With the current bleak job market and low prospects for wage growth, people are rethinking their approach to personal finances. For some, this means brainstorming creative ways to generate additional income and grow their assets.
However difficult these times may be, it’s crucial to be proactive about your finances and plan to ensure your future financial security. Several approaches can help achieve this goal, and the best method will vary depending on each person’s unique circumstances. However, some strategies may be more effective than others. Here are five unique strategies to expand your assets:
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Streamline your cash flow
A key element of effective asset management is having a clear understanding of your cash flow. This means knowing how much money is coming in and going out monthly. Once you have a good handle on your cash flow, you can make adjustments to ensure that more money is going into savings and investments rather than being spent on unnecessary expenses.
One way to do this is to set up a budget and track your spending so that you are aware of where your money is going each month. Money hacks like the 30-day rule can also help curb impulsive spending and redirect cash towards your savings goals. Remember that even minor changes to your spending habits can make a big difference in the long run.
Invest at least 10% of your income
Consistently investing a portion of your income is one of the smartest things you can do to grow your assets over time. Investing allows you to take advantage of compound interest, which means that your money will grow exponentially, the longer you leave it untouched. Even if you can only put away a small amount of money each month, it will add up over time and have a big impact on your financial future.
If you are unsure where to start, plenty of resources are available to help you start investing. You can open an investment account with a broker or robo-advisor, or invest in specific stocks or mutual funds that align with your financial goals. The important thing is to make investing a regular habit.
Make smart financial choices
In addition to investing, you can make other financial choices that will help you grow your assets. One example is taking advantage of employer-sponsored retirement plans, such as 401(k)s or 403(b)s. If your company offers matching contributions, this is an especially valuable benefit that can help you boost your savings.
Another option is to open a high-yield savings account or money market account, which typically offers higher interest rates than traditional savings accounts. You also need to be mindful of both the short and long-term effects of your decisions. For example, incurring debt may be necessary, but it is important to understand how this impacts your finances down the road.
Start a side business
With the rise of the sharing economy, it has never been easier to take a more active approach to growing your assets. Various platforms allow you to monetize your skills and talents, such as Airbnb for hosting travelers, Uber or Lyft for ride-sharing, etc.
Not only can starting a side business provide extra income to help grow your assets, but it can also be a fun and rewarding way to use your time. Before you begin, do your research because there are various expenses and variables to consider (such as insurance). But if you have a unique skill or passion that you’d like to share with others, starting a side business could be a great way to do it.
Save for retirement
Invest in your future by saving for retirement as soon as you can. The sooner you save, the more time your money has to grow through compound interest. This will also give you a cushion through a compound safety net when things get tough down the road. Make sure to have an emergency fund that covers three months’ worth of income.
There are a few different retirement savings options to choose from, such as IRAs and annuities. You can also create your retirement savings plan by investing in specific stocks or mutual funds.
The Bottom Line
No matter how dire your current finances may seem, it’s never too late to begin saving for your future. The earlier you start, the better off you’ll be in the long run.
The key is to make financially sound decisions and follow these tips to ensure a prosperous future for yourself and your loved ones. And most importantly, find what works best for you and stick with it. With discipline and commitment, anything is possible, including hitting those tough financial targets.
About Carson Derrow
