Last post I talked about learning to live on 90% of your paycheck and putting 10% away each pay period into an untouchable account. But when I say “untouchable”, I really mean, “not for jetting off on a last minute trip to Mexico or getting those shoes that are sooo cool”. That pool of accumulated money is for several things, but the most important of which is to have something start making money for you. Most rich people are rich because they have employees who make stuff then sell it for them. So now you need to turn your seed money into a team of little Benjamin Franklins out working to generate a profit for you.
How so you may ask? Once you get a little money built up – and it really doesn’t have to be more than $100 – you should invest it or place it in something which gives you back interest. I understand that the stock market is sucking wind like a vacuum right now, but there are still some stocks out there that will hold their value and probably even increase over time. I’m by no means an expert, so this is where you need to do a little research. There are thousands of books and internet sites out there to help you pick conservative but strong stock choices. Now may be a difficult time to consider stocks for many people so another alternative is a CD. You can find the best rates nationwide at several websites including this one Bankaholic – Highest CDs
What should you not do? “Invest” in some fly-by-night scheme that will take away all your hard earned self-pay. Remember when Beanie babies were popular a few years back? I knew folks who paid triple digit prices for some of those animals which you can barely sell for $10 now! Getting rich “quick” usually means getting poor faster. Take your self-pay, put it somewhere safe where it will grow for you. Even if it just grows a little, that’s still money you made without lifting a finger, money that would not have come to you otherwise. Then you’ll have even more money to make work for you, which can then grow… and so on… and so on… This is how rich people get rich and stay that way. They aren’t any smarter than you, they are patient and just follow some good advice.
In my next post I’ll take about the beauty of compounding interest and how it will work for you over time.
