A higher income can welcome a better quality of life, more money to set aside for savings, and more money to invest. You can’t go wrong with a solid stream of profits. Whether you’ve got a considerable amount of money put by for a rainy day or you’re living paycheck-to-paycheck, it’s always a good idea to grow your income. It’s especially important now when job security is on the line and the economy is headed towards an uncertain future. The following are some tips to help you grow your income quickly and exponentially.
Start investing the moment you start earning
The best way to grow your income is to start doing so as early as possible. The minute you begin earning, you should already be looking into areas where you can invest it. Even before then, it would already be helpful to reach out and talk to professionals who know the best places to put your money such as real estate agents, true ECN brokers, accountants, and more. Even if you failed to get a head start on investing, it’s never too late to begin your financial journey.
Find a side hustle
A side hustle can be a great way to generate a passive income. Passive income is an income stream that can sustain itself and provide you with a steady influx of profits without requiring a ton of effort on your part. Opportunities for passive income generation include affiliate marketing, creating an online course, developing a mobile app, publishing an ebook, and renting out property.
Automate your savings
The less you have to do to save money, the easier it will be for you to amass a huge cash reserve. Automating your savings turns setting aside a portion of your income for reserves into a monthly expense. It’s much like paying your bills, except you’re essentially paying yourself. Your money is bound to grow much quicker this way since you’re immediately curbing the temptation of spending it all in one go.
Make use of tax-advantaged accounts
Tax-advantaged accounts are investments, retirement plans plans, or financial accounts that are either tax-deferred, tax-exempt, or provide other tax benefits. Examples of such accounts include workplace 401k, 403b, IRA, SIMPLE IRA, or a Solo 401k if you’re self-employed. Using these to your advantage will help you grow your money exponentially while simultaneously reducing your tax bill in the long run.
Stay away from investment funds with high expense ratios
Different investment funds charge varying fees which are factored into something called an expense ratio. High expense ratios mean that the fund charges investors a high fee to manage either a mutual fund, investment portfolio, or an exchange-traded fund (ETF). The expense ratio is determined by dividing operating costs by the value of assets in the fund. At the onset, a fee that charges you 1% to 2% seems small, but it can add up as you go along. Make sure to opt for funds with low expense ratios so you can make the most of your investment. A recommended expense ratio is between 0.5% to 0.75%.
Make your money work for you by keeping these practical tips in mind when trying to grow your income.