When it comes to personal finance, one of the biggest conversations has always been about active vs passive income. Knowing about their differences and how to use them in your life will help you succeed with money and create a more stable financial situation. Keep reading to learn more!

What’s the difference between active and passive income? Which one offers more benefits? What are each’s pros and cons?

And most importantly, how can you generate either or both?

I will answer these questions and give you a comprehensive guide on using passive income vs active income so you can start challenging yourself to reach your financial goals!

What is active income?

Active (or earned) income is what we earn from working. It could come from our jobs, businesses, or side hustles. This type of income requires ongoing effort to maintain and grow.

Active income examples

Active income can come in many forms, but all of them require, as the IRS phrases it, material participation in the income-producing activity. This essentially means, you’ve actively participated in generating this income.

Examples of active income sources include:

Job income

Earned through employment, such as a regular paycheck from a full-time job, tips for service jobs, or commissions for sales positions.

Business profits

Earned through business activities, such as selling products or services, the owner actively manages and makes decisions for the business.

Freelance income

Earned by providing freelance client services on a project-by-project basis rather than as an employee.

Consulting income

Earned by providing expert advice and guidance to clients on a specific topic or industry.

There are other sources of earned income, but those are four of the most common.

Advantages of active income 

The primary benefit of active income vs passive income is that it provides a regular stream of income that individuals can rely on.

Whether we work a job, run a business, freelancing, or consult, we can generally count on receiving a consistent paycheck or payment for our work.

Disadvantages of active income

The most significant disadvantage is that it requires time and energy.

You must actively work and put effort into your job or business to earn income. It can be time-consuming and limit your ability to pursue other interests or hobbies. And you only have so many hours in the day to earn money this way.

Additionally, your income may be interrupted if you become sick or cannot work.

How is active income taxed?

When you earn an income this way, it will usually be subject to federal, state, and local income taxes, and also Social Security and Medicare taxes.

The amount you owe the IRS each year will depend on several factors, including your income level, filing status, and any deductions or credits you’re eligible for. 

What is passive income?

Passive income refers to earnings generated without ongoing active involvement or effort. Usually, this income requires an initial investment or some hard work to set up—but once that foundation has been established, it continues to generate income largely on its own.

Passive income examples

Passive income can take many forms, but here are a few of the most common passive income sources:

Capital gains

Profits that result from the sale of an asset, such as stocks, real estate, or other investments. It is the difference between the purchase price and the selling price of the asset.

Stock dividends

Payments made to shareholders by a company from its profits are called stock dividends. They are typically paid out in cash or stock and paid quarterly or annually.

Interest

Earned from lending or having money in an interest-bearing account, such as your savings account or a CD, or from peer-to-peer lending.

Royalties

Payments made to a patent, trademark, or copyright owner for the right to use that intellectual property.

Rental income

Earned from renting out a property, such as a house, apartment, or commercial space.

For more details, explore our list of 30+ specific best passive income ideas.

Advantages of passive income

One of the primary benefits of passive income is the ability to earn money while you sleep. If you also have a full-time job, your passive income sources can make extra money while you work, which can turbo-charge your financial journey.

Passive income may provide a stable source of income without requiring continuous effort or work.

In my opinion, this benefits those who want to supplement their earned income streams or retire early.

Another advantage of passive income is that it can be location-independent in many cases. Once you’ve set up the income sources, they’ll continue running automatically no matter where you are, so you can earn passive income from anywhere in the world.

Disadvantages of passive income

One of the biggest drawbacks is that passive income can be less reliable than earned income.

Some passive income streams can fluctuate or disappear altogether, making it difficult to rely on them as a steady source of income, so you may need to create multiple sources of income.

Additionally, passive income often requires an initial investment of time or money upfront.

For example, starting a rental property business requires a significant cash investment to purchase, make necessary repairs, and market it to potential renters. You may also have to hire landlords or property managers if you don’t want to handle those responsibilities yourself.

Tax implications of passive income

While earning passive income can be a great way to build wealth and achieve financial freedom, it’s important to understand how it’s taxed.

In most cases, passive income is subject to federal income tax and state income tax in the state where the income is earned. 

However, the tax rate for passive income may differ from what you pay on earned income, depending on the type of passive income and how it’s earned.

For instance, capital gains from investments will be taxed differently based on whether they’re short-term or long-term capital gains (basically, whether you held them for less than a year or not).

Qualified dividends are taxed at a lower rate than ordinary income, but non-qualified dividends are taxed at the same rate as normal income.

Most interest income is subject to ordinary income tax rates. However, certain types of interest income, such as municipal bond interest, might be exempt from federal income tax.

If you have specific questions about how the Internal Revenue Service taxes active vs passive income sources, it’s best to consult with a qualified professional.

The differences between active and passive income streams

With a basic understanding of each type of income under your belt, we can now look at the differences between active and passive income. It can help you determine which types of active vs passive income might be best for your lifestyle and goals.

1. Earning potential & scalability of active income vs passive income

The first factor you will want to consider is the difference in earning potential and scalability between active income vs passive income sources.

Active income is limited by hours and education

Your earning potential from earned income is limited by the amount of work you put in.

For example, working full-time has a cap on earning potential based on hours worked and your hourly wage or annual salary.

Creating professional goals and working on educational advancement can increase your earning potential, but these require more time and effort. Additional education or training can lead to higher-paying jobs but require significant investment and may impact your work-life balance.

Passive income has fewer limitations after the income source is set up

This sort of income stream generates revenue without ongoing active participation, which makes it attractive.

For example, rental properties generate income each month when tenants pay rent. Successful blogs and online courses can generate income through advertising, affiliate marketing, and sponsored content.

Scaling is possible by expanding the source of income, creating additional streams, or purchasing a new income-producing asset.

Although a significant upfront investment in time and/or money is required, passive income sources may provide reliable and consistent income for long-term wealth once they’ve been established.

2. Investments of time and money for active vs passive income

Next, something I would consider is how much time and cash you’ll need to initiate and sustain active vs passive income.

Active income only makes money with constant effort and time

Earned income needs consistent time and effort for revenue, meaning stopping work stops income. It requires steady work to ensure regular income, involving a significant investment of time, energy, and ongoing education to maintain earning potential.

Pursuing higher education or training courses can be costly but lead to higher salaries and better job prospects.

In addition, ongoing development and training help you maintain earning potential and stay ahead of industry trends.

This income usually has minimal initial financial investment if you’re getting a traditional job or starting a side hustle. But starting a business or higher education may require steep upfront costs, such as equipment, marketing, tuition fees, or loans.

However, these investments can pay off in the long run by increasing earning potential and career advancement opportunities.

Passive income requires time and effort but not consistently

My thought is you’ll almost always have to make some kind of initial investment to start earning passive income, but some methods require less capital than others.

For example, if I purchase real estate investments, it requires more work upfront than becoming a stock investor.

Further, passive income requires significant time and effort to set up, including research, planning, and creating a product or service.

However, once established, it provides steady income with little ongoing effort.

Passive income can offer greater freedom and flexibility than traditional income streams.

With passive income, individuals can generate revenue even when not actively working. It can allow for a more flexible schedule and the ability to pursue other passions or interests.

3. Risks of passive income vs active income

Finally, research the risks of active vs passive income before going all-in with an opportunity. There is a large difference between active and passive income regarding risk.

Active income has risks like loss of larger income or potential failure

Earning active income may seem less risky, but it still has inherent risks.

For example, the fixed salary or wage in a contract means few opportunities for additional revenue, making it difficult to increase earnings even with more time and effort.

Plus, entrepreneurship or starting a business with no money involves significant risks. It requires a substantial investment of time, effort, and money, and the risk of failure is always present.

In addition, unexpected factors, such as changes in the market, can impact your career success despite careful planning and research.

Active income streams can also lead to burnout and career stagnation. The demands of a job can cause a lack of work-life balance and affect mental and physical health.

Without growth opportunities, employees may feel unfulfilled, decreasing motivation and earning potential.

Passive income has risks that may be beyond your control

Passive income streams require an upfront investment, which can be risky if returns are unstable.

For instance, investing in rental properties or stocks may be profitable, but the market is unpredictable. There’s a risk that the value of something you bought as an income-producing asset (like a rental property or dividend stock fund) will decline instead of increasing.

Further, some passive income sources require a certain degree of maintenance, which may result in revenue loss if not properly handled.

For example, rental properties require tenant management and upkeep, while investment portfolios may require monitoring and adjustment.

Expert tip: Diversify your income sources

Passive vs active income doesn’t need to be an either/or situation: I think there’s room for both in your overall financial plan! And the more income sources we all have, the less vulnerable we’ll be to any risks.

For example, if you lose your full-time job, but you have a side gig and income-producing assets, you’ll be in a better position to afford your bills while you hunt for a new opportunity.

On the other hand, if you only have one source of income, you’ll be completely reliant on that source. If it disappears, you’ll have to scrape by and deplete your savings as you live without a job.

How to use both types of income in your life

Most people’s ultimate purpose for their money is to grow it throughout their lifetime, using it to fund their various financial goals and retirement. 

The good news is that both types of income can work together to help you grow your money and continue generating more! You can:

• Use active income to generate passive income
• Use active income to generate more active income
• Use passive income to generate active income
• Use passive income to generate more passive income

No matter what approach you take, these strategies are great ways to increase your wealth. Let’s look at how they work.

Using active income to generate passive income

While earning an active income is important for paying the bills and supporting your lifestyle, you can also use that money to build long-term wealth and financial freedom by investing your earned income in assets that generate passive income.

Simply funnel a percentage of your active income toward your passive income. This could be anything from saving up a down payment for a rental property to purchasing dividend-paying stocks or investing in index funds and bonds.

Another way to create passive income is by starting a business or side hustle. For instance, starting an online store or blog, or writing an e-book.

Using active income to generate more active income

You can use your existing income to create more active income!

A good way to do this is by investing in yourself and your career. This could mean taking on additional work or side hustles to increase your income or investing in education and professional development programs that can help you earn more money in your current job or industry.

Using passive income to generate active income

Did you know you can also use passive income to create active income streams?

One way to do this is by reinvesting your passive income into opportunities that generate earned income. For example, something like starting a new business or launching a new product or service would make sense.

Using passive income to generate more passive income

With a little bit of smart investing and dedication, you can use your passive income to create a powerful snowball effect of passive income that grows over time and supports your financial goals.

One way to do this is by reinvesting your passive income into more passive-income-generating assets.

Another way to use your existing passive income to support your financial journey is by using it to get out of debt or reduce expenses. By paying off high-interest debt or decreasing your monthly bills, you can free up more money to invest or save for retirement.

Is rental income active or passive? 

Rental income is typically considered passive income. Because once the property is set up and rented out, it will generate income with minimal ongoing effort.

However, if you don’t have a property manager, you’ll have to manage it yourself and be responsible for the tasks that landlords handle, so there is still some active participation involved. These tasks might include maintenance and finding tenants.

Ultimately, if you can afford to outsource the labor, which I recommend, you can make it as active or passive as you decide.

Is it better to have passive income vs active income? 

Ideally, you should have a mix of both, especially during your career years. But it’s particularly important to constantly build up your investment portfolios and other passive income sources.

That way, you can eventually quit your full-time job, retire, and live solely on your portfolio income and other income producing assets. The question of whether to make passive income vs active income isn’t an “either/or” answer but a “both!”

What are the differences between passive income and earned income?

Earned income is money you have to make using your time and effort consistently, and passive income requires less ongoing effort.

Earned income is the same as active income, which is money you receive in exchange for your labor (through a job, side gig, etc.). It’s very common, and many people rely on it.

Passive income comes from sources that don’t require much ongoing effort. Instead of you making the money, your income-producing asset or investment makes the money for you.

Articles related to various income types

After learning about the various ways to earn money, you might want to know more. Check out these articles next!

• 30 Best Passive Income Ideas
• How To Start: Passive Real Estate Investing
• The 3 Main Ways To Create Multiple Sources Of Income
• 17 Best Passive Income Books To Inspire You!

Active vs passive income: leverage both to achieve your financial goals!

The difference between active and passive income is that they present two very different routes for making money.

But both can be incredibly lucrative depending on your preferences, goals, and financial capabilities. For some people, a mix of passive and earned income may be ideal. Others may prefer to put all their effort into generating passive income streams.

Understanding the differences can help individuals make more informed decisions about their income strategies. And creating various income streams can increase financial stability and independence.

The post Active Vs Passive Income And How They Work For You appeared first on Clever Girl Finance.

Picture this: you’ve just received or saved $20,000 but are unsure what to do with it. You could spend it on a luxurious vacation or a new car, or you could invest it wisely to set yourself up for financial stability in the future. So, let’s find out the best way to invest $20k!

In this article, we’ll discuss ideas for different investment strategies that suit varying financial goals, investment time horizons, and risk tolerance levels.

You will better understand the various investment options available when you’re trying to figure out what to do with 20k. And you’ll also discover their benefits, risks, and how to approach the decision-making process.

​​So, without further ado, let’s explore what to do with $20k!

Short-term strategies to invest $20k

Short-term investment strategies are designed for those who are looking to invest for a period of up to two years.

They are a great option if you want to save for a specific goal.

For example, if you’re saving for a house down payment, a wedding, or a vacation.

Short-term investment strategies are also great for building your emergency fund—as long as they aren’t too risky.

Common examples of short-term investments include:

• High-yield saving accounts
• Money market funds
• Peer-to-peer lending

High-yield savings accounts

If you’re looking for a safe and straightforward way to invest $20k, a high-yield savings account may be the way to go.

A high-yield savings account is like a regular one.

However, it has a higher interest rate, allowing you to earn more money over time.

But unlike other investment options, there is no risk of losing money due to market fluctuations.

However, you should make sure your high-yield savings accounts are FDIC-insured. The federal government will protect your cash up to $250,000 for each depositor, per ownership category per insured bank.

This is why high-yield savings accounts are a popular choice regarding short-term investment strategies. I personally keep some of my short term savings in this account type.

They are a low-risk, low-stress way to earn interest on your money without tying it up for an extended period.

Money market funds

Regarding short-term investments, money market funds are an attractive option for those who want to earn a higher return on their money than they could with a traditional savings account.

A money market fund is a sort of mutual fund that invests in short-term and low-risk securities. It could include assets like government bonds, certificates of deposit, and commercial paper.

Another advantage of money market funds is that you can usually access your funds quickly and easily. However, this usually isn’t the case for longer-term investment strategies.

So, if you’re looking for a low-risk, low-volatility investment that offers a stable return, a money market fund may be the best way to invest 20k to meet your financial goals.

Peer-to-peer lending

When it comes to short-term investment strategies, peer-to-peer (P2P) lending is an innovative option. It offers a unique combination of high returns and low risk.

P2P lending connects borrowers directly to investors without an intermediary financial institution.

In other words, YOU become the “bank.”

By cutting out the middleman, P2P lending allows investors to earn higher returns than they would with traditional savings accounts.

Plus, you choose who you invest with, making it easier to put your money where your values are. That said, it is still very important to do your research when it comes to P2P lending platforms to determine if this is the best way to invest 20k for you.

Mid-term investment strategies to invest $20k

Mid-term goals and investment strategies are suitable for those looking for the best way to invest $20k for two to five years.

It’s a good strategy for saving for a child’s education or starting a business.

Common examples of mid-term investments include:

• CDs
• Robo-advisors
• Index funds
• Mutual funds
• Exchange-traded funds
• REITs

CDs (Certificates of Deposit)

CDs, or Certificates of Deposits, offer a safe, low-risk investment option with a guaranteed return for your mid-term financial goals.

A CD is a deposit account that typically offers a set interest rate for a specific term, such as six months, one year, or two years.

As with high-yield savings accounts, one of the primary advantages of CDs is that they are FDIC-insured.

CDs also offer higher interest rates than you’d find with traditional savings accounts. It makes them a good option for those looking to earn more money on their investment.

The bank also guarantees interest earned, regardless of inflation volatility.

Which is good for those looking for a guaranteed investment return over a specific period. You can also check out other ideas for the best compound interest investments.

Robo-advisors

With user-friendly platforms, diversified investment portfolios, and 24/7 access to your investments, robo-advisors provide a convenient and cost-effective way to grow a $20k investment.

Unlike traditional brokerages, a robo-advisor is a digital investing option that provides automated investment management services.

It uses complex algorithms to create and manage a personalized investment portfolio based on your short and long term financial goals, risk tolerance, and investment timeline.

Plus, because robo-advisors eliminate the need for a traditional financial advisor (who will typically charge high fees for their services), you can access professional investment management services at a fraction of the cost.

As an added perk, robo-advisors are designed to make a well-balanced portfolio of investments across different asset classes, which can help mitigate risks and increase returns.

Index funds

With diverse investment options and high transparency, index funds are a reliable and proven way to invest $20k for mid-term purposes.

The best index funds are an aggregation of stocks, bonds, and other securities. They track an index, depending on the index fund, such as the S&P 500 index.

When investing in index funds, you can access various investment options. It can help you spread your investment risk and maximize returns.

Plus, because they’re passively managed, index funds are known to have significantly lower fees than mutual funds. Still, index funds can offer very strong investment returns over time.

Moreover, the prevalence of index funds is high. Whether you’re looking for a conservative, low-risk investment option or a more aggressive investment strategy, there’s likely a fund out there that meets your needs and can be the best way to invest 20k.

Mutual funds

Unlike index funds, which are passively managed, most mutual funds are actively managed by a dedicated mutual fund manager.

If you learn how to start investing with mutual funds, your cash will be pooled with other investors’ money and then invested in different assets, like stocks and bonds. To get started, you’ll need to check out brokerage accounts and open one.

Mutual funds are one option for figuring out what to do with 20k if you want to work with a mutual fund manager. But bear in mind that mutual funds come with much higher fees than index funds or ETFs. In the end, these fees can cut into your returns over time.

Exchange Traded Funds (ETFs)

With their low fees, flexibility, ease of access, transparency, and potential for long-term capital appreciation, ETFs can provide a reliable investment strategy that aligns with your financial goals.

In some ways, ETFs are similar to mutual funds. ETFs and mutual funds are a collection of securities that can provide diversification and risk management benefits.

However, ETFs trade on an exchange like a stock, allowing you to buy and sell them throughout the trading day at market prices.

Compared to actively managed mutual funds (which require professional management and research), ETFs are typically passively managed. As a result, their management fees are much lower, allowing you to keep more of your returns.

Moreover, investing in a diversified portfolio of ETFs can minimize the risks associated with individual securities and market volatility, thus potentially achieving steady returns over the long term.

REITs (Real estate investment trusts)

If you want to invest $20k for mid-term purposes that provides regular income and capital appreciation (and is great for real estate beginners), investing in real estate investment trusts (REITs) could be a great option.

REITs own, operate, and/or finance income-producing real estate, such as shopping centers, office buildings, apartments, and hotels.

