In order to grow your money, you need to use the money that you do have to create more. It’s about becoming proactive and finding ways to grow your money. This can be done through investments, savings, side hustles (above and beyond your day job that helps you generate money) and more.
The goal is to use your labor to create a dollar and then find ways to make that dollar multiple so you don’t need to simply keep expending your energy to generate more money.
8. Only borrow money for items that can appreciate in value
The concept of borrowing money is pretty common place these days. In years gone by people like our grandparents would only ever borrow money in order to buy assets that would (potentially) appreciate in value; for instance the family home or startup capital to begin a business to generate more money.
These days however we have people borrowing money to make impulse purchases. People use credit and borrowed money to buy new TVs, flashy cars, engagement rings and more; all the while loading up on debt that will one day haunt them.
If you want to grow your money; avoid debt. Use it strategically and while you cannot guarantee that even a house will appreciate in value; it has a better chance of growing in value than say a television. The old good debt, bad debt methodology really applies here. If you must borrow money, use it to invest or potentially grow your money (while seeking financial advice to protect and conserve your appetite for risk).
7. Don’t leave coins and notes around the place; make them work for you
Hoarding gold coins and putting the odd $5 note into a piggy bank can be motivating, but it is hardly working hard for your personal finances. The money is sitting idle; it’s neither earning interest nor saving you interest by sitting at your front door with your keys and bag.
Aim to regularly deposit coins, notes and extra money you come into straight into your savings account or straight onto your debt. A dollar on your debt will save you interest. A dollar in your high interest savings account will earn you some interest. No matter how small the savings, it is better than nothing and will add up over the course of your life.
Make every dollar work for you. For instance, you could have your $1000’s of dollars in expenses sit idly in your bank account until they are direct debited; or you have that money stored in your mortgage offset account, saving you interest while still sitting ready to be debited.
6. Every pay rise, use 50% of the new incoming money to grow more money
It can be hard to sacrifice existing expenses; so why not aim to simply save a portion of every pay rise instead of finding things to go without? Every time you get a pay rise, you are essentially earning extra money that would otherwise not have been accounted for.
It’s hard to miss something you never had which is why this strategy has worked so well for many people. Say you begin to earn an extra $100 a month, simply take half of it and save or invest it. You won’t notice it is missing and you won’t get a chance to assign it to some new expense you don’t actually need.
5. Starting a blog to make passive income
Start writing about something you are passionate about. Start a blog and begin typing. It’s amazing how much you might have to say on a topic and it can end up becoming popular and generating a passive income that has the ability to send money straight into your bank account.
The trick is to blog about a topic you care about and have a lot to sayon. You can then look for ways to make money from the content via ads, sponsorships or products you can sell.
There are people out there making $5,000 to $50,000 a month by simply running a range of blogs.
For those interested in starting a blog, check out 31 days to build a better blog by Darren Rowse, aka Problogger.
4. Buying and selling items for a profit
Council pickup days and scanning sites like Gumtree lets you find potential bargains that may possess no value to the owner anymore, yet could yield you a profit if you found a buyer.
It’s all about connecting the dots and finding people who want things that other people don’t. You can also buy items from Gumtree that are discounted for quick sales and then find an appropriate buyer later on.
3. Investing in shares
Buying shares for the long term has proven a good strategy for many past investors. While past performance isn’t an indicator of future returns, investing in shares allows you to use your money to chase a capital gain (through the share price going up) while in some cases getting paid a dividend (a share of the profits) that sees the growth of shares often outpace inflation and that of general savings accounts.
In saying that though, there is more risk in shares than that of a high interest savings account.
Investing in quality long term big Australian companies that are not speculative in nature and you full understand can yield positive results for investors. You can effectively use your money to make more money by owning a piece of a big, successful company. You can even ‘double dip’ by investing in companies that you regularly use; you are then technically spending with a company that is in turn making more money, which has a positive impact on your investment.
2. Buying an investment property; getting on the property ladder
While investing is never guaranteed to make you money (you could also lose all your money), many people have grown their wealth by investing in a property, leasing it out to tenants to help cover the mortgage and sitting tight in the hope that in 10-15 years the property itself will have dramatically grown in value to generate a capital gain when they sell.
There are people out there that have failed terribly at this, there are also people out there that have walked away with sums of money like $150,000 in cash (after tax) that is then ready for their next purchase, investment, parcel of shares or business opportunity.
With property, most people will tell you it’s all about just simply getting on the ladder. For instance, property in a neighbourhood near me went up by 40% in 3 years. Someone who hasn’t entered the property market essentially has no ability to save or grow their money at that rate which in turn puts them further behind.
1. Using compounding returns to become a millionaire
Compound interest is the essential guide to building wealth and growing your money. Basically, your money earns more money, which then increase how much money you have and this process then starts all over again constantly.
Your money compounds, your money gets larger and larger and the interest you earn in turn gets larger. It really is magical.
[Source: Grow Your Money: 8 Effortless Ways To Grow Your Money by AJ Wilson.]