that debt, you will stop spending 20% ​​every year and it will be very much like earning a guaranteed 20% return. You will keep it $ 2,000 or $ 4,000 in your pocket instead of sending it to your credit card company, and you can deploy it against retirement savings or other goals.

Paying debt, even mountain debt, is frightening, but it can be done. A first strategy to try is to negotiate with your credit card company. Call and ask if it will lower interest rates. Surprisingly, many lenders will agree to do so if you have been a loyal and good customer to stay around.

No. 2: Invest in dividend-paying shares

Another powerful way to put your money into working for you is to invest in dividend-paying shares. That's because they offer a dual-way way of earning – from dividends and share price growth. For best results, reinvest these dividends.

The first dollars you spend on shares of dividend payers will kick dollars to you in the form of dividends. Use this money to buy more shares in dividend payers, and these dividends can generate more dividends.

Look at the 20 year average annual return on some known names in the table below and see what a difference reinvests dividends does: [19659015] Company

Recent Dividend

20 Years Average Annual Growth Rate, Dividend Not Re-Invested [20%AverageAnnualGrowthRateYieldReinvested

Boeing 2%

13.6%

15.5%

NextEra Energy

2.7%

11.3% 14% 3M 2.8% 9.9% 11.4% McDonald's 19% 19%

8.5%

%

10%

Chevron 4% [%] 7.8% 9.5%

United Technologies 2.3%

8.4%

] 9.4% Raytheon 1.9% 7.3% 9.2% Clorox 2.5% 5.9%

] 7.4%

Target

3.5%

5.6% [1,965,902 1] 6.1%

Source: Yahoo! Finance, TheOnlineInvestor.com.

If you have a high retirement allowance and you can keep $ 400,000 in dividend payers with an average return of 3%, you set yourself up for $ 12,000 in annual income – about $ 1,000 per month. Even better, the sum is likely to increase, as healthy and growing dividers increase their payouts regularly.

  A blue paper copy of an umbrella is shown, with the word annuity printed on some white paper beneath it.

Image Source: Getty Images.

No. 3: Buy an Annuity

Here's another great way to put your money on the job for you: Use it to buy one or more annuities – the fixed, as opposed to the variable or indexed species. It's like buying yourself a pension, as an annuity from a solid insurance company can deliver revenue to you for the rest of your life, and depending on the terms you pay for, it can increase your payments to keep up with inflation and can continue to Pay your surviving spouse after you died.

Below are some recent annuity notes, using the latest interest rates. When interest rates are higher, the listing time will also be higher.

Person / People

Cost

Monthly income

Annual income equivalent

65 year old man

$ 100,000

] $ 561

$ 6,732

65 years old woman

$ 100,000

$ 538

$ 6456

70 year old man

$ 100,000

$ 644

$ 7,728

$ 7,728

] 70 years old woman

$ 100,000

$ 609

$ 7,308

65 year old couple

$ 200,000

$ 967

$ 11,604

70 year old couple [19659066] $ 200,000

$ 1,064

$ 12,768

75 year old couple

$ 200,000

$ 1,217

$ 14,604

Source: Immediateannuities.com, February 21, 2019. [19659002] It is also smart to consider a deferred annuity (sometimes known as life insurance), which will start paying you at a future date. For example, a 60-year-old man can spend $ 100,000 for an annuity that will start paying him $ 1,003 per month for the rest of his life from the age of 70. An overall retirement income strategy to consider is to buy a deferred annuity (or two) to start paying you enough to live at the beginning of a particular time in the future, and then use the rest of your nostalgia to support you to that point.

It's smart to look at the finances regularly to make sure you're on the track saving for a comfortable pension. One or all of these three strategies above can help you build a more financially secure future by setting your dollars to work for you and establishing critical revenue streams.


Source link