By investing in REITs, you can gain exposure to the real estate market without the hassle of buying and managing physical properties.

Importantly, when you invest in REITs, you also get to invest in various property types and geographic regions, allowing you to diversify your portfolio and minimize risk.

Best of all, REITs are required by law to give at least 90% of their taxable income to their shareholders as dividends, providing investors with a reliable source of income. So, if you’re looking to build a passive income stream, REITs might be the best way to invest 20k to meet your financial goals.

You can buy REIT ETFs directly in a brokerage account or use tools like Fundrise, an online investment platform designed to help individuals invest in real estate and venture capital without big fees.

Long-term strategies to invest $20k

Long-term investment strategies are the best way to invest $20k for five years or more. They are a great option if you’re looking to build long-term wealth, such as saving for retirement. The new contribution limits for 2024 for IRAs and 401ks are listed here, according to the IRS.

Common examples of long-term investments include:

• Retirement accounts
• Real estate

Traditional IRA

A traditional IRA allows individuals to contribute pre-tax dollars, which can lower their taxable income for that year.

Then, the money grows tax-deferred until withdrawal in retirement, when it is taxed at the individual’s tax rate. It can be advantageous because you’re more likely to be in a lower tax bracket when you’re a retiree than when you’re a working professional.

Roth IRA

Roth IRAs allow individuals to contribute after-tax dollars, meaning there is no contribution tax deduction.

However, the investment earnings grow tax-free, and withdrawals in retirement are also tax-free.

401(k) retirement account

This is an employer-sponsored retirement account where employees can add a portion of their pre-tax income.

Some employers may match a portion of their contributions with 401k matching. The money grows tax-deferred until withdrawal in retirement, where it is taxed as ordinary income.

Other types of retirement accounts include:

• Savings Incentive Match Plan for Employees (SIMPLE) IRA plans
• Simplified Employee Pension (SEP) plans
• Solo 401(k)s

Investing in retirement accounts is a wise choice for long-term financial planning.

Retirement accounts offer tax benefits, the power of compounding interest, a range of investment options, and the opportunity to plan for your future.

In addition, by learning how to start saving for retirement, individuals can build a comfortable nest egg that will last for decades, ensuring a financially secure retirement.

Real estate

Real estate offers the potential for appreciation in value, real estate passive income, a range of investment strategies, a hedge against inflation, and greater control over your investment.

It’s a tangible asset that has the potential to appreciate over time. Investing in a property allows you to watch your investment grow as the property increases in value.

Treating your real estate as a rental property could earn steady ongoing passive income. Alternatively, you could venture into flipping properties for a quick profit.

Another real estate investment strategy is to buy a home and hold it as an asset until the appreciation in value allows you to invest in a higher-value property. It can be a viable strategy since inflation drives up not only the cost of goods and services but also the value of real estate.

Other ideas to invest 20k? Think outside the box!

Hoping to get more creative with finding the best way to invest $20k?  If so, paying off debt or investing in education may be your route.

Let’s explore these ideas a little further.

Pay off credit card debt

When you carry debt, you’re essentially paying someone else for the privilege of borrowing their money. Unfortunately, that interest can really add up over time.

So, by using $20,000 to stop paying credit card debt, you can save yourself a significant amount of money in interest payments over the long run.

Paying off your debt can also improve your credit score, positively impacting your financial life.

With a higher credit score, you may qualify for lower interest rates on future loans, credit cards, and mortgages, saving you even more money in the long term.

And we’d be remiss if we didn’t note that paying off debt is the gift that keeps giving.

Why? When you pay off debt, you free up your cash, giving you more money to put towards other financial goals, such as investing, saving, or even treating yourself to something special.

Make student loan payments

Figuring out how student loans work is complicated. With interest adding up over the years, you often have to pay back a lot more than you originally realized.

If you have a lot of money due in student loans, this could be a great way to use that extra $20k!

Whether the $20k is enough to cover all or just part of your student loans, getting rid of or minimizing your monthly student loan payment will make managing your biweekly budget or monthly budget that much easier.

Invest in your education

With $20,000, you can pursue additional education, such as a college degree, trade school, or other specialized training.

Education can open up new doors and opportunities for your career and increase your earning potential over the long run. So, if you’re thinking about what to do with $20k, investing in your education today could mean limitless returns tomorrow.

Investing in education can also positively impact your personal growth and development. It can expand your horizons, challenge you to think differently and expose you to new ideas and perspectives. Ultimately, education can help you become a more well-rounded and fulfilled individual—professionally and personally.

Save for your kid’s education

If you have children, another great way to plan for the future is to start saving for your kids’ college education. Even if your children are still young, the earlier you start, the better!

One way to invest $20k for your kid’s college education is with a 529 plan. This special education savings plan offers certain tax advantages to help you save for qualified education expenses.

But be aware that you can only use the funds from a 529 plan for qualified education payments.

So before getting started, make sure you do your research to determine if a 529 plan is worth it for you and your family.

4 Key things to remember

Before jumping into the first strategy that catches your attention, I encourage you to reflect on your goals and personal circumstances.

It will help you find a strategy to start investing that aligns with your long-term objectives in life, minimizes risk, and maximizes returns.

To set the stage for picking an investment strategy, consider the following:

1. Set financial goals

What do you want to achieve with this money?

For example, some financial goals could be to save for retirement, buy a home, pay off debt, or invest for the future.

Once you have set your financial goals, you can explore the best investment options to help you achieve them.

2. Outline a time horizon

How long do you plan to hold onto your investment?

Is it a short-term savings goal (such as saving for a house) or a long-term goal (such as building a retirement nest egg)?

Your investment time horizon will influence the types of investments you choose.

3. Understand your risk tolerance

How much risk are you comfortable taking to earn higher returns?

Are you okay with the ups and downs of the stock market, or do you prefer more conservative investments with lower risk?

Understanding how risk averse you are and your risk tolerance can help you choose the right investment strategy for your needs.

4. Diversify your investments

Even if you think you’ve found the best way to invest $20k, you don’t want to put all your eggs in one basket!

Instead, consider diversifying your investments across various asset classes, such as stocks, bonds, real estate, and commodities.

It can help reduce your overall risk and potentially increase your returns over the long run.

Don’t forget to do your research

Once you determine a strategy that aligns with your answers to the questions above, you can research the options available within the specific investment strategy of your choosing. For more help, check out our list of the best investment websites you can leverage.

Here are some key questions to consider when researching potential investments:

What are the tax implications?

For example, take the time to consider: Will you be subject to capital gains taxes or other taxes on your investment returns?

Understanding the tax implications of your investment can help you make smarter decisions and maximize your after-tax returns.

How has the investment performed historically?

Now, it’s time to do a little research. Look at how the investment has performed over time. How does it compare to similar investments?

While historical performance is never guaranteed, it can be a valuable indicator of future potential returns.

How is the investment managed?

Who manages the investment? Importantly, what is their track record?

Do they have a clear investment strategy? Are they aligned with your financial goals?

Before deciding what to do with 20k, ensure you know what type of management your investment will have and who will manage it.

What are the company’s corporate values and social impact?

Does the company behind the investment clearly commit to social responsibility and sustainability? Do their values align with your own? Do they positively impact society and the environment?

Choosing investments supporting your values will help you protect your peace of mind and improve the world.

Are there investment fees?

What are the fees associated with the investment? How do they compare to similar investments?

Remember that high fees can reduce your overall profitability.

What do market trends and indicators look like?

What is the current state of the market?

In other words, understand the difference between a bear and bull market.

How does this impact the investment you’re considering? Are there any potential risks or opportunities you should be aware of?

As always, research all potential risks before you decide how to invest $20k.

Expert tip: Starting a business is a great way to invest 20k

If you’re trying to figure out what to do with 20k to make it grow, you could also consider using this money to start a business or a side hustle. If you’re not sure where to get started, there are a lot of different ideas for side hustles out there.

You can earn money blogging, or become a graphic designer. Maybe you’ll start a cleaning business or consider learning about freelance marketing.
While you may not want to pour ALL of your saved-up $20k into starting a side hustle or business, you may choose to use a portion of it.

For example, you can use part of your savings to pay for equipment or take courses on how to launch your business. If you’re looking for new income stream ideas, starting a business or even a side hustle could prove profitable in the long run.

What can I do with 20k to make more money?

If you want to use your 20k to start making even more money, one of the best things you can do is build passive income streams.

For example, you may try starting a side hustle, launch a business that can eventually run with minimal input from you, and/or invest in real estate, stocks, bonds, or other assets.

Is $20,000 a good amount to invest?

$20,000 is a great amount to get started investing! If you want to keep things simple, consider investing your $20k in a 3 fund portfolio, AKA the lazy portfolio. That said, you can learn how to start investing with just a little money.

What is the best thing to invest $20,000 in long term?

There is no single best investment for the long term. Rather, the best investment for your $20k will vary depending on your own financial goals and risk tolerance.

One popular option for many people is investing in real estate, dividend stocks, and/or bonds with a brokerage account.

What is the best way to invest 20k short term?

If you want to be able to easily access your investment in the short term (i.e., in less than five years), then you’ll want to consider highly liquid investments, such as high-yield savings accounts, CDs, ETFs, or money market funds, etc.

Above all, you’ll want to avoid non-liquid (or illiquid) assets, like estates, collectibles, or other intangible assets.

Articles related to investing

If you gained valuable investing knowledge from this article, check out these posts next!

• Should You Pay Off Student Loans Or Invest?
• The Difference Between Savings And Investment: Does It Matter?
• How To Grow Your Money: 7 “Must Do” Tips
• How To Start: Passive Real Estate Investing

The best way to invest $20k depends on you!

Investing $20,000 can be a smart way to set yourself up for financial stability in the future.

By taking the time to carefully consider your financial goals, investment time horizon, and risk-tolerance level, you can choose the investment strategy that suits you best—and it won’t be the same for everyone.

Whether you opt for stocks, bonds, real estate, or other investment vehicles, it’s essential to research, stay informed, and make thoughtful decisions that align with your personal core values and goals.

So, use the knowledge and tools you have learned here to make informed decisions about the best way to invest $20k. Above all, don’t forget: Starting early and staying committed to your goals is the key to wealth accumulation.

The post The Best Way To Invest $20k appeared first on Clever Girl Finance.

Starting early with investing for retirement is so important to secure your future self. This means that saving for retirement should be a component of your overall financial portfolio and wealth-building strategy. By starting early on, you put yourself in a position to build a substantial nest egg that the future you will be grateful for. So, let’s discuss how to save for retirement in your 20s!

Why saving for retirement early matters

Saving for retirement early is essential as it can you help you create a solid financial base. This ensures that you’ll have sufficient savings for a comfortable retirement, even if career interruptions happen along the way.

Early savings also means that you are creating financial independence for yourself, lowering your reliance on social benefits and reducing financial strain in retirement.

Unfortunately, 56% of workers feel that they don’t have enough money for retirement, which is why it’s important to get started saving immediately.

But don’t worry, retirement saving isn’t as complicated as it seems! Here, you’ll find answers for everything from “How much should I contribute to my 401k in my 20s?” to “What are my options for saving?”

There are many retirement accounts to choose from when figuring out how to save for retirement in your 20s.

First, of course, you need to pick the right account that aligns with your financial situation and goals. Let’s discuss them below!

1. The 401(k) Plan

A 401(k) is an employer-sponsored retirement account into which you can contribute part of your pre-tax income. Many employers who offer the 401(k) plan will offer a match up to a certain percentage.

For example, a common matching contribution plan matches 50% for annual contributions up to 6%. If you make $100,000 and contribute 6% (or $6,000) to the plan, your employer will contribute an additional $3,000.

The great thing about the 401(k) plan is that you get to save the maximum amount of your income before taxes. But keep in mind that when you retire, your funds will be taxed at whatever your tax bracket is at that time. So, when you calculate retirement, planning for taxes is a must!

In addition to the traditional 401(k), many employers offer a ROTH 401(k) to their employees. Funds contributed to a ROTH account go in post-tax. Post-tax means your savings come out tax-free in retirement.

There are a few other types of employer-sponsored plans as well: 403(b) and 457(b) plans. These plan types are almost identical to the 401(k) plan. They are offered to people who work as educators, in government, or in non-profit organizations.

A personal 401(k) story

A while back, I posted a picture on Instagram of an old 401(k) statement. I started this 401(k) account with a zero balance.

Over a 4-year timeframe, I saved $81,490, which included my 401(k) match. Shortly after I shared that post, someone left this particular comment:

“401(k)s are for chumps. Two-thirds of that money will be gone in taxes, (and) fees that you don’t know about, and that they are legally allowed not to tell you about.

You will be taxed at the rate at which you retire, which will be more than you are today. Inflation will cut that by 2% every year.

It’s a big game and you are falling for it. Why would you put your money in a 401(k) when the banks just print more money?”

I’ll be honest and say that yes, I agree with a portion of their comments, but this person is not right about everything with 401ks. Which brings us to the pros and cons.

Pros and cons of a 401(k)

There are a few cons to a 401(k). Some 401(k)s can be expensive, have hidden fees, and be very limited in terms of where you can invest.

Additionally, 401(k) contributions are before tax. That means when you start to withdraw it, you will be paying tax at whatever your future tax rate is. Future tax rates are hard to predict, but they could very likely be higher than the present day.

However, even though there are a couple of drawbacks of a 401(k), the advantages far outweigh them when planning how to save for retirement in your 20s.

401(k)s are a great way to gain investing experience

Before being exposed to a 401k, many people have never really had the opportunity to invest in the stock market. A 401(k) provides that opportunity and allows it to happen painlessly through automatic deductions from your paycheck.

There is a great opportunity for pre-tax contribution growth

The growth of your pre-tax contributions may far outweigh any taxes or fees you incur when it’s time to withdraw from the account. However, this is not a guarantee.

In addition, the growth from your employer’s 401k matching may be able to take care of some or all of those taxes and management fees you incur.

Retirement is not a specific date; it’s a period of time that lasts for several years

Retirement can last upwards of 20+ years. That means when you retire, you won’t be withdrawing all your money at the same time. Your money still has more time to potentially keep growing.

Your money doesn’t need to stay in your 401(k) forever

Most people do not stay at their jobs from when they first graduate college until they retire. A classic example is me! I switched jobs four times over an eleven-year period before I started working for myself.

When you leave a job, you can roll over your 401(k) money into an individual account. You are not stuck there forever.

2. Traditional IRA

This is a type of retirement account that you can set up individually, independent of an employer.

In addition, this account type is tax-deferred. That means you will have to pay taxes come retirement (age 59 1/2), according to the IRS, when you start to withdraw your money.

Pros and cons of a traditional IRA

The biggest benefit of a traditional account is deferring taxes till retirement. You won’t pay taxes on funds when you put them into the account. As most people have a lower tax bracket after retirement, this means you’ll ultimately pay less in taxes when you withdraw the money later.

Additionally, a traditional account gives you much more flexibility in investing than employer-sponsored plans. Generally, you can invest in almost endless investment options, such as stocks, mutual funds, or bonds.

IRA contribution limits, however, are much lower than 401(k) limits. And if you take out money before you are eligible (age 59 1/2), you will be subject to income tax and a 10% penalty.

3. Roth IRA

This account type is similar to a traditional account but has some key differences.

First, your contributions are made post-tax, which means there is no deferred tax benefit.

In addition, the earnings on your funds will not be taxed come retirement age. You can make withdrawals on your contributions before you are eligible without any tax penalties, according to Charles Schwab.

Pros and cons of a Roth IRA

While a traditional IRA gives you potential tax savings when you contribute funds, a Roth helps you save on taxes in retirement. Money that you put into a Roth goes in post-tax, meaning you’ll pay taxes before depositing it.

However, you get to take your money out of the account tax-free in retirement.

Like a traditional account, Roth accounts also give you the chance to invest according to your risk tolerance.

However, Roths also have lower contribution limits than 401(k) accounts.

In addition, Roth accounts have income limits, so you may not qualify for a Roth if you make too much money.

Traditional or Roth IRA? Which is best?

They are both great ways to grow your retirement funds. But to choose between the two, you have to determine what works best based on what you think your future tax bracket will be.

For example, if you think your future tax bracket will be lower than what you currently pay now, then a traditional account might be best for you since you don’t pay taxes until later.

However, if you think your tax bracket will be higher than what you pay now, then a Roth might be best for you since you would have already paid taxes on your contributions.

Many people have both types of accounts because you can have multiple IRA accounts. Ultimately, they are able to save more by leveraging the benefits of these plans over time.

4. The self-directed IRA

A self-directed IRA is a type of individual retirement account that is governed by the same IRS rules as traditional and Roth accounts.

However, unlike the other types, a self-directed account can unlock access to alternative investments, for example, real estate.

Pros and cons of a self-directed IRA

There are pros and cons to a self-directed IRA, as explained by NerdWallet. The main benefits of a self-directed account include:

• Ability to invest in a range of alternative investments
• Potential for higher returns through diversification

However, self-directed accounts also come with disadvantages, such as:

• Fees may be higher for self-directed accounts
• May have a higher risk of scams or fraud due to less regulation
• Some alternative investments have low liquidity, making it difficult to withdraw funds

5. The Solo 401(k)

This plan is specific to those who are self-employed but have no full-time employees. Essentially, a solo 401(k) lets self-employed people create a 401(k) plan for their business. It can be a great option if you’re self-employed and trying to figure out how to save for retirement in your 20s.

Pros and cons of solo 401(k)

The advantages of a Solo(k) include:

• Many benefits of a traditional 401(k) that self-employed people otherwise wouldn’t get access to
• Business owners can contribute both as an employee and employer, maximizing contributions
• Spouses who get an income from the business can also contribute to the plan
• Higher contribution limits than other common options for the self-employed.

The downsides of a solo 401(k) include:

• Only available for self-employed people
• Added administrative duties for the business owner, such as filing tax forms
• Contribution limits are tied to income, so if your income fluctuates, your contributions could be affected

6. The SEP-IRA (AKA Simplified Employee Pension)

The Simplified Employee Pension allows the self employed and business owners to contribute up to 25% of employee’s earnings to IRAs for their employees up to a certain amount, tax-deferred.

It’s based on employer contributions only, and each eligible employee (if you have them) must receive the same contribution percentage from you as the employer.

Pros and cons of the SEP-IRA

The main benefits of an SEP include:

• Easy to set up and maintain as opposed to a 401(k) plan
• Relatively high contribution limits
• Contributions can be flexible based on the profit of the business
• There are no ongoing tax filing requirements for a SEP plan, the U.S. Department of Labor notes.

The cons of a SEP include:

• No employee contributions
• Employers must contribute to all eligible employees
• There are no catch-up contributions for older employees
• No ROTH option is available for a SEP

Expert tip: Understand your risk tolerance

Your time horizon is the amount of time you will hold an investment. Generally, an investment fund with a later date can take on higher risk than one with a nearer date.

