We could all do with more money in our bank accounts, but sometimes it seems as if we are spending more than we are making.
However, there are ways to build wealth, rather than suffer from the leaking bucket that is our bank balance. In this article, we will give you some guidance on how you can build up your finances to give you a more stable future.
Investing in the stock market
You won’t make a quick buck when you invest money in the stock market, and you are essentially gambling. However, making the right investments could set you on the road to wealth and financial security.
On the flip side, putting your money into the wrong stocks can lose you a fortune just as easily. You need to do your research, as this isn’t something you should jump into blindly.
Read this guide to help you know the basics, and then decide whether it is something you can legitimately afford to do.
Invest in bonds
Investing 10k in a bond can make you a sizeable profit from the interest, and help you preserve your initial capital. You won’t get as big a return as you would from stock, but you will also get less sleepless nights as bonds are a safer investment.
There is more information here on why bonds are something you should consider, though you need to know you might also be liable to pay taxes on the money you earn.
Save for retirement
Unfortunately, getting older is something common to all of us. When we are young, saving money may be at the back of our minds, but it is something we should all take seriously when preparing for retirement.
A tax-deferred retirement plan will help you save faster, meaning you pay taxes back at a later date, possibly at a lower rate when you begin to draw from the pension fund.
You may have an employer who pays into a pension fund for you, but it is still worth topping up the fund from your income. In any case, be it a company pension or personal pension plan, you shouldn’t rely on social security for your retirement, as the payback will be minimal.
Buy your own home
Always consider buying your own home rather than renting. There will be a time when your mortgage will end, whereas you will be paying rent indefinitely. Houses do depreciate, but you can raise the value of a property to ensure you won’t face a shortfall when deciding to sell.
Stop wasting money
We all waste money, but there are many ways we can cut back. Track how much money you are spending, and evaluate how much of that money could have been better spent elsewhere.
We can also be prone to temptation. From the latest cars to the newest tv’s, there are many items that we would like but don’t really need. They all depreciate rapidly, and sometimes the cheaper option is to wait a couple of years until they come down in price.
The other way we can waste money is on our utility bills. You may be able to find a better deal elsewhere, so use a price comparison service and save yourself money by switching to a new provider.
Deal with your debt
Debt comes in two forms. Secured debt includes using our homes or cars as collateral, and there is unsecured debt, such as taking out a bank loan or credit card. We can’t always avoid certain debts, such as mortgages, but there are ways we can manage them.
For starters, shop around when looking for a loan or mortgage. Banks will offer different interest rates, so go for the lowest you can find.
Should you find yourself having to manage a number of debts, you could amalgamate them into one monthly payment. This is especially useful for those of you dealing with a number of credit card payments each month.
Find a loan or credit card with lower interest than what you are currently paying, and you will pay the debt off sooner. It is also possible to refinance your mortgage and pay it off over a shorter period when you find a better rate.
Careful investing and savvy saving techniques will help you build wealth. Be wise with your money, and seek further advice to help you avoid running into trouble.