You work hard for your money. Why not make your money work hard for you? You can! By investing your extra cash in a host of financial instruments. You might say that keeping your money in a savings account is a safe way to grow your wealth. But remember, the potential for growth of your savings account is limited and its value gets eroded by inflation. On the other hand, investing offers you the opportunity for higher returns over time through the power of compounding. This pertains to the potential growth one can achieve by reinvesting, not just the original investment, but also its interest earnings.

How to get started

Ready to start investing? Before you do, device a strategy to help you achieve your financial goals. While there are plenty of investment opportunities around, the key is choosing what suits you best. Check out these tips to invest wisely:

  1. Invest early – As soon as you start earning, start investing! The earlier you put your money to work, the more time you have to grow your wealth. When you’re young, you can also afford to take more risks as you have more time to ride market swings.
  2. Invest regularly – To steadily grow your wealth, you need to invest consistently every month. Maintaining this financial discipline frees you from the pitfalls of chasing the wrong investment at the wrong time.
  3. Reinvest – Earning interest or dividends from your investment and spending these won’t build your wealth. Instead, make the power of compounding interest work for you. Reinvest the interest or dividends to optimize the value of your investment.
  4. Monitor constantly – Keep track of your investments’ performance. Create a spreadsheet not only for your investments but also for your monthly expenses so you can device a savings strategy to further boost your investment plan.
  5. Keep learning – Understand how your investment works and how market forces impact its performance. Stay tuned to financial news to know the prospects of your investments.
  6. Diversify – Ride the ups and downs of the market by diversifying your investment portfolio. When you put your money in just one type of investment you risk heavy losses when that sector takes a dive. One way of diversifying your investment is to spread it across asset classes. These include stocks, bonds, real estate, exchange traded funds (ETFs), commodities and short-term funds like treasury bills, money market funds. ‘Never put your eggs in one basket’ has never been truer indeed.

Investing in modular

When it comes to investing in real estate, modular homes are the way to go. These factory-built homes appreciate and depreciate just like the traditional on-site built homes. Their loans and mortgages are treated similarly. But unlike their traditional counterparts, modular homes are more affordable and quicker to build. Also, they’re more environmentally friendly and energy saving and could even withstand winds of up to 180 mph. If you want to invest in a modular home, Modular Mastery would be a great place to start.

Invest vs Paying off Debt

When you’re burdened with debt, however, would it be better to put your hard-earned money into debt repayment instead of investments? The simple answer is put your money where it can achieve the best return. So, if you’re considering a stock market index fund with a 10% return but your credit card debt stands at 20%, you’d be better off eliminating your high-interest debt. But if your investments could earn more than the cost of your debts, investing is the way to go. A word of warning though: investments are volatile. The interest you earn in one year may be different in another. While there are other investment options that pay a guaranteed interest rate such as US Treasury Bills, their interest rates are often lower than those of credit card companies and other lenders.

Ideally however, it’s best to achieve a healthy balance between getting out of debt and creating income strategies to build a solid future.