It’s important to decide how risk averse you want to be throughout the years. And if you choose to, it’s okay to make changes if you want to. Knowing your risk tolerance can help you plan for the long term future.

How to save for retirement in your 20s when you’re just starting out

Now that you are familiar with the different types of retirement accounts, it’s time to get started with retirement planning in your 20s!

But what if you’re just starting out and don’t earn much? Whenever the topic of saving for retirement comes up, I am often met with statements similar to the following:

“I don’t earn enough to save for retirement.”

“I’m waiting to get a better job before I start saving.”

“I’ll play catch up when I earn extra income.”

While entering the workforce can be exciting—you’re finally out on your own!—it can also be overwhelming. And if you’ve got an entry-level salary, it can be tempting to skip saving for retirement.

However, there are plenty of ways to save for retirement while dealing with an income that’s lower than you plan to make in the long run.

1. How to start saving for retirement with the right investments

The first step to saving for retirement is finding the right accounts and simply getting started. Many jobs offer employer-sponsored retirement accounts like a 401(k). You can also save for retirement through non-employer accounts like an individual retirement account.

The investments you choose will generally depend on your personal risk tolerance.

However, most financial experts agree that you can be more aggressive with your investments in your 20s because you’ll have more time for market corrections. That means it could be worthwhile to invest in riskier vessels, such as individual stocks, over lower-risk investments, like investing with index funds.

Still, it’s a good idea to diversify your accounts as well—meaning you shouldn’t put all of your savings into one type of investment.

Although you might be earning a starting salary, you can start by contributing as little as 1% of your salary to your savings. Then, make 1% increments for each raise you receive.

Even though it’s a small amount—you probably won’t notice much of a difference in your paycheck— you’ll be saving a substantial amount of money over the years.

2. Get the free money from your employer

What types of retirement options does your employer offer? When you take a job, your human resources department typically provides information on plan options. Many employers offer a 401(k) or 403(b) plan for employees.

Be sure to ask your employer about potential retirement options to see what they offer.

If your employer offers a 401(k) or 403(b) savings match, take it. So many people do not take advantage of their employer-sponsored match.

That’s a big mistake because you essentially get free money! If you are just getting started with saving for retirement, you can set an initial goal to contribute just enough money to get the match.

3. Leverage other options

If you don’t have access to a 401(k) plan through your employer, then consider 401(k) alternatives. They include setting up a traditional and/or Roth IRA through your bank or via a brokerage firm.

The saving maximums are lower than a 401(k) or 403(b), but you can still save a lot of money over time.

In addition, if you’re learning how to save for retirement in your 20s, you’ll likely also need to learn how to save for other expenses.

Starting an emergency fund stored in a savings account is an important aspect of a healthy financial plan as well. It helps you cover the unexpected costs that could come up in life—from a broken-down car to sudden medical bills.

4. Automate your savings

After you’ve calculated your retirement lifestyle needs, you should make saving easier by automating your finances. How?

Have funds automatically taken from your paycheck directly into your account. 401(k) and 403(b) deposits are usually automatically pulled from your paycheck.

However, if, for some reason, your deposits are not automated, make a payroll request to make it happen.

Automatic transfers take the stress out of saving. And you’ll never forget to make a transfer again! Plus, you won’t get the chance to overthink whether or not you should make the transfer.

Have an inconsistent income? Just not ready to automate? Then, set reminders on your phone around each pay period, reminding you to make those transfers to your retirement accounts!

Putting off retirement contributions until you make more money? Not a great idea when learning how to save for retirement in your 20s.

Doing so basically means that you could have to work longer than you expected in your old age and/or have to rely on government assistance to survive.

By putting it off, you lose valuable time to take advantage of the power of compounding— the key to growing your money over time. So, if you’re wondering what to do with savings, start with what you can save now, no matter how small it might be.

How much should I contribute to my 401(k) in my 20s?

A key consideration to make is to determine how much you need to save before retiring from work.

The easiest way to calculate retirement numbers is to use calculators. Here are a few of our favorite calculators to get you started:

• Bankrate calculator
• Vanguard calculator
• Smart Asset calculator

Here’s what happens when you take money out of your retirement account

I’ve seen so many instances where people think of their retirement as their emergency cash or as savings for their short-term goals.

They feel they can leverage the money for minor emergencies, non-emergencies, and other financial obligations or goals they have.

But is this okay? My thoughts? It really isn’t a good idea unless it’s a dire emergency.

Withdrawing or loaning money from your retirement fund can have adverse effects on your wealth-building efforts for several reasons.

You will lose the potential longer term gains/earnings you would get if your money remained invested and was working for you. You will also lose out on earning compounding interest when you take money out of your accounts.

Additionally, if you withdraw your money before your eligible retirement age, you may be liable to pay income taxes as well as an additional penalty (10%) on the total amount withdrawn.

What does this look like in actual numbers?

Withdrawing money from retirement

Let’s say that right now; you are considering taking $1,000 out of your retirement accounts. Let’s also assume that the average return on your investment for the next year is ~8%.

At the end of that year, you’d have $1,080 in your account. Another year into the future, based on annual compounding with a return of 8%, you’d have more than $1,160 in 2 years from an original investment of $1,000.

Impact of an early withdrawal

If you decide to take this $1,000 out early, you’d have to pay the following (assuming a 30% tax rate):

1. Early withdrawal penalty – 10% = $100
2. Federal & state tax withholding = $300

The balance you would receive would only be $600.00

Taking a loan from your retirement savings

If you decide to take out a loan, depending on the timeframe of your loans, your $1,000 will miss out on the potential earnings and compounding. As with any loan, you’ll have to pay interest on the balance.

And like many people who borrow from their retirement accounts, you might have to reduce or stop your retirement contributions altogether to be able to make the loan repayments. So, the lost opportunity is even greater.

However, if you left that money alone for 10 years, the potential future value of your $1,000 could be $2,159. A scenario like this assumes an average return of 8% over that 10 years (based on the historical performance of the stock market over time). Since this is an average return, it would be despite spikes and dips in the stock market.

$600 vs. $2159. The difference is major.

And this is only based on $1,000.

If it was based on $10,000, it would be a difference of $6,000 vs. $21,589.

Yup, let that sink in.

How to avoid withdrawing money early

It’s important to avoid dipping into your savings. Here are a couple of tips to help you build a better budget for emergencies and other expenses.

Build up your emergency savings

To start, it’s important to focus on building a solid emergency fund. Your goal should be 3 to 6 months, but more is better, such as a 12-month emergency fund. That way, if you need some extra cash due to an unexpected occurrence, you can leverage your emergency savings instead of your retirement money.

Don’t have an emergency fund in place yet? Set an initial goal to get to $1,000 or more ASAP. Then, after paying off any high-interest debt—like credit card debt—ramp up your emergency savings to 3 to 6 months of basic living expenses.

Start saving for your short to mid-term goals

Next, create savings for your short to mid-term goals. It’s basically the money you need to have access to in less than 5 years, like buying a house, taking a trip, or buying a car.

Building these saving goals into your monthly expenses list will help ensure you are allocating funds toward them each paycheck. Over time, you’ll be surprised at the progress you make.

Should I roll over my old 401k to my new employer’s plan?

Yes, when it comes to what to do with your old 401k, you can roll it over from one employer to another if permitted by your new employer.

But it’s important to keep in mind that, in many instances, employer-sponsored plans can be limited in terms of the options you can invest in.

If you are moving jobs, it’s better to move your retirement funds into your own account with a brokerage firm like Betterment, Vanguard, or Fidelity. There, you have access to the entire stock market and potentially much lower fees. I’m a huge fan of index funds because I know exactly what I’m paying in fees.

How much should you be saving for retirement in your 20s?

The easiest way to determine how much to save for retirement at this age is to simply save what you can.

Many people at this age are in the early stages of their career—and adult life. So, you might not have as much money to put toward retirement as you will when you establish yourself in the world.

Hopefully, you’ll be able to at least build an emergency fund and meet your employer’s 401(k) match if you have one.

However, if you have a lot of high-interest debt, such as from credit cards, you should focus on learning how to stop paying credit card debt by paying it off.

Additionally, start saving some money for retirement.

How do I start putting money away for retirement?

The first place to start is to look at savings options from your employer. A 401(k), for example, is an employer-sponsored account that generally automatically contributes money to your account from your paycheck. All you need to do is sign a few forms through your human resources department.

If you don’t have access to an employer-sponsored account, you can look into individual retirement account options. And you may choose to open an IRA in addition to your workplace 401(k).

To open an account, you’ll have to reach out to a bank, brokerage firm, or financial advisor.

How much should I contribute to my 401k in my 20s?

I suggest starting with a retirement calculator to get a general idea of what you might need to meet your lifestyle in retirement. Then, you can break down how much you need to contribute to reach that goal.

Remember, retirement isn’t a short time period. Most people in the U.S. retire in their 60s, according to Madison Trust Company. And from there, you may be in retirement for 20 years or much longer.

The unknowns make it difficult to know how much you should contribute to your 401(k).

However, it’s worth noting that the longer your money is invested, the more time it has to grow. So, contribute what you can and take advantage of things like employer matches.

Articles related to preparing for retirement

If you want to learn even more about how to start saving for retirement, read these posts now!

• Retirement Savings: Everything You Need to Know
• Roth vs traditional 401k: Is The Roth Better?
• What is the Difference Between A 401k And IRA?
• How To Save For Retirement In Your 40s And 50s: 11 Key Tips

Retirement planning in your 20s: Start saving now!

Don’t ever let ANYONE make you feel stupid for making smart money decisions. Do your research, determine your investment objectives, have a plan that you adjust as necessary, and stay the course when it comes to pursuing your financial goals.

If I didn’t know anything and was just starting out with my 401(k), people complaining about high fees and limited investment options might have stopped me from investing in the account. Based on their misguided advice, I could very well have invested nothing, gotten no free match, and lost out on the chance to build additional wealth by investing in my 401(k).

Don’t let that happen to you! Save early—even if it’s not much—so you’re better prepared for retirement. If you start building wealth in your 20s, you’ll be in a great place financially when you retire.

The post How To Save For Retirement In Your 20s appeared first on Clever Girl Finance.

Saving money is an important task at any age, but as you hit your 40s, the need to save for retirement grows. While savers in their 40s and 50s typically have a decade or two left to save for retirement given the traditional age of 65, emphasizing saving now can set you up for a dream-worthy retirement. So, let’s explore how to save for retirement in your 40s and 50s. 

11 Tips on how to save for retirement in your 40s and 50s

If you want to save for retirement in your 40s, you aren’t alone. Many mid-career workers start to put the spotlight on saving for retirement. Below are some strategies to pursue as you start saving for retirement. 

1. Pay off high interest debt

Before you start saving in earnest, evaluate your financial situation. According to Credit Karma, people ages 43 to 58 carry over $60,000 in debt, higher than any other age group.

If you have high-interest debt, it’s best to create a plan to pay it off as soon as possible. Not only can a big debt burden prevent you from saving for retirement, but it can also cost you thousands in interest payments. 

2. Make funding tax-advantaged accounts a priority

Tax-advantaged accounts are specifically designed to help savers build their retirement nest egg. Some common tax-advantaged retirement savings solutions include your 401(k), 403(b), and SIMPLE 401(k) plan. (Find out more about the 403b vs 401k.)

When you contribute to your tax-advantaged retirement account like a 401(k), you’ll contribute pre-tax dollars. Once in the account, your contributions will grow tax-free. When you are ready to withdraw funds in retirement, you’ll pay taxes on the funds.

Also, the IRS sets limits on how much you are able to save in tax-advantaged accounts each year. 

If you can contribute money to a 401(k) or similar option, consider making funding this account a priority. That’s especially true if your employer offers matching contributions, which can accelerate your retirement savings goals. 

3. Focus on your spending

In a perfect world, you could save for retirement without any spending cuts. But that’s usually not possible. When it comes to saving for retirement, most of us have to make some tough choices. 

Below are some options to consider.

Child’s education costs

Start by looking at your other big savings goals. Many parents who are saving for retirement might also want to pay for their child’s college education. But the reality is that you may need to prioritize saving for your own financial future. 

If you are behind on saving for retirement, you might want to do some catch up savings before you pay for your child’s college tuition. Although it might be difficult to say, it’s better to be honest with yourself and your child as soon as you decide.

Annual spending

You should also consider your annual spending choices.

For example, you might have to prioritize saving for retirement over a luxury vacation budget. Or opt to save more instead of purchasing a more expensive home. 

A honest look at your budget can help you determine where you can potentially cut back to contribute more to your retirement savings. While it’s difficult to pass up spending at the moment, it’s important to plan for the long-term.

Be honest with yourself about your spending and your retirement goals. Work to strike a balance that best suits your current situation without ignoring the future. 

5. Save in an IRA

An Individual Retirement Arrangement (IRA) is a type of account designed for retirement savers, and it’s a great way to learn how to save for retirement in your 40s. While there are several types of IRAs, the traditional and Roth IRAs are the most common. 

A traditional IRA is a tax-advantaged option through which your contributions are tax deductible.

In contrast, the contributions you make to a Roth IRA aren’t tax deductible, but qualified distributions are tax-free. 

Whether or not you have access to a 401(k), an IRA is a valuable savings tool. Consider funding this account to the limit if you can. Keep in mind you can have both a traditional IRA and a ROTH IRA if you qualify based on the income restrictions.

6. Consider a taxable brokerage account

A taxable brokerage account offers another place to stash your retirement savings. Essentially, this account is a designated place for you to invest funds post-taxes.

For example, you might open a taxable brokerage account through a platform like Vanguard to build an investment portfolio.

While the funds you contribute to a taxable brokerage account come from post-tax funds, these accounts don’t come with the same restrictions as tax-advantaged retirement accounts. With that, you can pull funds out of these accounts on an as-needed basis, regardless of your age. 

In general, it’s useful to invest through a taxable brokerage account after you hit your contribution limits for other types of accounts. 

Keep in mind that when you pull funds out of these account you may have a capital gains tax obligation, so be sure to consult with a tax professional if necessary.

7. Keep an eye on asset allocation

Not all investments are created equally. As you build a portfolio for retirement, it’s important to strike the right balance of risk for your situation. 

Of course, diversifying your portfolio is ideal, and it’s a big part of how to save for retirement in your 40s and 50s. But for many investors in their 40s and 50s, it makes sense to invest more heavily in stocks on the path to retirement.

In addition to stocks and bonds, other assets can make a useful addition to your portfolio. 

Not sure how to invest for retirement at age 40? A straightforward investment portfolio might be the right solution. Check out our guide to the 3 fund portfolio. 

8. Track your progress

Regardless of how much you need to save, you might not see too much progress initially. That’s because the power of compounding needs time to take hold. But don’t give up hope, and learn, “How does compound interest work?”. 

As you move through the process, make time to track your progress along the way. You could do this with a simple spreadsheet or a straightforward money-planning app like Empower.

Consider setting a time to track your progress toward retirement savings goals regularly.

Personally, I choose to check in on my financial progress twice each year and use a simple spreadsheet. But you might choose to check in monthly or annually with a streamlined app to see where you stand. Find a strategy that works for you.

9. Make sure you have the right insurance

As you prepare for retirement, it’s important to confirm you have the right insurance policies in effect.

For example, as you age, you might consider buying long-term care insurance. This insurance can help cover the costs of paid assistance as you age. 

On the other hand, it might be time to cancel other types of insurance.

For example, you might choose to end your term life insurance policy if you no longer have dependents. (Read about term vs whole life insurance.)

Without anyone relying on your income, you could eliminate that premium and redirect the funds toward your retirement savings. Knowing what insurance you need is an essential part of how to save for retirement in your 40s and 50s.

10. Determine how long you want to work

Building a retirement nest egg is a worthwhile goal.

But for many, it can take longer than expected to hit their retirement savings goals. If you are struggling to meet your savings goals for retirement, consider the possibility of working longer. 

Choosing to work longer as a professional goal can give you the breathing room you need to save more money for your golden years. Working longer may also be a good strategy when wondering how to save for retirement in your 50s.

11. Build a flexible side hustle

A side hustle is my favorite financial tool, and it can help with how to save for retirement in your 40s and 50s. You can use a side hustle to build your income right now, which can help you save more for retirement. But a flexible side hustle also gives you more options as you age. 

Those with a flexible side hustle might choose to drop their full-time job in retirement but continue on with their side business. With a side hustle, this means all of your income all of your earned income doesn’t have to be eliminated.

Instead, you’d be able to continue with a more flexible income stream to support some of your costs in retirement. 

Want to build a successful side hustle? Read Bola Sokunbi’s book, The Side Hustle Guide. 

Expert tip: Leverage catch up contributions and celebrate your wins as you save

According to the IRS, if you’re age 50 or older, you’re eligible to make catch-up contributions to your retirement savings accounts e.g. your IRA, 401(k), 403(b) etc, raising your contribution limit. So be sure to determine what the latest catch up contribution limits are on the IRS website.

That said, knowing how to save for retirement in your 40s and 50s is a massive financial goal. Make sure to celebrate your progress as you save for retirement.

You can even treat yourself (within budget) as you hit big savings milestones. Remember to enjoy the process and look back to where you started and where you are now with your savings goals to see how much progress you’ve made!

How much to save when saving for retirement at 40+

As you save for retirement, it’s a good idea to determine how much you’ll need for a comfortable retirement. Below are some strategies to help you determine how much to save. 

Look at the overall picture

Start by envisioning the type of retirement you want to have. If you dream of traveling the world, you’ll need a lot more money than if you are content to spend time in an affordable house. The reality is that you’ll need to save more if you want a more comfortable retirement. 

In general, it’s better to overestimate your retirement expenses. While it’s true that some of your costs might go down, like lower food costs if your children leave the nest or more affordable housing costs if you downsize in a low-cost-of-living area, other parts of your life might get more expensive.

For example, medical costs might be higher as you age, which is something to keep in mind for how to save for retirement in your 50s, as well.

Use reliable calculators

You can find a suite of retirement calculators online, and they can help you know how to invest for retirement at age 40.

Take some time to play with the numbers to see how the changes you make now can have a big impact on your financial future. 

Here are a few good retirement calculators to choose from:

• Vanguard retirement calculator: This option makes your retirement feel more like a story than just numbers.
• Nerdwallet calculator: A useful calculator that uses graphs so you can see how your money will grow.
• Bankrate calculator: This calculator details the entire process, including rates of return, income increases, and more.

Catch-up contribution details

The IRS has limits for the amount you can save in different types of retirement accounts. But when you hit a certain age, you can make additional catch-up contributions.

Below is a closer look at your contribution options.

401(k)

As of 2024, savers can contribute up to $23,000 to their 401(k), according to the IRS. If you are at least 50 years old, you can contribute an extra $7,500.

Contributing more to your retirement accounts can set you up for a more stable financial future. 

