One of the best ways to make money from your money is by investing in a great investment. This doesn’t always mean something you can buy and sell on a stock exchange mind you. This can mean investing in yourself as well. Invest in your education, invest in the new business you want to start up, invest in alternative investments, pay off debt, lend your money to others. The opportunities for investing your money are endless and result in higher returns or lower costs.
No matter what kind of investment it is, they are all important and many people make a return on that initial investment when done so smartly.
This article will list different investments and savings products that can turn money into more money for you, and how they work. There are many people who have turned $10,000 into $1 million or more with these types of investments! If you want to learn about some great ways to make money from money, read on!
Best Ways to Turn Money Into More Money—Our Top Picks
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1. Turn Money Into Money By Investing in Yourself
Investing in yourself is the best first use of your money. It provides you the education and skills needed to make the biggest differences in your life from earning a respectable living, learning how to start investing your money for your short and long-term needs to navigating financial decisions on your own. The amount you invest in yourself compounds more than almost any other investment you can make with your time and money.
The following actions can be easy ways to invest in yourself to learn how to turn money into more money.
The first step in turning money into more money is to make the most of your talents. Consider looking at a few people you admire and learn more about them, their career paths and what they have done to turn themselves into successful people entrepreneurs with lots of resources.
You can also invest time learning how to manage others by reading leadership books or taking courses on project management for professionals. Sending yourself back to school will help you get a better job which could lead you down the path towards entrepreneurship as well as provide some financial stability if things don’t work out like planned.
It’s not just about getting an education either—sometimes it takes only one course series or conference that moves your life in another direction such as teaching yoga classes, starting up a conversation with someone you meet, or building a website for someone.
Libraries, museums, and art galleries are other places to go that offer lower cost classes or workshops on entrepreneurship as well as the arts. Many communities have technology centers with such things like free computers and wi-fi access which can make your research into business ventures easier than it has ever been before.
Regardless of your intended career path, focus on developing your skills and experience to make the most of the value you can offer. For example, if you enjoy writing and think you can make a living doing it, increase your chances for success by perhaps focusing on profitable niches. Instead of targeting just lifestyle content, consider becoming a finance content marketing writer, or looking into tech-related topics as well. These are high-demand niches and can really result in a solid return for your skills and experience.
Earn a High Income
Closely related to career development is working toward a higher income. Income may be the most important factor in your financial future, so always remember this.
When thinking about how to earn a high income, start first by considering what you enjoy doing. Hopefully the two areas align and you’ve got your questioned answered simply by doing what you love.
However, when this isn’t the case, it’ll likely take added work on your part either to find ways to take on more responsibility at your current job or possibly even thinking entrepreneurially about how you can turn your passion into a job- preferably one that pays well.
With these two possibilities in mind, here are some ways to increase your income:
- Negotiate a raise or new position with your current employer if you feel that you deserve it.
- Look for opportunities at other companies by sending resumes and networking. If you leave, don’t forget to send a touching farewell letter to colleagues you leave behind.
- Take on side projects like freelance work or consulting which can bring in additional cash flow.
You should also look into potentially developing these high income skills as part of an entrepreneurial venture (see below). This way, even when there is downtime from your company job, you’ll still have money coming in elsewhere.
Live Within Your Means
Also key to making money from your money is having enough to invest in opportunities through controlling your expenses. That means living within your means. Living within your means can help you to avoid dangerous situations with high-interest credit cards and avoid the temptation to spend money that you do not have. Debit cards can also help.
It can also bring about opportunities you can only seize if you have enough financial wherewithal to act. For example, if you want to leave your job to start a consulting business without a full roster of clients, having a financial cushion to support you in your early days of business is vital. Living within your means allows you to save money and make your dreams into reality.
The first step is making sure your mindset reflects these new goals and financial habits by adopting a more disciplined approach to managing your money. You should always be thinking about what’s most important in life before you make any purchases; even if it feels like a small purchase at the time.
If something doesn’t fit into this list of money goals and priorities (which may include supporting your family, covering expenses of a new business, or setting aside enough money to invest in important things), then don’t buy it! As hard as this might seem for those who are used to feeling entitled to everything they want, practicing discipline when it comes to finances will pay off big over time.
Live Like No One Else
When you choose to develop your career, earn a high income and living within your means, you can live like no one else.
What does this mean? It means that you can live in the moment, without fear because your future is secure. You stop constantly worrying about money and feel confident when it comes to making any purchase or investment decision.
The benefits of living like no one else are countless; from peace of mind knowing you’re not going to go broke over a few thousand dollars spent on something frivolous, to being able to enjoy life much more than if you were always worried about saving for some imagined emergency expense!
When you choose to live for yourself, this means you’ve learned to make money from your money and skills. With enough time and practice, you can turn money into more money all while learning to focus on what makes you happy.
Invest the Rest
Once you’ve accomplished all these steps, you can invest the money you have left over after covering your needs (and some wants). You can turn $100 into $1,000 and even turn $1,000 into more money. Some assets double fast while others move slowly and steadily over time. The money leftover will go into things like stocks, bonds, mutual funds and other investment vehicles that will earn you a return. Over time, these returns should compound and result in real wealth.
