• Treavor Dodsworth

#143 - 5 Ways to Put Money to Work


5 Ways Money Works

Many have heard the general idea to "put money to work." There are an unlimited number of ways to put this into practice.


Generally, it is good to evaluate these options in regards to your goals and the risk/reward principle- the possible return you can receive should match the level of risk you are taking. Below are five ways to use your money to work for you:

  1. Savings Accounts - As interest rates have risen, the return on savings accounts has risen as well. I am not saying you should have all your money in savings accounts but technically it is a way your money is earning you a return- albeit a small one.

  2. Bonds - Bonds are when you loan someone money and then they pay that money back with interest.

  3. Stocks - This is when you buy ownership of a company.

  4. Real Estate - This can be done in a variety of different ways- buying distressed property and fixing it up, buying a commercial or residential rental, etc.

  5. Business - Some of the more wealthy people in America have become so by starting one or multiple businesses. One interesting thing about a business is occasionally the valuation of that business is based on the income it is receiving. In other words, when a business grows not only does the business owner’s income grow but also their net assets.

Financial advisors frequently focus on the stock and bond market but there are many ways to use one’s money to work for them. The power of compounding really comes into play when you do this sooner rather than later.

 

Interesting Articles/Videos

Ron Blue Institute


CNBC - IRS interest rates jump to 6% on October 1st

  • The IRS has been considerably slow in processing returns. One nice thing to note is many of those expecting a refund will receive interest in addition to the refund. Somewhat interesting, it is actually a higher rate of return than most (if not all) savings accounts.

 

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