IRAs

As of 2024, savers with an IRA can contribute up to $7,000 per year, but if you are at least 50, you can contribute an additional $1,000 per year, according to the IRS.

Although you won’t be able to start saving more until 50, you could start to prepare your budget for the increased contributions. Consider where you would pull the funds from to maximize your contribution opportunities. 

Is it too late to start saving for retirement at 40?

It’s never too late to start saving for retirement at 40. While starting earlier is generally a good idea, diligent planning, strategic investments, and knowing how to build discipline with saving can still make a huge difference in building a secure retirement fund.

Don’t get discouraged before you start. Instead, start saving for retirement now and learn how to invest for retirement at age 40+.

How much should a 40 year old have saved for retirement?

The amount you should have saved for retirement varies based on your unique situation.

However, some experts recommend saving between two to three times your income for retirement by age 40.

For example, if you earn $100,000 per year, then it’s a good idea to have between $200,000 and $300,000 saved for retirement in your 40s.  

How much should a 50 year old save for retirement?

The exact amount you have for retirement as a 50-year-old should vary based on your financial situation.

However, many experts recommend that 50-year-olds should have at least 3-6 times their salary saved.

For example, if you earn $50,000 per year, then it’s a good idea to have around $150,000-$300,000 saved for retirement. 

If you want to learn how to save for retirement in your 50s, the biggest difference is that you’ll have a more compressed timeline than a 40-year-old. That means you might need a more aggressive spending and investing strategy.

Articles related to saving for retirement

If you enjoyed this article on how to save for retirement in your 40s and also your 50s, read these posts next!

• Portfolio Income And How To Earn It
• Retirement Savings: Everything You Need to Know
• What is the Difference Between A 401k And IRA?
• How To Build Wealth In Your 20s In 9 Steps!

Start saving for your retirement today!

Saving for retirement is a good idea at any age. If you are just learning how to save for retirement in your 40s and 50s, building a decent nest egg is entirely possible. Start by estimating your retirement spending needs and plan to build the nest egg you need. 

Remember that it’s never too late to learn how to start investing or how to save money. Make your retirement plan, be diligent with following it, and you will do well financially!

The post How To Save For Retirement In Your 40s And 50s: 11 Key Tips appeared first on Clever Girl Finance.

Think you don’t have enough money to start investing? Think again! You can learn how to start investing for beginners today, even if you start your investing journey with just $100.

Although you might start out by investing small amounts, it can be a turning point in your finances. Investing money for beginners doesn’t have to be hard either!

When you decide to start investing, the most important part of the process is educating yourself. Learning how to invest for beginners will help you ease yourself into it and avoid common mistakes. Once you have a better understanding of investing, you will feel more comfortable as an investor growing your investments over time.

If you are reading this, then you are in the right place to get started. In this post, you’ll learn about how to start investing for beginners. And this information applies whether you have just a little money to invest or a lot of money to invest!

(P.S. As a woman, studies show you can be an amazing investor!)

What is investing?

When you decide to invest your money, you are choosing to put it into a vehicle with the goal of receiving a return down the line.

At some point, you hope that the money you put into an investment will grow. In most cases, you plan for little ongoing involvement on your part once you’ve invested the money.

Although most people associate investing with the stock market, there are many different types of investments. For example, you could invest in real estate or your own business. Ultimately, you’ll figure out your own investment style as you go.

No matter what assets you choose to invest in, you hope to earn money on that investment in the future.

Why is investing important?

Investing is one of the best ways that you can grow your money for the future. However, investing is not the same as simply saving money. Let’s look at a few reasons why investing is so important.

Investing can beat inflation

Saving money is an important place to start building a better financial future. However, your savings are diminished each day by the powers of inflation. Although your savings account might have the same balance ten years from now, that money will not have the same purchasing power that it has today.

Investing may seem like an expense, but really, with successful investments, you should be getting all that money back plus more. With investing, you are able to grow your money over time and keep the powers of inflation at bay.

Historically, the stock market has provided returns between 6% and 7%, with inflation factored in. Those returns can grow your savings dramatically over time.

Compound interest grows your money

The power of compounding can add to your nest egg. If you choose to reinvest your earnings over the course of many years, you’ll benefit from the compounding effect. Compounding is a process that grows your money over time by reinvesting your investment earnings.

Your money is always working for you

If you are just starting your journey of building wealth, then investing can help you reach your long-term goals faster. Instead of trading your time for money in order to build wealth, you can have your money work for you.

When your money starts to earn money through your investments, you won’t be completely dependent on your day job or your savings.

When should you start investing?

Before we dive into how to start investing, let’s talk about when you should start investing. Investing strategies typically involve a long-term timeline. With that said, the best time to start investing is as soon as possible.

The sooner you are able to start investing, the more time you’ll have to allow your investments to grow. Even when you’re investing for beginners with small amounts, it will add up over time.

Generally, you will use these investments to fund your retirement. So it is a good idea to start as soon as you can. You’ll want to give your investments plenty of time to build your wealth.

Learning how to start investing is an extremely important part of your financial journey. However, there are a few things that you should tackle before you start investing. Let’s take a closer look.

After you pay down high-interest debt

Paying off debt is the first step as you start thinking about investing for beginners. If you have any debt that is draining your resources each month, then you should focus on paying that down first.

Specifically, aim to knock out any high-interest debt, as this debt costs you the most as a result of compounding interest. An example would be high-interest credit card debt.

Once you’ve paid down your debt, you’ll be able to invest more comfortably. 

When you have an emergency fund

Living one paycheck from the edge is not a good feeling. An emergency fund can allow you to enjoy more financial breathing room in your life. Before you start investing, consider building an emergency fund.

Once you’ve paid down your debt and built an emergency fund, then it is time to revisit the topic of how to invest for beginners. If you start young, then the power of compounding can work in your favor. Even if you only have a few dollars to start investing, you should take action as soon as you can comfortably do so.

Keep in mind, if your employer offers a free match on your investments, you definitely want to take advantage of this match ASAP. It is essentially free money!

How to start investing money for beginners

Investing can change your financial future for the better. You don’t need a lot of money to start investing. In some cases, you only need a few dollars to get started.

Of course, you might have a goal of increasing your investments over the long term. But don’t let limited resources stop you from building your long-term wealth.

1. Learn about the different types of investments

There are many different types of investments, and it’s important that new investors understand all of them. Then you can choose the options that are best for you when you create your investment portfolio and financial plan.

Here’s a list of some of the types of investments you’ll encounter as you make financial choices:

Individual stocks

Individual stocks are shares of a company you can buy and have partial ownership.

Bonds

A bond is a type of loan that you can invest in and gain interest and your money back over time.

Mutual funds

With mutual funds, your money is pooled with other investors and used to purchase many different types of investments like stocks and bonds.

Index funds

One of the most popular kinds of mutual funds are index funds. They track a specific stock market index, like the S&P 500. When you buy a share of an index fund, you basically get a little piece of every stock within that index.

ETFs

Also known as exchange-traded funds, these are similar to mutual funds, but are traded on the open stock market.

Target-date funds

A target-date fund is another subclass of mutual funds. They’re designed for investors who have a specific date in mind when they’ll need to use their investment money.

REITs

Also known as Real Estate Investment Trusts, these allow you to invest in income-producing real estate (you are investing in the company that owns the real estate).

2. Create your plan for investing

Next, it’s time to sit down and create your basic plan for investing. Do you have debt to pay off first? Is your emergency fund where you’d like it to be? If so, you’re ready to begin investing for beginners.

As you familiarize yourself with the different types of investments, make sure to research their pros and cons. For instance, investing in individual stocks can be much riskier than a diversified S&P 500 index fund. Figure out what kinds of investments you want to focus on.

Do you already have some money saved up that you’d like to invest? Figure out if you want to put it in the market right away as a lump sum, or gradually by dollar cost averaging.

Lay out your personal goals for investing as well. For most people, one big goal is funding their retirement. But you may have other goals for investing too. Maybe you want to buy a house in ten years. Or send your kids to college. Investing can help you grow your money for those goals too.

We also have a free course to help you create a plan for your future self through investing!

3. Determine how much money you should invest

In this step, you’ll be crunching some numbers! First, you’ll want to figure out how much money you’ll need for your goal. Then, you’ll calculate how much you’ll need to invest over the years to reach that target.

Some experts advise saving 10% of your income for retirement. But is that really enough? It depends on how much you make, when you want to retire, and how much you want in your accounts by then. Here’s how to figure out if 10% is enough.

If your target numbers are a lot larger than the amount you can realistically afford to invest, you’ll need to look into ways to increase your income.

4. Begin investing money into employer-sponsored accounts

You may work for a company, where you likely have access to some employer-sponsored investment accounts. In general, these accounts are aimed at helping you save for your retirement in a tax-advantaged way. Many employers offer a 401(k) or 403(b). 

If your employer doesn’t offer a retirement account, then consider opening an IRA to start saving for your retirement. When it comes to investing money for beginners, these are some of the easiest and most accessible options—and some of the most powerful, too!

5. Try a robo-advisor (a great way to start investing for beginners)

Robo-advisors are one of the simplest ways to begin investing money for beginners. A robo-advisor is essentially a virtual financial advisor. The use of algorithms and technologies eliminates the need for a human financial advisor.

It will provide automated financial management services and tailor your investment recommendations based on your goals. Using one can definitely give you a bit of a shortcut as you learn how to start investing money for beginners.

The benefit of using a robo-advisor is that the fees are typically low, even though you are getting customized portfolio recommendations. It is a great way to get started with building wealth with little money. 

Most robo-advisory firms offer low account minimum requirements and take care of portfolio rebalancing for you automatically.

If you are interested in trying a robo-advisor and want to learn how to invest for beginners with one, then check out our favorite investment apps below:

• E*Trade: An award winning app that makes investing easy.
• M1 Finance: A highly rated app that allows you to automate your investing.
• Wealthfront: Allows you to automatically diversify your portfolio for long-term investing.
• Ellevest: This app focuses specifically on female investors’ goals and takes your values into account for investing.
• TD Ameritrade: Allows you to trade your investments easily.
• Acorns: Allows you to start investing with just $5, and it has the feature of a round-up savings account.
• Betterment: A solid option with automatic investing in index funds.
• SoFi: Begin with just $1 and no management fees.

6. Seek out a brokerage account

If you’re opening an IRA or another personal investment account, you’ll need to do it through a brokerage. There are many online brokers available on the market today. Each offers different services and charges different fees.

As you sift through your options, consider what matters to you most. In some situations, you may want to buy and sell stocks on a regular basis. Transaction fees for this can add up quickly at some brokerage firms. 

In other situations, you might choose to invest in index funds with fees built in. Either way, you’ll want to find a brokerage account that minimizes fees for your investment style.

Many brokerage accounts are set up so you can learn how to start investing with little money. Here are a couple of great online brokers to start with:

• Interactive Brokers: Award-winning broker without the high cost.
• E*Trade: Offers a quick and easy process to open an account.
• Webull: There are no deposit minimums with this well-reviewed broker.
• Charles Schwab: An incredibly popular broker that can help you with your investing needs.
• Fidelity: Known for its decades of investing experience.
• TD Ameritrade: Offers low rates and plenty of investment strategies.

7. Consider certificates of deposit (CDs)

Certificates of deposit (CDs) are a safe place to grow your money if you have a low risk tolerance.

Although you will likely miss out on bigger returns through the stock market, you won’t have to worry about any dips along the way.

CDs can be a particularly good option to save up for short-term goals. If you anticipate needing money in a couple years, you might not want to risk investing it in the stock market, which has periods of ups and downs.

8. Invest in yourself (a big part of how to start investing)

Investing in yourself is just as important as investing in the stock market. You might choose to invest in your financial education, which could save you thousands of dollars over the course of your life.

You might choose to invest in your business, which could allow you to take control of your income. 

Or you could choose to invest in your health. After all, a healthy body makes life more enjoyable. Here are some tips for living a healthy lifestyle on a budget!

9. Continue with investing over time

When it comes to investing money for beginners and seasoned experts alike, consistency is key! The more frequently you invest, year after year, the closer you’ll get to your goals.

These tips will help you stay consistent in life, no matter what habits you’re working on. Whether it’s investing for beginners, eating healthier, or staying organized, consistent action will make all the difference.

Expert tip: Take your time and don’t make impulsive decisions

When you first learn how to start investing for beginners, you’ll be reading through a lot of information. And it might even seem pretty straightforward! Just do X, Y, and Z, and you’re all set—right?

But it’s always different when you’re just reading about something vs. when you’re actually doing it yourself. There are a lot of feelings that can come with the territory of investing and money management.

Maybe your coworker told you about this “hot new stock” and got you really excited about it. Before you invest your hard-earned money, take a pause. Do your own research to decide if it’s really a sound move, or a risky gamble.

Similarly, there could be a day when the market has a slump and lots of people are panic selling. Will you let yourself get caught up in that, or will you stay calm, cool, and collected because you were already mentally prepared?

Since emotions are temporary, try not to base investment decisions on your feelings or what the people around you are saying. Make your plan based on research and facts, and stick to it! This way, you don’t have to be afraid of the stock market.

Investing money for beginners: Where should you invest first?

Now you know about some of the different investing options and how to start investing for beginners. That said, if you’re trying to determine where to get started with investing first, here are our suggestions.

1. Leverage tax-advantaged retirement savings accounts from your employer first

An employer-sponsored retirement plan is the best place to start investing money for beginners. Examples of these account types include 401k, 403b, and 457b. By leveraging tax-advantaged accounts, you can take full advantage of their tax benefits.

Taxes for employer-sponsored retirement account

Usually, your contributions to your retirement account will be taken out of your paycheck before your taxes are deducted (also known as your pretax income). This reduces your taxable income. As a result, the taxes on your income after these deductions (post-tax income) would be lower at the end of the year.

Also, these accounts offer a deferred tax benefit. This means you don’t have to pay taxes on your investments until you start to make withdrawals on the accounts once you reach retirement age (age 59.5). Or at the required withdrawal age set by the IRS (age 72).

2. Set up your own IRA

Next, you can go about setting up a traditional IRA or Roth IRA (Individual Retirement Account). 

If your employer does not offer any type of retirement savings plan, an IRA is a great place to start. These account types also have their own tax advantages, which makes them particularly beginner-friendly. There is a contribution limit for these, according to the IRS, that you should be aware of, though.

Traditional IRAs have the same tax benefits as traditional 401(k)s. Roth accounts are a little different, because you pay taxes on your contributions the same year instead of waiting until it’s time to withdraw. Learn more about Roth IRAs and other 401(k) alternatives here.

3. Open your own brokerage account

Once you’ve fully leveraged the tax-advantaged accounts you are eligible for, you can also open a regular brokerage account. It will allow you to invest any extra money you have after you have maxed out your tax-advantaged accounts.

Keep in mind that while a regular brokerage account is a taxable account, you don’t have to pay any taxes until you actually sell your investments. These types of taxes are called capital gains taxes.

What to remember as you learn how to start investing for beginners

Investing is a great way to build a solid financial future. However, there are some pitfalls to look out for as you learn how to start investing. If you can avoid some of these mistakes, then you stand to save yourself thousands of dollars.

Understand the fees (and avoid them)

When you learn how to start investing and begin looking through funds to invest in, you’ll notice that each comes with a set of fees.

In many cases, the fees can range from 0.5% to 2%. Although that tiny swing in percentage points might not seem like an important detail, it can make a big difference in your portfolio’s growth.

In fact, a 2% fee could add up to hundreds of thousands of dollars over the course of your investing career. When you decide to invest, you should make sure to research the fees and minimize them wherever possible.

Prepare with your risk tolerance in mind

When you choose to invest your money, you should assume that you might lose some of your investment along the way. The market will rise and fall and there are plenty of fluctuations.

Although it historically has risen through the years, that is not an indicator that it will continue to rise steadily. It is likely that there will be some dips along the way.

It is important to understand your risk tolerance and consider that as you invest your money. Take our quiz to gain a better understanding of your risk tolerance. Researching your investments is also key when it comes to assessing risk.

You should also think about your investments in terms of what is a long-term goal or a short-term goal. Make it part of your personal finance plan to know how much you’re investing for the near future and how much for retirement, as this can affect how much risk you take with investments.

Diversify with different types of investments

The best way to mitigate your risk in the market is diversification of your investments. You don’t want to pool all of your investments into one particular company that goes under. 

Instead, you want your investments spread out in many sectors of the market. If one area of the market falls, then you will not be left with a badly sinking portfolio. As you learn how to start investing for beginners, try to get a mix of assets like stocks, bonds, mutual funds, and more.

Two great diversified portfolio types to consider are the three-fund portfolio and the all-weather portfolio.

Rebalance along the way

When learning how to invest for beginners, you should plan to stay on top of your investments over time. Make sure that you are still on track with your objectives and that the timeline still fits into your goals.

The market will rise and fall, you’ll need to rebalance to ensure that you don’t leave all of your eggs in one basket.

Automatic rebalancing can also be a great approach to ensuring your portfolio is always in alignment.

Don’t try to time the market

Remember, investing is a long-term strategy to build wealth. You should not try to time the market by buying low and selling high.

Not even the most advanced investors can consistently beat the market. Instead of looking for short-term wins, focus on long-term goals and gains.

Although you won’t build wealth overnight through the stock market, you can with many years of consistent investing.

Don’t forget about taxes

Remember taxes when you are planning out your investments. There are different strategies that you can use to lower your potential tax burden, but they require careful planning.

If you aren’t sure about the tax implications of your situation, then consider talking to a tax professional.

Don’t wait to invest

Although it is important to educate yourself before investing, you should not wait too long to get started. With investing, you want to have the value of time on your side.

The sooner you are able to start investing, the better, as your investments will have more time to grow. That time could lead to significant growth due to the power of compounding.

Avoid making emotional investment decisions

When you learn how to start investing, you will realize that you have some strong emotions attached to your investments.

After all, you are hoping that these investments will lead to a better future. And many people have a fear of loss that may make investing more challenging.

The stock market comes with highs and lows, and you should be emotionally prepared to weather these storms. When the market inevitably drops, you should not pull all of your money out of the market.

Instead, you should wait until it rebounds and you are ready to make a withdrawal. However, this is easier said than done.

In order to avoid a painful experience, make sure to understand your risk tolerance before you start investing. With that, you can choose investments that are less likely to cause panic in your life. Stick to what makes you comfortable, and always make your investment decisions with a clear head.

Remember, nothing happens overnight

You should not assume that your money will grow overnight when you start investing. In fact, it will rise and fall many times on the way to growth.

As you get started, realize that investing is a long-term strategy for wealth building. But it will not make you rich overnight.

What type of investment style is right for you?

The only person who can determine the best investment style for you is you.

You need to think about how old you are, how long until you retire, and what your risk tolerance is. Beyond that, think of your personality and what makes sense for you.

Robo-advisor options are best for people who like to have a little control over their own investments and like technology. Others who prefer some personal guidance may want to work with a financial advisor to discuss their options. After researching, choose what you’re comfortable with.