You can use free stock apps to cut down on investing expenses and also invest in stocks picked by services providing expert stock advice, index funds for instant diversification and any other number of assets. The extra cash you have left over each month can go into short- and long-term investment accounts to align with things to save up for as you go.
On the short-term front, you will want to have enough liquid assets available to fund an emergency account fully. This will provide protection for those times when unforeseen events happen or you need to make a costly purchase. But, on the long-range side of things, retirement savings are often overlooked because they require discipline and commitment to understand money invested today won’t be touched for decades to come. Having a diversified portfolio of short and long-term investments can allow you to limit the risk in any one investment and take advantage of opportunities that come up.
Now, let’s look at some of the options available for turning money into more money.
2. Build Your Own Company
Relying on the steps above, building your own company can be one of the surest paths to financial success. The world’s wealthiest people have largely built their own companies as a means to generate vast amounts of wealth.
The list of self-made billionaires is a long one, and the age when these individuals built their companies ranges from as early as 27 years old to 82. In other words, you’re never too young or too old to start your own company.
Some notable entrepreneurs who made money from money include:
- Oprah Winfrey, (age 24)
- Bill Gates Sr., Microsoft (age 25)
- Richard Branson, Virgin Media (age 29)
- Elon Musk, PayPal and Tesla (age 27)
Steve Jobs and Steve Wozniak, cofounders of Apple Inc., started their company in a garage at ages 28 and 22 respectively. The company is now worth over $2 trillion dollars!
John Rockefeller was the first billionaire from an oil fortune because he founded Standard Oil Company when he was 50 years old. He became a major philanthropist after retiring from Standard Oil Company as his wealth grew to more than one billion dollars (over 100 years ago).
In today’s economy, many new companies stem from a technological advancement or more efficient way of solving a problem. But you don’t necessarily have to have some high-tech background to start your own company. You can look into existing markets in your area and see if you can take a business model and improve it in some way.
These small tweaks can result in a lower cost of doing business, providing superior customer service and support, or even finding very “sticky” businesses where the changing costs are high. When you find these “sticky” businesses, you can count on customers remaining on board because the cost of switching away from your company are greater than any potential savings a competitor might offer.
3. Invest in Real Estate
You can choose to invest in one of the most popular asset classes: real estate.
There are a number of ways to invest in real estate. They include:
- buying and flipping properties for profit
- purchasing and maintaining a rental property portfolio
- investing through companies like EquityMultiple for commercial real estate, Groundfloor for fix’er uppers, or Fundrise for a diversified portfolio approach
- investing through real estate investment trusts like Streitwise.
The main thing you have to keep track of when it comes to investing is your risk tolerance: How much money can you afford to lose if things don’t turn out as planned? How will this affect the other aspects of your life such as family obligations or career goals? And do you want more stability with low-risk investments, or higher returns with an increased level of risk?
Real estate is a unique investment because it can provide two types of return: an income return from rents paid by tenants and also a capital return as the property appreciates in value. Often, improving these income generating assets increases their property and rental values.
One of the advantages to investing in real estate is that investors can borrow against these assets and use the money for other investments or purchases while still owning them. The leverage can add additional return potential to your portfolio but carries the inherent risk of using someone else’s money to buy more assets.
Invest in Real Estate through Fundrise
Fundrise is a popular online real estate investing platform that allows you to diversify through its numerous funds. Each fund holds a number of properties and is designed to provide varying levels of risk and income.
Among its options:
- Starter and Basic accounts: Investors can now access Fundrise for as little as $10. People who open a Starter account ($10-plus minimum investment) or Basic account ($1,000-plus) have their money automatically invested in the Flagship Real Estate Fund, which seeks a balanced objective of income and growth.
- Core, Advanced, and Premium accounts: Core ($5,000-plus), Advanced ($10,000-plus), and Premium ($100,000-plus) accounts all have access to more specialized strategies. The four primary funds, from low risk/income to high risk/income, are Fixed Income, Core Plus, Value Add and Opportunistic. These accounts also have varying amounts of access to Fundrise’s “eREITs.” Also, Advanced and Premium accounts may invest in the Fundrise eFund, which is a tax-efficient partnership that can also hold non-REIT-eligible assets with “unique potential.”
- Fundrise iPO: This “internet public offering” allows investors to buy a stake in Fundrise’s parent company, Rise Companies Corp.
- Innovation Fund: This fund does not invest in properties, but rather private high-growth technology companies. While the fund expects to focus primarily on late-stage companies, it can hold early- and late-stage private companies, as well as some public equities. (Fundrise would likely invest in these publicly traded companies prior to their IPO, or initial public offering.)
You do not need to be an accredited investor to invest in Fundrise, but several of its funds are closed to non-accredited investors.
Fundrise does share one thing in common with traditional commercial real estate investing, however: It can be highly illiquid. Fundrise itself states that “the shares you own are intended to be held long-term.” You can incur a penalty for selling any eREIT and eFund shares held for less than five years, for instance. Also, you can’t pick and choose what you sell—Fundrise’s “first in first out” system means that when you liquidate, the first shares sold will be those you’ve held the longest.