How should a beginner start investing?

Here are the key steps summarized when it comes to how a beginner should start investing:

• If your employer offers a retirement plan like a 401(k), talk to HR about setting up contributions.
• Whether or not you have a work retirement plan, you can also open an IRA through a variety of online brokers and invest in that.
• To make additional investments outside of retirement accounts, open a regular investment account with a brokerage firm or robo-advisor service.

These three options will allow you to invest as much money as you want!

Is $100 enough to start investing for beginners? 

$100 is absolutely enough money to start investing for beginners! Many online brokers have low account minimum requirements to make investing accessible to more people. Some don’t have an account minimum at all, so you could even start investing with $10 if you want! 

Furthermore, some brokerages offer fractional shares, sometimes called “stock slices” as a way to invest.For instance, if you want to buy a share of a stock or index fund that costs $200, but you only have $100, this would enable you to buy half a share.

Is $1,000 a good start for investing?

Reaching your first $1,000 invested in the stock market is an occasion worth celebrating! That’s a thousand dollars that can immediately get to work and start growing.

If you want to earn extra money so you can invest $1,000 every month, think about starting a side gig. Here are 30+ ways to earn an extra $1,000 a month.

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If you enjoyed this article on how to starting investing, check out this related content:

• Is Now A Good Time To Invest?
• 28 Investment Terms You Should Know
• Bear And Bull Markets: What It Means For You As An Investor
• 6 Best Investing Websites For Beginners: Research And Analysis
• Real Estate Investing For Beginners: Getting Started

These tips make how to start investing for beginners a breeze!

The best way to build wealth through investing is to get started as soon as possible. You can learn how to start investing today! Even if you are just starting with $20, you can build your portfolio over time.

If you want to learn more and make good investment choices, then consider taking our completely free investing course.

You’ll learn more about how to start investing money for beginners, how to research your investments, and how to pick the right broker for you.

And remember that investing is one part of your overall financial health. There are many other things you should also learn about like saving, budgeting, and managing your money. It all fits together like a puzzle—and the picture it shows is a beautiful financial future!

The post Investing Money For Beginners: How To Start Investing Today! appeared first on Clever Girl Finance.

Whether you’ve recently gotten lucky or scrimped and saved for a few years, knowing what to do with 50k is essential. Having money in the bank is a unique opportunity. It means you can grow it and have an even larger safety net.

So, how can you get started, and what are the smartest options? Allow us to take you through what to do with 50k in savings!

How much is $50k and how can you get it?

You may have a significant payout from a previous job or even receive an inheritance from a loved one.

In addition, when you start to cut back, use effective money-saving tips, and use high-interest accounts, you may find that the cents start to turn into dollars fast and you find that you are able to save 50k.

At first glance, $50,000 may sound like a huge chunk of money. If you’re working a minimum-wage job or don’t have a gigantic salary, you could feel it’s out of reach. Or it could be that you are wondering how much 50k a year breaks down to in hours.

What ever your thought process is, the truth is that saving $50,000 is viable for many of us. At the very least, it’s a good goal to have.

And no matter how you have come to have $50,000 in your bank, you need to know how to use it.

What to do with $50k before you invest it!

If you’re lucky enough to have 50k in cash, the obvious move is to invest it.

However, before you look into your options for what to do with the money, getting yourself into a solid financial position is the first step. With that in mind, here are a couple of the admin tasks you should take care of first:

Pay off your debts

It’s much easier to land yourself in debt than it is to get out of it. If you owe money, now is the time to settle things once and for all.

That means learning how to pay off credit card debt fast or repaying outstanding loans.

If you haven’t already got a debt reduction plan, now is a good time to start.

For example, one of the popular strategies that I prefer for paying off debt is to start by paying off high-interest debt, like credit cards.

Sometimes, I can wipe out the debt completely with one large payment. Remember, you need to check the small print of any loans you have taken out.

Paying off debts is rarely a fast process. However, armed with the 50k in cash, you are in a better position than most people.

Figure out a payment plan that works for you—and your other investment plans—and take things from there.

Create an emergency fund

Unless you have a crystal ball, chances are, you can’t see into the future. Since you don’t know what will happen in the months or years to come, you need an emergency fund.

Putting cash aside in case you ever need it will give you a sense of security. Having this pot in place can help you should you face sudden costs, such as:

• Car breaking down
• Losing your job or income
• Facing costly problems in my home
• Needing to travel on short notice

Ensuring the fund is ready and waiting for you will give you the peace of mind you need. When the unexpected happens, you will be in the best position to deal with it.

18 Smart ways to grow $50k in cash

When it comes to what to do with $50k in savings, the important thing is not to let it go to waste. That said, if you are wondering how you can make your money work for you, below are some ideas to get you started. You can also find a wealth of tips in the Clever Girl Finance book, Learn How Investing Works, Grow Your Money!

1. Invest in index funds

If you want to build a successful financial future, you may want to make investing with index funds a part of your long-term strategy.

Index funds are types of stock market investments that follow and track stock market indexes, like the S&P 500, and are typically low cost.

For example, if you invest in an index that tracks the S&P 500, you will be invested in the 500 companies that make up the S&P 500.

When you buy into an index fund, you are essentially investing in every single stock within that fund—without buying individual stocks. It doesn’t end there.

You could also invest in a total market index fund, which splits your money equally across the entire stock market.

The great news about index funds is that because they are not actively managed like mutual funds, the expenses ratios are much lowers which means more of your money can grow!

2. Buy a rental property

$50,000 makes a nice down payment if you want to invest in the property market. One of the most effective ways to capitalize on the market is buying a house to rent out.

While there are additional costs associated with this investment, it could make you a good income.

Before you get started with this venture, consider the logistics of it.

Will you use a management agency to let the property out for you? How “hands-on” do you expect to be? What extra money will you need to maintain the property to a high standard?

If you can answer these questions, you may be in a good position to invest in a rental home.

3. Start a business

Did you know that you could start a business with $50K? If you’ve been thinking about starting a side hustle or business, you can use this money to get things off the ground.

A massive 99.9% of US businesses are small businesses. Read our guide on how to start a business from scratch before you begin planning out your next business venture.

Of course, there’s a whole world of business opportunities out there. You may want to start a business with 50k by setting up a hospitality venture, such as a cafe or a bar.

On the other hand, there’s always the option to start an online store selling bespoke products to a broader audience.

Consider your personal interests and how you can translate them into a startup business.

4. Flip a house

House flipping means buying an old property that desperately needs work, making it over, and then selling it for a profit. Average gross profits on home flips can be quite good.

If I was considering whether this option works for me, I would need to consider how much the renovations will cost, any tradesmen fees, and the price of the property. I will also need a surveyor to take a look at the property before I go ahead and buy it.

I believe that understanding the extent of the work that needs to be done is essential to the investment. 

5. Invest in saving bonds

Next, let’s talk about a traditional way to boost your capital: saving bonds. When you’re deciding what to do with 50K, this is one of the most straightforward options.

Put simply, you buy a bond at face value, wait for it to mature, and then reap the rewards.

If you’re unsure where to start when it comes to investing your money, a saving bond is an ideal option. These are low-risk investments, which means that you aren’t going to lose all of your $50,000 in one unfortunate move. You can rest assured that won’t happen.

One of the biggest advantages of saving bonds is that they are backed by the full faith credit of the American government.

In layperson’s terms, you are not loaning money to a commercial entity but to the government. For that reason, these bonds are considered some of the safest investments for your money. Also, check out more of the best compound interest investments.

6. Boost your retirement savings

Now that you have excess money in the bank, it may be a smart time to increase your retirement savings.

Unfortunately, the truth is that many people out there lack a proper plan. One in four Americans don’t have any retirement savings whatsoever, explains Yahoo Money. If you fall into that category, now is an ideal opportunity to rectify things by creating a sustainable savings strategy.

How many IRAs can you have in your retirement strategy? Believe it or not, you can have more than one, like a Roth IRA or a traditional IRA. Both of these accounts offer tax advantages to help you grow your money over time so you can best protect yourself in retirement.

Take the time to learn the difference between the different types of retirement accounts. Then, look up your contribution limits. Check the yearly allowance for IRA contributions guidelines before you start topping it up.

Other more unique ways to grow $50k in cash!

While real estate, bonds, and retirement investing are all good options for your $50k, there are other ways to use the money. Here are a few ideas:

7. Buy artwork that appreciates

Are you a creative person or just someone who appreciates art? If the answer is yes, you can use your 50k to invest in some masterpieces.

There are many ways to invest in this sector. You can check out the U.S. News guide to buying art as a first port of call.

Consider whether you want to invest in individual pieces, look into fractional share agreements, or even throw your money into an art fund. The more research you do about the art world, the better position you will be in when buying some.

8. Invest in a startup

A startup is a new business that often needs investors to help it grow. You can be part of this!

It can be somewhat risky, but you can increase your chances of success by researching and understanding the startup before investing money.

You can be paid in a few ways, including shares and interest.

Help crowdfund a startup by checking out sites like Wefunder or StartEngine.

9. Invest in farmland

Owning farmland can be a lucrative investment, and it’s one of my favorite investing ideas. You can make money from rent as well as appreciation.

In addition to simply purchasing farmland, you may also choose REITs or crowdfunding to start your investing.

10. Consider cryptocurrency

Cryptocurrency is an alternative method of making money, but it can be profitable.

However, investing in cryptocurrency is not without risk and should be considered carefully.

Cryptocurrency is a new type of digital currency that you can buy. It may not immediately yield a profit, but it may benefit you in the long term. If the prices of crypto increase, you can sell what you own for a profit.

There are a variety of cryptocurrency options. Check out Coinbase to purchase this currency. Popular currency options include Bitcoin, Ethereum and Litecoin.

11. Invest for your children’s education

A great way to invest your money is to start saving for your children’s future with college savings plans.

A college 529b plan is one option for storing money for college because it lets you withdraw the earnings tax-free if they’re used for qualified education purposes.

You might also consider investing in another way, such as opening custodial accounts or even a regular investing option like index funds that you can use later for their education.

12. Buy ETFs

While they seem similar, there is actually a difference between index funds and ETFs, that has to do with the time that they are traded. Exchange-traded funds (ETFs) are an aggregation of stocks, bonds, and other securities.

For this reason, investing in ETFs makes it easier to create a portfolio with diversification than investing in individual stocks.

Another main benefit of ETFs is their very low minimum requirements to get started. It makes them a great option for beginner investors wondering what to do with 50k.

13. Consider real estate investments

Don’t want to buy a house? No problem—you can still try real estate investing for beginners via a real estate investment trust (REIT).

REITs own and/or operate properties like hospitals, warehouses, shopping centers, etc. REITs are publicly traded on stock exchanges, so they’re a great way to get into real estate investing without having to plunk down a down payment on a house—and then maintain that house.

14. Buy certificates of deposit

What is a Certificate of Deposit? Certificates of Deposit (CDs) are savings accounts offered by banks or credit unions.

Basically, you agree to keep your money in that financial institution for a specific amount of time—and they reward you with an agreed-upon APY (annual percentage yield). 

CDs can be a solid portion of your investment portfolio especially for short term savings. But there are both advantages and disadvantages of CDs to consider before investing.

For instance, an advantage is you are guaranteed a specific interest rate and your money is FDIC insured. up to $250,000 A disadvantage if that if you withdraw the funds before the time elapses you may be charged a fee.

15. Open a money market account

There are many different types of bank accounts. To safeguard and grow your $50k, you can also consider opening a money market account.

A money market account offers higher interest rates than a typical savings account.

However, like a checking account, it allows you to write checks.

16. Put money in a high-yield savings account

Investing in the stock market is a great way to help your assets grow. But when figuring out what to do with $50k, don’t forget to maintain an emergency fund!

My idea of a great place to store my emergency fund is in high-yield savings accounts, which offer higher interest rates than typical savings accounts. I’ve found that these account types are also FDIC insured up to $250,000.

17. Invest in dividend stocks

Basically, a dividend stock is any stock that pays out dividends to its shareholders.

Investing in dividend stocks gives you two opportunities to grow your $50k. First, dividend stocks give you the chance to earn income through dividends.

Secondly, dividend stocks can also help you build your overall net worth over time if the stock’s value increases.

18. Contribute to an HSA

An HSA is also know as a Health Savings Account. Importantly, it is a great way to help save for future medical expenses. 

With an HSA, you can both contribute and let your money grow tax-free until you withdraw it to pay for qualified medical expenses.

Pretty much everyone can benefit from an HSA, so if you’re wondering what to do with 50k, it’s well worth learning more about how a health savings account works!  

Expert tip: Diversify your $50k to avoid volatility

One of the best investing tips is to diversify your portfolio. In other words, don’t put all your money in the same place. So if you’re trying to decide what to do with 50k, consider coming up with a few options, instead of just one.

For example, you can keep some money in a high-yield savings account as your emergency fund, invest some money in REITs, and use the rest to buy ETFs.

3 Mistakes to avoid with 50k in cash

If it’s the first time you’ve had this much money or wondered what to do with 50k in savings, you may be excited and want to start using it.

That is completely natural, but you need to slow down. Here are some critical mistakes to avoid:

1. Failing to invest

Having your entire $50,000 sitting in your bank account won’t do you any favors. While it may seem like the obvious move when you don’t know where to start, you are wasting an opportunity here.

You need to be sure that you are making a reasonable return on this money by learning to invest smart. Take a look at our list of ideas or seek independent advice on the issue.

2. Splurging it all on vacations

Fancy heading off to Barbados? What about jet-setting to Dubai? I love vacations, so this is a splurge I have to be aware of!

While we all deserve a treat now and then, spending all your money on a luxury vacation is a mistake. When it’s over, your bank account will be empty, and you won’t have anything to show for it.

That doesn’t mean you have to invest all your money. Splurging a little on yourself can help you get it out of your system.

If there is something that you have always wanted, see if you can afford it. Set aside some cash for vacations and extravagances.

But just because you have $50k doesn’t mean you have to increase your expenses. Instead, remind yourself to avoid lifestyle inflation.

3. Giving the money away recklessly

Be sure to keep your 50K in cash safe! Whether you fall foul to an online scam or are pressured to give your money away to someone you know, there’s no doubt that you will regret doing so.

It’s a sad fact, but when people know you have money, they may try to extract it from you.

While there’s nothing wrong with helping out someone who is genuinely in need—such as a close friend or family member—be aware that people may try to take advantage of you.

Ensure you are practicing how to be smart about money and doing things for the right reason—not because you feel you have no other choice.

How much interest will $50,000 earn in a year?

The amount of interest you can earn on $50,000 in a year depends on what the annual interest rate is. For example, if your annual interest rate is 4%, you could earn $2,000 in interest on $50,000 in a year.

Keep in mind that this number can vary depending on where you invest your money.

Is $50k a lot of savings?

$50k is a lot of savings and definitely an important milestone to celebrate. However, 50k will not be enough to sustain you in retirement, so it’s important to find ways to invest and continue to grow that 50k. 

What is the best investment for $50k?

There is no one best investment for $50k for everyone. But there is one golden rule regarding investing: diversify, diversify, diversify!

So when researching the best investment for 50k, remember to consider a breadth of options, like ETFs, REITs, dividend stocks, etc.

Is $50k too much in savings?

Deciding whether $50k in savings is too much depends on your lifestyle. Generally, it’s recommended to have an emergency fund that equals 3 to 6 months of living expenses. For some people, this may be 50k.

That said, if your living expenses are relatively low, I think $50k may exceed your emergency fund needs. In my opinion, that makes it a good idea to invest at least some of that 50k. 

Articles related to what to do with 50k

If you found this article on what to do with $50 helpful, check out this related content:

• $50k A Year Is How Much An Hour?
• How To Be Smart About Money: 5 Ways
• Do You Have To Spend Money To Make Money?
• How to Grow Your Money: 7 “Must Do” Tips
• Best Compound Interest Investments

You can create great opportunities by being smart with your $50k!

Knowing what to do with 50k doesn’t have to be challenging. The truth is that this is an opportunity, and you can easily grow your money. You might choose to start a business with 50k, invest, or do something else.

In this guide, we’ve covered some of the most effective strategies you can use to make a good return on the lump sum of money.

Use it as inspiration when deciding what to do with your newfound wealth. You might also want to consider, “Do I need a financial advisor?”, think about using robo-advisors, or get independent advice on what the next steps could be for your savings.

The post What To Do With $50K: 18 Smart Ideas To Grow Your Money appeared first on Clever Girl Finance.

When you want to start building wealth through investments, you might be wary of the complexities associated with traditional stock picking. However, thankfully, not all investments have to be complicated or costly. With low cost index funds, you can grow your investments for a great price, so keep reading to find out more about index funds, what makes them cost-efficient, and learb about 16 popular low cost index funds. 

What is an index fund?

An index fund is a sort of investment fund, typically a mutual fund or an exchange-traded fund (ETF), designed to replicate the performance of a specific market index. These funds aim to mirror the returns of an index like the S&P 500, Dow Jones Industrial Average, or the Nasdaq Composite by holding a portfolio of securities that resembles the composition of that index.

What makes an index fund low cost?

The cheapest index funds generally have very low expense ratios, usually below 0.65%. These expense ratios are how much of the fund’s assets are used for operating expenses.

In other words, if you buy a fund for $100 and it has an expense ratio of 1%, that means $1 of your money will go towards paying for operations every year. 

Unlike actively managed mutual funds, which involve teams of financial experts making decisions about which stocks to buy and sell, index funds operate on a passive strategy. They aim to have a similar performance to a specific market index, for example, the S&P 500 or the Nasdaq. 

Because there is no active management involved, the costs associated with research, analysis, and constant trading are significantly reduced. Because low cost index funds rarely buy or sell securities, they incur fewer transaction costs. This also makes them more tax-efficient, potentially saving you even more money. 

Things to think about when selecting an index fund

While low cost is one factor to consider, there are other things to consider when investing with index funds to ensure they align with your financial goals and risk tolerance:

Investment goals

Think about your goals and determine your investment objectives.

For instance, are you looking for long-term growth, income, or a balance of both? Why do you want to invest in index funds? Knowing your financial goals can help you figure out which low cost index funds make the most sense for you. 

Risk tolerance

Assess how much risk you’re willing to take and how risk averse you are. Different index funds may track different markets with varying levels of risk, but all investing is risky.

If you’re okay with the possibility of losing a good portion of your money for a potentially high return, then certain index funds might make more sense. However, if you don’t want to take any risk, then a more conservative investment fund could be the best solution. 

Overall portfolio strategy

Before you purchase some of the least expensive index funds, consider how they fit into your broader investment portfolio. Your strategy is a type of roadmap to help you achieve your financial goals. Keep your objectives in mind, especially when the market is volatile.

Remember that diversification is key to spreading investment risk.

For example, other types of strategies might be looking at short-term investments, passive investments, or investing in a mix of low and high-risk investments.

Think long term

Long-term investing is the goal for index funds. Make sure your investment horizon matches this strategy.

If you are looking for a short-term investment of, say, less than six months, then another investment vehicle might make more sense for you. 

16 Popular low cost index funds

Index funds are one great way to begin investing in the stock market, particularly if you have stock market fear. Want to start investing in a low cost index fund but aren’t sure where to start? Here are 16 cheapest index funds that you can research.

1. Fidelity ZERO Total Market Index Fund

Symbol: FZROX

Expense ratio: 0.0% 

One of the most unique things about the FZROX is that the expense ratio is 0%. It also charges no commissions and has a zero minimum structure. This makes it among the least expensive index funds.

It was launched by Fidelity in 2018 to capture the entire stock market and includes stocks like Apple and Microsoft. However, like other total market index funds, it is also exposed to the volatility of the broader market. 

2. Schwab Total Stock Market Index Fund

Symbol: SWTSX

Expense ratio: 0.03% 

This fund by brokerage firm Charles Schwab has been around since 1999 and tracks the entire market, as measured by the Dow Jones U.S. Total Stock Market Index. It’s a straightforward, low-cost investment fund that gives investors access to the entire U.S. stock market with stocks like Meta and Exxon Mobil.

It’s a fund designed to give investors exposure to all small, mid, and large-cap companies across the country. 

3. SPDR S&P 500 ETF Trust

Symbol: SPY

Expense ratio: 0.09% 

This index fund created by State Street Global Advisors in 1993 correlates with the performance of the S&P 500.

In other words, if you were to invest in all companies from the S&P 500, like Berkshire and UnitedHealth Group, you would likely get similar results. It gives investors exposure to the biggest U.S. companies. 

4. Vanguard Total Stock Market Index Fund

Symbol: VTSAX 

Expense ratio: 0.04% 

Started in 1992, this fund by broker Vanguard provides exposure to the entire U.S. equity market. That includes both small, mid, and large-cap growth and value stocks.

In other words, it gives investors the opportunity to track all U.S. public companies, including Apple, Tesla, and Facebook. Because of that, it is also more volatile, as the fund is exposed to the overall dips in the broader stock market. 

5. iShares Core S&P 500 ETF

Symbol: IVV

Expense ratio: 0.03% 

The IVV is another index fund created by brokerage company BlackRock in 2000 that invests in large U.S. companies. It is a low cost fund giving investors exposure to 500 of the largest U.S. companies by market cap.

It’s usually for investors wanting long-term exposure to larger companies, and can be great if you’re wondering, “is now a good time to invest?”

6. Fidelity 500 Index Fund

Symbol: FXAIX

Expense ratio: 0.015% 

Fidelity created this fund in 1988, and it also aims to track the returns of the S&P 500. It keeps track of the performance of the largest companies which make up the S&P 500, which is great if you prefer a straightforward approach to investing.

7. Fidelity U.S. Bond Index Fund

Symbol: FXNAX

Expense ratio: 0.025% 

If you want to invest in bonds instead of stocks, the FXNAX does just that. Another fund by Fidelity started in 1990, it follows the price of debt securities in the Bloomberg U.S. Aggregate Bond Index.

In other words, it invests in U.S. debt, including government and corporate debt and mortgage-backed securities. 

8. Vanguard Real Estate Index Fund

Symbol: VGSLX

Expense ratio: 0.12% 

This index fund by broker Vanguard from 2001 invests in real estate investment trusts (called REITs) like Public Storage and American Tower Corp.

While real estate can be expensive, a real estate fund is one way to get exposure to the housing market without needing to buy your own property and it can be especially helpful when learning real estate investing for beginners. 

9.  Fidelity Real Estate Index Fund

Symbol: FSRNX

Expense ratio: 0.07% 

The FSRNX index fund by broker Fidelity aims to get returns that correspond to the total return of REITs and other similar real estate investments.

Created in 2011, it includes exposure to companies like Crown Castle and Public Storage. Like the VGSLX, this index fund is geared towards investors who want exposure to the real estate market. 

10.  Fidelity Total International Index Fund

Symbol: FTIHX 

Expense ratio: 0.06% 

Another Fidelity fund, the FTIHX index fund, gives investors exposure to international markets. That includes established markets like Europe and other developing markets like India.

Started in 2016, it’s designed for investors who want to diversify their investments outside of the U.S. 

11.  BNY Mellon Core Bond ETF

Symbol: BKAG

Expense ratio: 0.0% 

With no expense ratio, the BKAG is among the cheapest index funds. Started by investment manager BNY Mellon, its goal is to track the performance of the Bloomberg U.S. Aggregate Total Return Index.

12.  Schwab S&P 500 Index

Symbol: SWPPX

Expense ratio: 0.02% 

Like a lot of other funds on this list, the SWPPX index fund by broker Charles Schwab also tracks the S&P 500. This fund started in 1997, captures about 80% of the current market capitalization across the country, meaning your investments are exposed to a good chunk of the U.S. economy. 

13.   Vanguard Growth Index Fund

Symbol: VIGAX

Expense ratio: 0.05% 

This index fund by broker Vanguard focuses on U.S. companies that tend to grow quicker than the broader market. Created in 2000, it focuses on large-cap growth stocks, which means it can be a bit more volatile than other broader indexes and doesn’t always follow broader market movements. 

14.  SoFi Select 500 ETF

Symbol: SFY

Expense ratio: 0.19% 

While the SFY index fund does have a higher expense ratio than some other funds on this list, at the moment, the expenses are waived. That means you can invest in this low cost index fund at no extra cost for the time being.

The SFY fund was created by broker SoFi in 2019 and is made up of the 500 largest U.S. companies, but the amount invested in each one varies based on the growth rate of the company. 

15.  Vanguard S&P 500 ETF

Symbol: VOO

Expense ratio: 0.03% 

This ETF by broker Vanguard began in 2010 and invests in stocks that are in the S&P 500. Like other index funds focused on the S&P 500, it aims to track the index’s return.

In other words, the VOO index fund tries to have the same return as the top 500 U.S. companies. 

16. Vanguard Total Bond Market Index Fund

Symbol: VBTLX

Expense ratio: 0.05%

This index fund by broker Vanguard covers the U.S. bond market. Created in 2001, it invests in a number of investment-grade bonds, such as U.S. Treasuries and mortgage-backed securities.

It invests in a variety of bonds to represent the fixed-income market and can be thought of as a core bond index fund.

Expert tip: Look for investments with consistent track records

When investing in index funds, focus on consistency and reliability, especially when learning how to invest with little money. Look for funds that have a long track record of closely tracking their respective indices and have a history of decent returns.

In addition, carefully consider different factors like the index funds dividend yield, expense ratio, and fund size and make sure it matches up with your individual investing goals.

What is a low cost index fund?

Low cost index funds are a way to provide broad exposure to a particular segment of the financial markets without the high fees associated with more traditional investments.

A low cost index fund is a passive investment vehicle created to replicate the performance of a specific market index while keeping expenses minimal. Index funds are known for having low expense ratios.

Additionally, index funds do not rely on active stock selection, market-timing strategies, or buying individual stocks. Instead, they hold a diversified portfolio of securities that mirror the composition of the chosen index.

Are low cost index funds worth it?

Low cost index funds are often considered a smart choice for investors seeking broad market exposure with minimal fees. Over the long term, the lower costs can significantly impact returns, making them a worthwhile investment.

For this reason, including them in your portfolio can help to keep it diversified and inexpensive.

Is the S&P 500 a low cost index fund?

No, the S&P 500 is an index, not a fund, so it can’t be traded in directly. It’s a stock market index that represents a group of 500 of the biggest publicly traded U.S. companies. It serves as a benchmark for the overall performance of the U.S. stock market.

However, it’s possible to invest in the companies that comprise of the S&P 500 by investing in low-cost funds or ETFs that track the index. 

Can I purchase index funds with only $100?

Yes, it is possible to buy index funds with $100. Many index funds have low minimum investment requirements, for $100 or even less.

This accessibility makes them suitable for a wide range of investors learning how to invest with little money.

Some financial institutions also offer fractional shares of investments, which allow investors to buy a part of a share for even less than $100.

Articles related to index funds and investing

If you learned something new from reading about inexpensive index funds, check out these other articles next!

• Index Fund Investing: How it Works And Best Funds
• The Difference Between Index Funds And ETFs
• How to Grow Your Money: 7 “Must Do” Tips
• The 3 Fund Portfolio: Simple Investing That Works

Find the best and cheapest index funds for you!

If you want to start investing but aren’t sure of the best way, investing in a low cost index fund could be a good way to start.

Additionally, some of the least expensive index funds allow investors the chance to diversify their holdings. Investing in an ETF or index fund is a simple and easy way to learn how to start investing. 

Just remember that investing comes with risk. Keep working toward your long-term financial goals and even check out examples of financial goals to keep in mind and consider your risk tolerance before you start investing in low cost index funds. 

The post 16 Popular Low Cost Index Funds appeared first on Clever Girl Finance.

On your road to building financial wealth and developing your financial wellness, one of the most important things to remember is to diversify, diversify, diversify. Diversifying includes broadening your investment portfolio to include highly liquid investments.

Liquid investing offers the opportunity to build your wealth while keeping your funds easily accessible. With the help of liquid investments, you can steadily grow and track your net worth without tying up all of your funds in an inaccessible investment opportunity.

Not sure where highly liquid investments have a place in your portfolio? Here’s your primer on the subject, along with some of your best options to consider to get started!

What is the definition of liquidity?

To fully understand what liquid investments are, it helps to understand liquidity.

What does liquid net worth mean, and what does liquidity mean? Liquidity means you have a sufficient amount of accessible liquid assets that you can easily convert into cash. E.g., your liquid net worth, when you add all of your liquid assets together and subtract your liabilities.

Liquid investments are types of investments that you can smoothly convert to cash. 

For your day-to-day life, this basically means you have enough cash (or cash equivalents) on hand so you can pay all your expenses on time without bills piling up.

The ease of access makes a liquid investment a great place to store your emergency fund. Another useful purpose for a liquid investment is a place to build your savings as you work towards a major purchase, such as a car or a down payment on a home.

On the other hand, an illiquid investment would require you to relinquish regular or easy access to the funds in favor of a higher potential return. It could also mean that if the investment has a short term decline, you may lose money if you liquidate it at that time.

Highly liquid investments 101

As you know, liquid investments are assets that can easily be converted into cash in a short amount of time with little to no decrease in their value. Highly liquid investments, on the other hand, are simply assets that can be most easily and quickly converted into cash.

You may also hear highly liquid investments referred to as cash equivalents. This is because people can usually have confidence that they can easily exchange their liquid investments for cash at any time, whenever they need.

But there’s more to liquid investments than just being cash equivalent.

Factors that make an investment liquid

In order for an investment to be a highly liquid investment, it must meet a number of factors:

1. The asset must be in an established liquid market.
2. The asset must maintain a large number of readily-available, interested buyers.
3. The asset must be able to be transferred easily and securely and also maintains its value.

Why are highly liquid investments important?

If you’ve done any reading about why personal finance is important and how to strengthen your personal finances for today, tomorrow, and the future, then you’ve undoubtedly read about the importance of investing in retirement accounts, which is different from liquid investing.

But while fattening up your retirement accounts and investing smartly to plan for retirement savings should certainly be a top priority, you also need to think about the here and now.

Being prepared for the near future makes highly liquid investments very important.

Low-risk investing for the near future

Owning liquid investments means that you can pay for your living expenses today. It also gives you a comfortable cushion to prepare you to pay for any emergencies that may come your way.

Liquid investments are a great tool when you’re saving for a short-term financial goal. This means you can incrementally grow your funds and then still easily access the cash you need in the near future. It also gives you an opportunity to learn how to start investing but with low risk.

How near is the near future? Liquid investments are a good option when you want to be able to use that cash in less than three years.

The easy access to cash makes highly liquid investments a great option for saving for things like an emergency fund, a down payment for a new house, or a wedding.

The downside to highly liquid investments

Remember the first rule to investing: diversify, diversify, diversify.

Although liquid investments can be very advantageous and should definitely make up a portion of your overall investment portfolio, you definitely do not want to rely solely on liquid investments to build your wealth.

What’s the catch with highly liquid investments?

Well, the more liquid an asset is, the less its value will increase over time.

For example, suppose you’re saving up for a big purchase in the near future.

You may choose to maintain some funds in cash, one of the most highly liquid investments. But over time, the cash won’t be able to compete with inflation. Inevitably, its purchasing power will decrease as the years go by.

This is why preparing for retirement is about more than just saving cash—it’s about investing wisely with various types of investments.

To grow your wealth over time and build long-term financial health, the key is to have a mix of different assets. These assets include highly liquid investments, among others, like passive real estate investing or even investing in cryptocurrency.

As with all financial choices, there is a balance between risk and access. You’ll need to decide for yourself which portion of your portfolio will be curated as liquid investments.

12 Highly liquid vs short term highly liquid investments

Of course, not all liquid investments are the same. Some assets are more liquid than others.

For instance, there are highly liquid assets and short term highly liquid assets.

The biggest variable among liquid investments is the time to conversion. Which just means how easy it is and how long it takes to convert an asset to cash. And the easier it is to convert an asset to cash, the more liquid it is.

Short term highly liquid assets and accounts

Short term highly liquid investments can be accessed quickly and easily. They may be switched to cash within a year or less, although you can hold onto them as investments for longer if you want.

1. Cash

Cash is the most liquid asset among short term highly liquid investments. You can either hold the physical currency yourself or easily access it via ATM withdrawals.

The downside to cash is that you aren’t earning any interest, so it will be difficult to keep up with inflation.

2. Treasury bills and treasury bonds

Treasury bills, also called T-bills and treasury bonds or T-bonds, are highly liquid assets that are some of the most stable kinds of bonds, as the United States government itself backs them up. Holding on to the bond will earn you interest up until the maturity date.

But if you need cash fast, you can also sell them sooner, making them incredibly versatile.

3. No-penalty certificates of deposit

Wondering what is a certificate of deposit? It’s a way to save money and earn interest at the same time through your bank, but in a relatively risk free way. You leave your money in the account for a set time and earn interest.

With certificates of deposit (CDs), you can usually earn higher interest rates than you would with a standard savings or checking account. The catch? It’s usually more difficult to withdraw from a CD before its maturity date.

But if you invest with a no-penalty CD, you can tap into your funds more easily as a short term highly liquid investment, without having to pay a penalty if you withdraw early.

4. ETFs

With exchange-traded funds or ETFs, you can invest in multiple stocks instead of the stocks of just one company. But don’t forget—ETFs are just as volatile as the market.

There’s no telling whether your ETFs will be worth more or less when you’re ready to sell them. But you are able to sell them freely whenever you need the cash i.e. ETFs can be traded anytime during the trading day from 9.30am to 4pm EST. This makes them an important liquid investing option.

5. Money market funds

These are mutual funds that invest specifically in highly liquid, near-term investments. Investors will turn to money market funds because they offer high liquidity with very low risk, so they’re a great option if you need to save for a short-term goal.

Money market funds should not be confused with a money market account, which is a sort of savings account that also allows you to earn interest.

6. Interest-bearing checking account

Checking accounts come in second after cash as being the most liquid asset. While checking accounts aren’t usually a place for investing, there are some options that offer interest.

Some offer up to 5.3% APY, so it is worth considering if you need access to funds, but you don’t want to forego the opportunity to make some interest.

7. High-yield savings accounts

A high-yield savings account will also offer a high interest rate, but it will be slightly less liquid.

For example, banks may restrict your number of monthly withdrawals.

But it is still relatively easy to withdraw your money with this type of account, and you can find many accounts with a competitive APY.

Mid to long term highly liquid assets and accounts

Mid to long term highly liquid assets and accounts can still be accessed relatively quickly and easily but often not as fast as those listed above. They are an important part of a diverse portfolio or an all weather portfolio, and you should consider a few of them.

8. Certificates of deposit

We already know that CDs are a great option for a highly liquid investment. If you don’t need a short-term, highly liquid asset, you can forgo the no-penalty CD for a traditional option. Terms from a CD can range from 6 months to 5 years.

You can decide in advance how long the term is before you can remove your funds from the CD.

CDs can earn you a good APY, sometimes up to 5.35%!

9. Individual stocks

Individual stocks are some of the easiest investments to liquidate—but they are also the most volatile. Meaning you may face a loss if you need to liquidate your assets while the stock market isn’t in your favor. It’s important to learn how to research stocks before you begin investing.

Since they are volatile, stocks are not the safest choice for building an emergency fund, but they are still an important part of building a diversified portfolio, especially with liquid investing.

To get started with buying stocks in companies, you might talk with a financial professional, set up a brokerage account, or choose a robo advisor. And there are different stock options, such as individual stocks and also stock mutual funds or ETFs.

10. Funds (Index funds and Mutual funds)

A lot of investors like investing in funds like index funds and mutual funds because they offer an easy way to diversify your investments. A fund can invest in an aggregate of bonds, stocks, etc., by grouping your money with other investors’ money.

The catch is, though, that with index funds and mutual funds only trade once per day at the close of the market, making them slightly less liquid than ETFs or stocks. Mutual funds are also known to have higher management fees than index funds.

11. Taxable investment accounts

Taxable investment accounts can hold stocks, bonds, ETFs, Index funds and mutual funds. You can open this kind of account via a brokerage. Once you sell your assets, they’ll be available as cash, usually within days.

Remember, though, that your assets will be vulnerable to market conditions, so you may have to sell them at a loss in some cases.

12. Precious metals

While not a popular choice for investing, precious metals can actually be both liquid and illiquid investments.

Whether they are liquid or not depends on several things, including where you store your metals and how readily you can find dealers to make an exchange for cash.

Expert tip: Know your risk tolerance

Before you decide to invest any money, you need to know how comfortable you are with risk. Take some time to evaluate if you prefer low risk options like bonds, CDs, and high-interest accounts, or if you are okay with riskier investments such as stocks.

Ideally, you should have a good mix of different types of investments, but you need to know what will work for you and what won’t before you begin.

When does it make sense to pursue a liquid investment?

It makes sense to pursue a liquid investment when you may need to tap into the funds at short notice.

With that, these investments are best if you are saving for a big purchase or want to have quick access to cash as a part of your emergency fund.

They have their place in any financial planning process. But you should also consider illiquid investments that could provide higher potential returns.

What is the most liquid investment?

The most liquid of all the assets you can have is cash, and the most liquid of investments that hold cash and are still highly liquid include interest bearing accounts, no-penalty CDs, bonds, ETFs, and money market accounts.

These all earn interest and give you the option to easily withdraw funds, but some are more volatile than others.

What is liquid vs non liquid investments?

A liquid investment vs non liquid investment is defined by how easy it is to withdraw your money. Liquid investments make it easy to get cash quickly.