Even then, commercial real estate remains one of the best alternative investments you can own, and Fundrise helps people easily reap its rewards. Like with owning shares of publicly held real estate, private CRE price returns will often lag a major index like the S&P 500. But the passive income from real estate investing is nice: Since 2017, Fundrise’s average annual income return of 5.29% dwarfs that of both public real estate investment trusts (REITs, 4.1%) and the S&P 500 (2.0%). That includes a 1.5% total return (price plus dividends) in 2022 compared to double-digit losses for public REITs and the S&P 500.
Most of Fundrise’s real estate funds charge an annual 0.85% flat management fee. The Fundrise Innovation Fund, which provides access to venture capital-style investments, charges 1.85% annually.
Visit Fundrise to learn more about this alternative asset class or sign up today.
4. Invest in the Stock Market
A tried and true method to turn money into more money is by investing in the stock market. Many great investors have learned how to make money while you sleep by having their investments make money from money.
You can invest in stocks, mutual funds, ETFs, and other financial instruments to make money from money.
Stocks represent ownership in a company and a allow you to share in the company’s profits. They can be sold for cash at any time if desired and possibly provide a stream of income from dividends.
→ Mutual Funds
A mutual fund is an investment vehicle that pools money from many investors, such as individuals, pensions and endowments, so that capital may be allocated more efficiently than would otherwise be possible. You typically pay upfront, ongoing or backend fees on your investments through these types of funds.
Investing your money into a fund that invests in stocks is one of the easiest ways to turn money into more money with little effort on your part. You never have to worry about which company’s stock you’re going long or short as an investor because it’s all handled for you by the fund manager. This means less work for you!
One of the better options available for beginner investors is Plynk™, an app designed to help you start investing and learn along the way, and they’re currently offering bonuses for opening and funding an account.
The Plynk app helps beginner investors put their money into an investment portfolio. Specifically, Plynk offers access to a selection of stocks, ETFs, mutual funds and crypto—all starting at a single dollar through fractional shares.
→ Exchange Traded Funds (ETF)
A type of investment vehicle that tracks various indexes such as stock markets, commodities or bonds rather than individual securities, like common stocks or preferred shares. There are many different types of ETFs—they vary greatly based on their strategy and underlying assets but most provide instant diversification into a broad range of investments and trade actively on a stock exchange.
You have many opportunities to invest in the stock market to earn money on your money. When you hold these investments for long periods of time, your returns compound, essentially earning returns on your returns. Doing this well and consistently is a powerful wealth building habit. You can even find growth stocks through stock newsletters and useful stock analysis apps. One of the better options available is from Seeking Alpha, an industry stalwart known for empowering individual investors with data, news, stories, and recommendations.
Related: Best Stock Research Websites
5. Lend Money to Others
Being a money lender might not be on the top of your money making list ideas, but banks have done it since the beginning of time. They take deposits held with the bank and lend the money to people who need it for any number of reasons.
With the advance of fintech capabilities, many platforms now allow you to invest money in notes that act as small shares of loans that get made to borrowers. This form of borrowing, called peer-to-peer lending (P2P), first made waves with LendingClub about a decade ago. This platform took investors’ money and underwrote unsecured consumer loans for individuals in need of money.
The default rates weren’t great, largely because borrowers didn’t need to place collateral with the platform before receiving a loan. When they failed to pay, investors lost most of their money.
However, this business model has evolved thanks in part to the rise of cryptocurrencies like Bitcoin, Ethereum and even Dogecoin. Now, there are services that facilitate secured P2P loans backed by cryptocurrencies deposited with the services.
6. Pay Off Debt: Keep More of Your Money
The previous methods all rely on you having money to invest in multiple opportunities. Paying off debt does something related but different: reducing your expenses and giving you more money to invest. Paying off debt leads to less money going out the door and more staying in your pocket to invest elsewhere.
The interest on a mortgage or student loans is simply an expense, while working overtime for living expenses means you are trading time now for potential wealth later: lower-paying work today with potentially higher pay in the future.
In order to make this happen, it’s important that you have some sort of plan for how much you’re spending every month so that there will be money left over at the end of each paycheck. This money can go toward repaying your debt faster and reaching financial freedom sooner. This might mean downsizing to one car if you have two, cutting down cable services so that they’ll only provide internet service (which is cheaper than TV), eliminating unnecessary subscriptions like gym memberships or subscription boxes.
By paying off debt early, you will be able to live on less, giving you more money in the bank so that when it comes time for retirement or unexpected events like a layoff, you’ll have enough saved up.
Consider using services like Splash Financial to refinance your student loans into a lower rate or Tally for consolidating costly credit card debt into a loan with better terms than your current credit card.
Make Money from Your Money
The goal to create real wealth is to make money from your money.
If you can invest in yourself by developing your career, building your income, living within your means, and investing the rest in your own company, real estate portfolio, stocks and loans to others and even paying off debt, you can see how to make money from your money.
With enough time, your assets will compound and you’ll turn money into more money.