Non-liquid ones are not as easy to withdraw from, and there may be fees involved in some cases.

With a non-liquid investment, you may be forced to accept less money than you’d like for a sale if you’re thinking, “I need money desperately!” as is the case with real estate, etc. And getting cash will be a slower process.

Then there are illiquid assets (or nonliquid assets). While illiquid assets can make up a very valuable part of your overall portfolio, you can’t easily convert them to cash or sell them without taking a loss on the sale.

Examples of illiquid assets might be collectibles, estates, or other intangible assets.

Are liquid investments better?

There are some circumstances where liquid investments are better, including if you need the cash quickly or aren’t sure when you will need it.

But non-liquid ones also have their place, especially when it comes to growing your money long term and you should have a combination of both for a diversified portfolio.

What does it mean to be highly liquid?

Highly liquid means that you can easily convert the investment to cash without losing money in the process. You should be able to get your money back in a fairly quick and convenient manner.

Having highly liquid assets is a smart idea when you want to make some interest but also have access to your cash at all times.

Articles related to highly liquid investments

If you enjoyed reading about investments, read these articles next!

• What Does Liquid Net Worth Mean And How Do You Calculate It?
• Overall Net-Worth VS Liquid Net-Worth: There’s A Difference!
• 10 Most Useful Personal Finance Ratios And How To Apply Them
• What Are Investable Assets And How Can You Build Yours?

Meet your financial goals with highly liquid investments!

Liquid investments make up a key part of any healthy financial portfolio. You can leverage them to achieve your short terms goals while adding additional diversity to your investments.

Start by doing your research on the different types of highly liquid investments, including short term ones, and then chose one (or several) to invest in. You can then add on additional investments as you feel more comfortable.

As mentioned, having these investments is an essential part of any portfolio, but it is just one step in the process of getting rid of financial insecurity. Continue to learn more about how investing works and how to build your financial wellness.

The post 12 Highly Liquid Investments To Have appeared first on Clever Girl Finance.

When you’re new to investing, it can seem like there’s a lot of information to learn. But you have to start somewhere—so you might as well start with the best investing websites right off the bat!  

These days, the best investment websites don’t just throw you in the deep end to figure everything out yourself.

Instead, they equip you with the knowledge and tools you need to make investment choices and use their platforms successfully. From educational resources to trading simulators to robo-assistants, the best investing websites have a ton of useful features to discover.

So let’s explore six of the best investment websites for beginners and understand how to use them for research and analysis to learn how to start investing!

But first, why are these the best investment websites?

What makes the best investment websites the best?

Different people often have different criteria for selecting the best investing websites. So that means it’s important to know which factors they care about and why. 

For instance, one person might deem the best investment research websites to be ones that tell you things like, “This company is hot right now! Buy this stock today!”

Personally, I tend to stay away from investment analysis sites like that because data has shown that picking individual stocks is rarely the most successful way to invest. Even professional hedge fund traders tend to under-perform index funds, according to CNBC!

So you should be wary of information that promises or implies that you’ll be able to get rich quickly with a certain stock or by day trading. (Learn more about the advantages of investing with index funds!) 

In this article, we’ll focus more on the best websites that make it simple to start investing and then grow your financial knowledge.

We’ll be looking for things like:

• Educational resources, as well as investment tools
• A user-friendly layout
• Free or at least low fees
• Updated features
• Options for both automated and manual investing
• Great analytics to help you monitor your results/progress
• Solid security & privacy
• Mobile app access
• Responsive customer support

With this in mind, let’s get started!

6 Best investing websites for research (and taking action!)

As we go over the six best investment websites, we’ll be looking at a few different things.

First, we’ll see what kind of resources are available to help beginners build their investment strategies.

Then, we’ll look at the features that stand out in each of the best investing websites.

Finally, we’ll sum up what makes the site a great choice for beginner investors. 

Most of the websites below have educational resources and options to turn your new knowledge into reality by opening your own accounts. So that means if any of these platforms stand out to you, you can start your investment journey as early as today!

1. Fidelity

Fidelity is one of the most popular investment firms out there—and for good reason! Founded in 1946, it’s a well-established firm with a great track record and a diverse range of investment options.

For instance, they have their own collection of index funds with no expense ratios or minimum investments (AKA cheap and accessible for beginners)!

In addition, it offers a user-friendly platform with research tools and learning resources for investors of all levels. 

Fidelity research & education

You’ll find a diverse range of resources on Fidelity, including articles, videos, webinars, and more.

The Fidelity Learning Center features insights on investing, retirement planning, and other financial topics. Topics can be as basic as “What Are Stocks?” and range to more complex strategy talk.

Other research tools on the platform include stock search tools, market analysis tools, and independent research reports. 

Fractional share investing

Invest in high-priced stocks and funds with smaller amounts of money.

Retirement planning tools

Fidelity provides retirement planning tools, including calculators, educational content, and retirement income planning help.

Robust mobile app

Want to manage your investments on the go? Fidelity’s mobile app provides easy access to account management tools.

Robo-investing through Fidelity Go

Fidelity Go is great if you’re interested in a “set it and forget it” investing strategy. Personalized robo-advisors like Fidelity Go are also a cheaper way to have your investments managed for you.

Is Fidelity good for beginners?

Whether you’re new to investing or you’re ready for the next level, Fidelity is a great place to gain knowledge.

The Fidelity Learning Center provides valuable content to help beginners understand investing concepts, while the user-friendly platform and mobile app make it simple to jump in and start your own accounts.

2. Charles Schwab

Another important name in the brokerage space, Charles Schwab was one of the first firms to push the industry toward low-cost trading.

In order to make investing more accessible to all, they got rid of trade commissions entirely in 2019!

In addition, their recent acquisition of TD Ameritrade means users will benefit from the best features and resources from both platforms.

Charles Schwab research & education

Charles Schwab offers a huge array of educational content through its Insights & Education section, covering investing strategies, market updates, retirement planning, etc. They even have an original podcast called Choiceology.

Schwab also provides its clients access to third-party research reports and tools. The brokerage offers webinars, workshops, and online courses to help investors improve their skills.

Once the merger with TD Ameritrade is complete, Schwab investors will also have access to courses and resources from its Education Center. Also moving over is TD’s popular thinkorswim platform which offers paper trading and in-depth technical analysis tools. Paper trading is a simulation of trading without using real money.

Schwab intelligent portfolios

Schwab Intelligent Portfolios is a robo-advisory service that creates diversified portfolios based on how risk averse you are and your goals.

Global trading

Schwab provides access to international markets and foreign currency trading.

Schwab stock slices

Stock slices are Schwab’s version of fractional investing—buy partial shares of popular stocks for as little as $5.

Thematic investing

Align your passions and values with your investments with Schwab’s “thematic stock lists” feature. From sustainability to artificial intelligence, this lets you invest in the future you want to see.

Is Charles Schwab good for beginners?

Charles Schwab is one of the best investing websites for beginners, offering a mix of educational resources and tools.

For instance, its robo-advisory service simplifies portfolio management, and the educational content helps beginners grasp trading basics. The platform is easy to use for various skill levels, though beginners may find the range of features a bit much initially. Schwab also has a well-reviewed mobile app. 

3. Vanguard

Vanguard is well known for its focus on low-cost index funds and ETFs.

In addition, one thing that really sets it apart is that there are no private owners or shareholders—the owners of Vanguard are its clients.

Founder John Bogle set it up this way in order to ensure that Vanguard’s interests would always be aligned with the interests of its investors. 

Vanguard research & education

Vanguard’s educational focus is on long-term investment principles and cost-effective strategies. While it doesn’t offer as many tools as some other brokers, the site provides investors with a library of research and educational articles, webinars, and calculators to help them understand key investment concepts.

Ownership structure

As mentioned in the intro, Vanguard is client-owned, meaning its funds are owned by the investors in those funds.

Low-cost index funds

Vanguard is known for pioneering low-cost index fund investing, helping reduce overall investment expenses, and encouraging a patient, long-term investment philosophy.

Vanguard personal advisor services

The company offers a hybrid robo-advisory service combined with access to human financial advisors.

Portfolio watch feature

A tool that analyzes your portfolio to make sure your investing strategy matches your goals so you can follow your dreams. 

Is Vanguard good for beginners?

Compared to some of the other sites on this list, Vanguard’s website and features are more basic.

However, Vanguard’s simple interface and focus on long-term investing may be good for beginners looking for a passive investment approach. It’s mainly designed for buy-and-hold investors who don’t necessarily need the most modern features. (Luckily, it is modern enough to have its own app!)

4. InteractiveBrokers

InteractiveBrokers is known for its advanced global trading platform and a broad range of investment options, including stocks, options, futures, and more.

It caters to active traders and offers competitive pricing, advanced charting tools, and global market access. Of course, they also let users trade on the go through the IBKR Mobile app.

InteractiveBrokers research & education

Even though it’s on the advanced side, InteractiveBrokers makes the list because of its financial education platform at Trader’s Academy. If you want to really deepen your knowledge of investing, this is a great resource. 

The courses at Trader’s Academy are very thorough and explain the theories underlying each concept. You can learn about everything from economics to how the US labor market works, to options and stocks, and much more.

There are also courses that relate specifically to using the InteractiveBrokers platform if you’re interested in giving it a try.

Comprehensive investment variety

You can trade almost any type of investment here, even more niche things like investing in cryptocurrency.

Paper trading

Users who have approved, funded investing accounts can also open paper trading accounts to learn and experiment.

Advanced trading tools

Although this is less important to beginners, the platform is famous for its powerful trading platform with advanced features, including customizable algorithms.

Impact dashboard

Impact dashboard helps conscious investors build a portfolio that matches their values.

Is InteractiveBrokers good for beginners?

As a brokerage, InteractiveBrokers is almost certainly the least beginner-friendly option on this list. After all, it has a complex interface and a focus on advanced trading tools.

However, their Trader’s Academy is a standout when it comes to educational resources. Since you don’t even need an IB account in order to access the courses, it’s worth checking them out.

5. Merrill Edge

Merrill Edge is the online brokerage of Bank of America. It offers a solid array of $0 minimum investment options and research tools on a user-friendly platform.

It’s a good option for Bank of America customers for its seamless integration with the bank’s services and its accessibility to a variety of financial products.

Merrill Edge research & education

In partnership with Morningstar, Merrill Edge has developed an Investing Classroom. Here, you’ll find a series of short courses on stocks, funds, bonds, ETFs, and portfolio types. This makes it one of the best investing websites.

Courses also come with quizzes, which you can use to gauge your knowledge or test what you’ve learned. Don’t miss the webinar series, which covers topics from financial psychology to sustainable investing.

In their Tools & Calculators section, you’ll find resources to help you crunch the numbers for college planning, retirement goals, and general personal finance. Users also have access to the BofA Global Research platform, which provides research reports, market insights, and analysis from Bank of America. 

Bank of America integration

This brokerage seamlessly integrates with Bank of America accounts, providing easy transfers and account management.

Preferred rewards program

BofA members who enroll in preferred rewards get banking benefits (e.g. an interest boost on savings and credit card bonuses).

Merrill guided investing

This is an automated investing service that will help you build and rebalance a portfolio that fits your goals.

Is Merrill Edge good for beginners?

If you’re already a Bank of America customer, using Merrill Edge should feel natural and familiar. Its trading tools may be a little more basic compared to other platforms, but if you’re a long-term investor, you don’t need anything fancy. You can also manage your accounts and investments through the Merrill Edge app.

6. Investopedia

This last one is a little different because it’s the only one that isn’t a brokerage, but it is one of the best investing websites! Investopedia is one of my favorite sources of financial knowledge.

It has a wealth of educational articles, recommendations, and news about current market events. No matter what subject they’re covering, the goal is to simplify concepts in a way that anyone can understand.

Investopedia research & education

Essentially, the whole Investopedia site is about research and education.

Content ranges from simple concepts like stocks and bonds to more advanced things like technical analysis. Their mix of information with real-world examples and interactive tools helps make the investing process easier, empowering newcomers to make informed decisions. 

Comprehensive educational resources

What sets Investopedia apart is its ability to simplify complex financial terms and concepts, making them easily understandable for beginners.

The resources on Investopedia are accessible to individuals at all levels of expertise in finance who have money goals.

Realistic stock market trading simulator

The platform offers a highly realistic stock market trading simulator that helps users practice trading stocks, options, and ETFs using virtual money. This experience helps users learn how to navigate the dynamics of the market without real financial risk.

Up-to-date market insights

Investopedia provides up-to-date market news, analysis, and trends, keeping readers informed about the latest developments in the financial world. This feature enables investors to stay aware of market shifts and, in turn, make more informed investment decisions.

Is Investopedia good for beginners?

Overall, Investopedia is a good starting point for beginners to build a strong foundation in the world of investing. And their stock market simulator is free, so give it a try!

Expert tip: You can use more than one investing website!

In the past, many investors picked one brokerage, kept all their investments there, and stayed loyal to it forever. Today, you’ve got options with the best investing websites!

Want to do your research on Investopedia, start a retirement account at Fidelity, and keep a “fun money” account at InteractiveBrokers? You can! Or, you can experiment with a few different sites and choose your favorite once you have more perspective and experience.
 
Before you open any new account, make sure to read the terms and conditions so you’re aware of any potential fees or restrictions. Once you have an account (or two or three), be sure to monitor it regularly to make sure your goals are on track.

How can I invest $1,000 right now?

The best way to invest $1,000 right now is to take a look at your current financial situation and your immediate goals. Let’s check out a couple of examples!

First, if you don’t have an emergency fund, then use the $1,000 to start one! Here’s a quick guide on creating an emergency fund and why it matters.

However, if you’re carrying high-interest debt, like credit cards, it might make more sense to pay extra on that if you’re unsure whether to pay off debt or save. (This way, you’ll save money on future interest payments!)

If you already have an emergency fund and minimal debt, then it’s time to invest! I suggest starting by opening a retirement account to build retirement savings, like a personal IRA or a 401(k) through your work. These accounts are available at many of the best investment websites listed above!

Once you have an account, use the above-mentioned research and education tools to figure out what stocks, bonds, or funds to buy with your $1,000 within the account.

Where to invest 100 dollars in stocks?

Whenever you find yourself with an extra $100 to invest in stocks (or even an extra $20), you can use that money to help build your financial future! One great option is to invest in fractional shares of index funds or ETFs.

Let’s say that you’d like to invest in a certain ETF, but it costs $200 per share, and you only have $100. At brokerages that allow you to buy fractional shares, you can use that $100 to buy half a share of your chosen ETF. This way, you don’t have to wait to get the investments you want!

Here are some other ideas for how to maximize small investments and invest smart. 

What is the most trusted investment company?

Some of the largest and most trusted brokerage firms include Fidelity, Vanguard, and Charles Schwab. Trust is crucial when you’re deciding where to keep your money. If this is a big consideration for you, stick with one of the tried-and-true options!  

On the flip side, it’s usually better to avoid the newer, shinier investing apps that don’t have an established track record yet. Here are some signs an investment app isn’t trustworthy.

Articles related to the best investing websites

If you enjoyed reading about investing websites, check out these other articles about investing!

• Investing Money For Beginners: How To Start Investing Today!
• Popular Low Cost Index Funds
• Real Estate Investing For Beginners: Getting Started
• Invest Smart: How To Maximize Small Investments

Pick the best investing website for you and get started!

Now that you have an idea of the best investing websites to use for research, analysis, and trading, it’s time to make your own plan!

Start by learning how to start investing and make a game plan. You can also enroll in free CGF courses on investing and business to continue growing your financial knowledge.

The post 6 Best Investing Websites For Beginners: Research And Analysis appeared first on Clever Girl Finance.

Whether you received a large bonus at work or a windfall from a family member, you’re probably not complaining if you suddenly have an extra $100k. But while the extra wealth might be helpful to your financial situation, you likely still have a lot of questions and may be wondering how to invest $100k. There are lots of options, depending on what you value and your finances.

There are many ways to invest $100,000, from real estate to starting your own business. Keep reading to learn how to invest 100k and what you can do to help your money grow even more over time.

What to do with $100k: 4 Investment ideas

Tempting as it may be to spend your 100k on a lavish vacation or a new luxury car, the more practical idea is to put your money to work for you.

Investing your money can help it continue to grow over time, ultimately giving you even more wealth than before. This can be a big benefit in your lifetime, but it also helps build generational wealth for your descendants.

Let’s take a look at four investment ideas for your $100,000:

• Retirement accounts
• Real estate
• Brokerage accounts
• Savings accounts

1. How to invest $100k for retirement

Approximately 62% of Americans between the ages of 18 and 29 have a retirement account, according to The Motley Fool. However, they also state that only 30% of them feel prepared for retirement.

If you have a retirement account, adding 100k could be a big step in funding your retirement income. If you don’t already have a retirement account, your $100,000 is a great way to get started with a leg up toward retirement savings.

But adding money to your retirement account isn’t just about increasing your income in retirement — it’s also a good way to potentially save on taxes. Your windfall may come with a hefty tax bill, depending on how you got the money. By investing your 100k into retirement savings, you may be able to save on taxes.

For example, you exceeded all of your sales goals this year and earned a 100k bonus. You might be able to save on next year’s income taxes by maxing out your 401k. If you’re wondering, “Should I max out my 401k?” it reduces your taxable income, which in turn lowers your tax bill.

It’s important to note that you probably won’t be able to invest your full 100k into retirement savings alone.

Retirement accounts generally have contribution limits. Contributions to a 401k account are limited to $23,000 in 2024, according to the IRS, for example.

Contribution limits might mean you have to invest part of your 100k elsewhere, but investing in retirement is still a great place to start.

Common retirement accounts

There are three common types of retirement plans: 401k, individual retirement accounts, and defined benefit plans.

A 401k is an employer-sponsored plan that lets you contribute part of your paycheck directly to the plan. The plan is managed by your employer, which can limit your investment and management options and lead to higher fees than other types of accounts.

Individual retirement accounts (IRAs) are owned by individuals, meaning you have full control over your account. Your employer is not connected to your IRA, and you can choose almost any type of investment you like (depending on where you open your account). Fees on IRAs tend to be lower than other account types because you can choose low-fee or no-fee investments.

However, contribution limits are lower, which makes it difficult to quickly build wealth through contributions.

Finally, a defined benefit plan — most often called a pension — is an employer-sponsored plan that makes regular payments to retired employees.

The plan is owned by the employer, who uses their own formula to determine retirement payments. The formula generally takes into account the employee’s time with the company and salary.

Defined benefit plans are most often funded by the employer, but the rise in the popularity of the 401k means fewer companies are offering pensions than in the past.

2. Investing $100k in real estate

When it comes to investing 100k, real estate investing might be at the top of your list. One of the biggest barriers to entry to making money in real estate is the initial investment. Buying a house to rent out, for example, could take some serious upfront capital.

That’s why finding yourself with 100k could be a great time to start real estate investing. Real estate uses real property — from single-family homes to commercial buildings — to generate income, usually through rental or lease payments.

Depending on how you invest your money, passive real estate investing can even be a passive income stream that doesn’t require hands-on management. After all, who wants to get maintenance calls from tenants in the middle of the night?

Real estate investing for beginners, however, might be overwhelming. Luckily, you don’t have to go out and buy a four-plex building to start investing.

There are several ways to get started in real estate without buying a property on your own, including real estate investment trusts or REITs.

Direct real estate vs. REITs

Buying a house, apartment complex, or commercial building to rent for income is often referred to as direct real estate investing or investing in real property. There are a lot of upfront and recurring costs to this method.

For one, you’ll have to purchase the property and make any necessary repairs or renovations. Even after renting the property, you’ll need cash to cover maintenance, taxes, insurance, and other ongoing costs. And, of course, the property could potentially lose value over time.

The biggest benefit to direct investing, however, is the chance for higher payouts. By owning the building outright, you don’t have to share profits. You might also be able to make money quickly by flipping properties.

That being said, owning real property — even with a property management company — can be a big hassle. A real estate investment trust, which you may also know as a REIT, is a company that owns real property, like a hotel or office building, and provides a real estate investment option for people who don’t want to own their own properties outright.

REITs offer ownership shares of their portfolio of real estate to investors, much like a company stock. As an investor, you purchase shares in the REIT and receive dividends from the company’s profits. You can also sell your shares to make a profit if the price goes up, just like a stock.

Investing in REITs lets you get into real estate investing without the high startup cost. They also give you an easy way to diversify your investment portfolio.

However, you won’t have control of the properties the REIT company owns or the price of rent. The lack of direct involvement in REITs might make it feel more like stock investing than real estate investing.

3. How to invest $100k in a brokerage account

If you’re wondering what you should do with 100k, a brokerage account will likely be part of your investment plan.

A brokerage account is an investment account which lets you buy and sell stock market assets like stocks, bonds, and funds. Unlike retirement accounts, brokerage accounts have no contribution limits.

However, brokerage accounts also don’t typically have tax advantages like retirement accounts.

The good news is that investing in a brokerage account is one of the simplest ways to build wealth. Even better, the money you earn isn’t tied to retirement, so you can access your money without penalties at any age.

As you grow your investment portfolio, you’ll begin to earn portfolio income from dividends and interest.

In most cases, brokerage investing is a fairly hands-off method of investing. This is especially true if you hire a financial advisor or use a robo-advisor to automate your investment decisions.

Figuring out how to invest 100k in a brokerage account comes down to personal preference. You’ll want to consider your risk tolerance and how you want to make money (dividends vs. buying and selling shares) when choosing investments.

Typically, there are five types of investment vehicles in a brokerage account:

• Stocks
• Bonds
• Mutual funds
• Index funds
• Exchange-traded funds

Stocks

Stocks are pieces of ownership of a specific company. Each piece of ownership is called a share. You can buy and sell shares to make money, typically by buying at a low price and selling your shares at a higher one.

Investing in stocks may allow you to earn big profits, but you have to pick the right ones. A person who invested in Google, Apple, or Amazon when the stocks first became available likely made a large profit from selling the shares within the last few years.

However, there’s no proven way to pick a stock that will make it big. You might also choose a stock of a company that goes out of business, leaving your investment nearly worthless. This chance of loss is why stocks are considered the riskiest type of investment. But you can learn how to research stocks to improve your chances of success.

Bonds

A bond is a loan you make to an organization, often a government entity. The bond issuer, such as a city government, uses your bond purchase to raise capital.

In exchange, the organization agrees to pay you back with interest for a specific duration. You’ll receive a set interest payment, meaning you can calculate the rate of return on your investment.

The downside to bonds is the low rate of return. Many bonds offer low interest rates, which could limit your ability to grow significant wealth through bond investing.

On the other hand, bonds can be a low-risk investment option as many government-issued bonds are backed by the entity offering them.

Mutual funds

A mutual fund is basically a managed portfolio of bonds, stocks, and other assets. It can be a good way to diversify.

The benefit of mutual funds is the ability to invest in lots of different assets without having to individually pick each one. This also means mutual funds tend to be slightly lower risk than individual stocks because you’re spreading out the risk among many stocks.

The drawback of mutual funds is their fees, which tend to be higher compared to other investments like ETFs.

Additionally, you might only have access to certain mutual funds within a retirement account, like a 401k.

Index funds

Index funds are technically a sort of mutual fund, but they’re considered passively managed funds, states Forbes. This means an index fund isn’t being actively managed by a fund manager who picks specific assets.

Instead, index funds try to follow what a market index does, for instance, the S&P 500.  The fund holds stocks of companies within the chosen market index. When the market goes up, the index fund tends to rise in value.

Without a fund manager, index funds tend to have lower fees than their managed counterparts. While index funds tend to build wealth slowly, they tend to perform very well over a long time. This makes investing in index funds a great low-cost, low-management option if you’re deciding how to invest 100k for the long term.

ETFs

Exchange-traded funds, also called ETFs, are similar to mutual funds in that they’re a portfolio of assets sold as one unit. Like mutual funds, you can get access to multiple investments while buying and sharing shares of an individual ETF.

Additionally, ETFs tend to work like index funds specifically because they’re built to track certain market movements.

For example, you can choose ETFs related to certain industries.

While ETFs are built similarly to mutual funds, they trade more like stocks. Mutual funds have one price per day, whereas ETFs can be purchased and also sold throughout the day, and the price will fluctuate with the market. ETFs also usually have lower fees than mutual funds.

4. Savings accounts and other liquid investments

While you can make a lot of money investing in real estate or even the stock market, you could also potentially lose money.

Additionally, these assets may make it more difficult to access cash quickly, such as in an emergency.

The solution? Keep some of your money in highly liquid accounts such as checking, savings, or money market accounts. While stocks, bonds, and other investment options are considered liquid assets, having a protected cash fund can help you get the money you need quickly without the chance of it losing value.

These types of accounts are typically interest-bearing, so you’ll still make some money from your deposits.

In addition, keeping money in an FDIC-insured bank means you won’t lose money if something happens to the bank up to a certain amount.

The general recommendation for cash accounts is to keep around three to six months of living expenses for emergencies. This amount lets you have enough for unexpected expenses without losing potential returns by holding too much money in cash.

Expert tip: How 100k keeps earning money

Leverage the power of compound interest with your 100k! Wondering how does compound interest work? Compound interest is the money you earn from your already-earned interest.
This means you earn interest on the total amount in your account, not just your initial deposit.
So if you invest your 100k, over time, it will continue to provide interest indefinitely in some cases.

5 Factors to consider before deciding how to invest $100k

There are a few things you’ll want to do before choosing what to do with 100k. Taking the time before investing will help you choose the investments that make the most sense for your financial situation.

Before investing your money, here are five factors to consider:

• Make a plan for your money
• Pay off debt
• Build emergency savings
• Diversify your portfolio
• Know your tax situation

1. Make a plan before deciding what to do with $100k

Having $100,000 is a life-changing amount of money for many people. The possibilities of what you can do with your money may seem endless, but it’s worth taking a step back before investing.

Take the time to think about what you want to do with your money by asking yourself these questions:

• What do I hope to gain from my investment? Money? Assets like real estate?
• What is my risk tolerance?
• Do I know the tax implications of my investments? Do I owe taxes on the money I received?
• What are my long-term financial goals? Early retirement? Pay off my mortgage? Put my kids through college?
• Is there anything I want to spend part of my 100k on before investing it?

Without a solid investment plan in place, you run the risk of investing your money in a way that will lose money.

For example, you get excited about a new company and put all of your money into their stock. The company doesn’t perform as well as you hoped, and your investment value falls.

In addition, investing without a plan doesn’t always have catastrophic consequences. If you invest your money without a plan for it, you might simply end up with investments you don’t enjoy or don’t want to deal with.

Say you are buying a house to rent out, and you become a landlord. After a few years, you realize you’re not making much money from the property, and you don’t enjoy being a landlord.

This is why it’s essential to think about what you want to do with the money before jumping in to something without researching.

2. Deal with debt before investing $100,000

Debt can be an unfortunate part of life, and a lot of Americans have it.

A study by TransUnion found that the average credit card debt balance per consumer is around $5,733. That debt can quickly eat into returns on investments if not dealt with first.

By paying off debt — especially types of debt such as high-interest debt with credit cards — before investing your 100k, you can take your earnings from your investments as pure profits. If you leave your debt to keep growing, your overall investment earnings will be reduced by your debt plus interest.

For instance, suppose you have $10,000 in credit card debt and have $100,000 to invest. The credit card interest rate is 15% per year, and you expect to make 6% in gains from your investments.

If you don’t pay off your credit card debt, you’ll have $1,500 in additional interest added to your credit card balance. Your investments made $6,000 in interest.

$6,000 – $1,500 = $4,500 in profit

On the other hand, let’s say you pay off the $10,000 you owe and invest the remaining $90,000. You wouldn’t have any interest costs because you’ve paid off the credit cards.

However, you’ll make $5,400 in earnings from your investments.

By paying off your debt first, you’ve almost made an additional $1,000 from investing. Over time, these additional earnings will really add up.

3. Build emergency savings

Do you have a rainy day fund or emergency fund with at least three to six months of living expenses?

If not, filling your emergency fund should be your top priority when choosing how to invest 100k.

An emergency fund is a cash account you can use to easily access money in — you guessed it — an emergency.  Common financial emergencies where you might need cash include:

• Home repairs
• Car repairs
• Medical bills
• Divorce
• Losing your job
• Unexpected travel (such as to visit a dying family member)

To calculate how much emergency savings you need, you must first determine your monthly expenses.

Add up your monthly recurring expenses, such as mortgage or rent, car payment and insurance, average utility bills, cell phone bills, and average credit card bills. You’ll then take the total of your average monthly expenses and multiply it by how many months’ worth of savings you hope to have.

For example, your total monthly expenses average $4,000. You want to have between three and six months of savings, so you’ll need to put $12,000 to $24,000 into your emergency fund.

Generally, the best place for an emergency fund is a high-yield savings account. These give you easy access to your money, as you can usually tie them to a checking account at the same bank for instant transfers.

Additionally, by opting for a high-yield account, you’ll earn interest on your emergency savings, further growing your rainy-day fund.

4. Diversify your portfolio

Does the thought of losing even a small amount of money on the stock market give you the shivers? Or, do you have no problem losing some money with the hopes you’ll make more overall?

These situations refer to your risk tolerance or how much risk you’re willing to take on in your investments. Those with lower risk tolerance generally invest in lower-risk assets with the hope they won’t lose money and will make steady but smaller earnings.

Someone with a higher risk tolerance might be willing to invest in a riskier asset, such as an unproven stock, in the hopes that the returns will be higher than other investments.

Regardless of your individual risk tolerance, it’s recommended that you do what you can to lower your risks when investing. One of the easiest ways to lower investment risk is to diversify your portfolio.

Diversifying a portfolio means investing in a range of assets to offset the individual risk of any single asset.

For instance, if you only invest in newly-released stocks, you’re at a higher risk of losing your money if all of those companies go bankrupt.

On the other hand, you could invest some money in stocks, some in bonds, some in index funds, and some in ETFs across various industries. This widens your portfolio’s ability to bounce back after an individual company or market sector loses value.

5. Understand the tax implications

Depending on how you get your $100,000, you may have a hefty tax bill to look forward to. Some scenarios, such as receiving a life insurance benefit payout, are not typically taxed, explains the IRS.

In that case, you’ll have the full $100,000 to invest how you like.

However, if you get 100k from a bonus at work, severance payment, or other type of income, you can expect to owe taxes on the money.

For example, if you receive a $100,000 year-end bonus in the form of a check, you’ll be taxed 22% for federal taxes, or $22,000, according to CNBC Select. That leaves you with $78,000 to invest — a fair bit lower than the 100k you started with. You may also owe state taxes on your bonus in addition to federal taxes.

It’s always a good idea to talk with a tax expert when you come into a large sum of money. They’ll help you determine if you owe taxes and the amount and may be able to provide strategies to help reduce your tax bill.

You should also consider tax implications after you decide what to do with 100k. Depending on how you invest the money, you may have to pay taxes on the earnings.

Short-term gains vs. long-term gains

Capital gains is the term for the money you make on the sale of an investment. Let’s say you buy stocks for $100 and sell them for $200. You made $100 in capital gains on your investment.

These gains can be short-term or long-term, depending on how long you own the asset.

• Short-term gains: Profit made on assets held one year or less.
• Long-term gains: Profit made on assets held over one year.

When you sell an asset, you often have to pay capital gains taxes. This tax is higher for short-term capital gains and lower for long-term capital gains.

In many cases, you can save money on taxes in your investment accounts by keeping your assets for over a year.

Investing $100k over time

In most cases, it’s best to avoid investing all of your money at once. That’s because markets fluctuate over time. Even if you invest in a variety of assets, you could be investing at a high point in the market.

Instead, consider investing your money over time. You can keep the balance of your 100k in a high-interest savings account to help it make money while you slowly invest it.

An easy way to automatically invest over time is a strategy called dollar cost averaging. Dollar-cost averaging works by investing a portion of your money at regular intervals. This strategy reduces the risk of trying to “time the market,” which often doesn’t work for the majority of investors.

In addition, dollar cost averaging lets you purchase more shares when prices are less expensive and fewer shares when prices are more expensive, leading to a lower average cost per share.

Do I need a financial advisor to invest $100k?

If you’ve unexpectedly received $100,000, you may wonder, “Do I need a financial advisor?” – well it can be a good idea. Financial advisors can help you invest 100k, as they help their clients invest, save, and manage their finances.

In many cases, a financial advisor is like a personal finance coach who can help you better understand your financial situation. They can help you navigate your investment options and develop a financial plan that works for you.

On the other hand, financial advisors could be expensive, depending on their fee structures. They’re also not the professional you likely need if you have tax questions.

In that case, you should seek out a tax professional such as a CPA (Certified Public Accountant).

How should I invest $100,000 to make $1 million?

To invest 100k and make $1 million will take time and patience, and the ability to invest for the long-term. It’s unlikely to happen overnight without potentially devastating risks.

Long-term investing strategies, such as investing in index funds, are often the preferred way to increase the value of your portfolio without inviting a high level of risk.

How can I invest $100k to create passive income?

Investing 100k for passive income is possible if you consider businesses that run themselves or start investing. Passive income is a type of strategy that lets you earn money without actively working. You’ll continue to earn while you eat, sleep, or read the best side hustle books.

But most passive income streams require a lot of work to get started — or a lot of cash. Luckily, if you’ve found yourself with 100k, starting a passive income stream could be a quick way to make extra money.

1. Buy vending machines or ATMS

You can buy vending machines or ATMs and place them at various businesses or locations for a fee, like rent. When someone uses the machine, the money they spend (or ATM fees) is your revenue. You then regularly check the machines for money — and to restock products or cash — to collect your profits.

This stream isn’t perfectly passive since you’ll have to physically visit the machines for maintenance, restocking, and collecting profits.

However, you could hire someone to take care of the day-to-day operation of your business.

2. Purchase a laundromat

Owning a laundromat lets you earn money as long as people are using the machines. There are a lot more expenses in owning a laundromat than other types of passive income ideas, such as utilities and machine maintenance.

However, laundry services are an ongoing need for almost everyone, making a laundromat a relatively safe investment.

3. Flip domain names

Did you know you can buy and sell internet domain names, sort of like stocks? You might consider starting a side business doing this.

It works by buying a domain name you think someone will want for their business.

For example, the person who first purchased “apple.com” was likely able to sell it for a large profit when the technology company needed the domain.

Although many big-name domains are already bought and paid for, you can still make money flipping domains. There are even marketplaces where you can easily buy and sell domain names directly.

4. Rent out quality items

Say you decide to buy a luxury car with your 100k. You can still make money on your purchase by renting out your vehicle for a premium.

And this strategy works with any high-quality items you own. Are you into designer handbags? You could rent them out to people looking for a bag for an event. Other items to rent out include high-quality power tools or yard equipment, an RV, sporting goods, or quality baby equipment.

5. Buy a successful business

A common passive income idea is to simply purchase an already profitable business. You take over ownership and continue to let the business run as it has been to make money.

Unfortunately, it takes quite a bit of upfront capital to do this. Luckily, if you have 100k to invest, you could likely find an existing business within that budget or qualify for a business loan with a 100k down payment.

How much interest can you earn on $100k?

If you’re earning compound interest on your 100k investment, there’s almost no limit to how much interest you can earn on 100k.

However, how much you’ll actually earn in interest depends on a few factors, including where you invest the money and how often you withdraw funds.

For example, if you put your 100k in a typical savings account, your interest rate might only be about 0.5% per year, explains the FDIC. Even with compounding interest, you’re unlikely to make a large amount in interest earnings.

Creating a diversified portfolio of investments, however, could yield a much higher interest rate.

Articles related to investing $100k

If you enjoyed reading this article about how to invest 100k, check out these other articles about investing!

• Investing Money For Beginners: How To Start Investing Today!
• How To Turn 10K Into 100K
• How To Start: Passive Real Estate Investing
• How to Grow Your Money: 7 “Must Do” Tips
• How to save $100k: I did it in three years

Leverage these tips on how to invest 100k for your future!

Figuring out what you should do with 100k can be a daunting — and exciting! — task.

If you’ve found yourself with $100,000 to invest, your first step should be to make a plan for your money. You may want to talk with a tax professional and financial advisor to help create an investment plan that will help you maximize returns on your investments.

Remember to take your time deciding about your 100k, and be sure that the investments you choose are the best ones for you that will bring you financial success.

The post How To Invest $100K? 4 Investment Ideas appeared first on Clever Girl Finance.

There are two basic ways to make money. The first is the traditional way: getting out of bed in the morning and going to work at a full-time job. But the second way, using the best passive income ideas, is a lot more fun because it means you get to earn money while you’re sleeping, reading a book, in the middle of a lake on your kayak, or anywhere.

Once you’ve got them set up, the best passive income ideas require little to no active effort from you.

Most of these require a bit of startup capital, so your first step will be building up some savings through a saving game or budgeting. After that, get ready to learn how to make your money work for you!

Knowing how to create passive income opportunities with no money is a bit trickier and narrows your options.

However, there are still a variety of ways to make passive income and increase your cash flow.

Top 30 best passive income ideas

Without further ado, let’s dive into 30 of the best passive income streams! For further learning, be sure to check out our list of great passive income books, and also learn the key differences between active vs passive income.

1. Build a niche affiliate website

A great source of passive income is to build a website. The upfront work of this method includes finding a niche to write about, creating an attractive website, researching keywords that will drive traffic to you, and joining affiliate programs.

Once it’s set up, you’ll earn ongoing income from any affiliate sales your content generates.

You can make occasional updates to keep the site active and also update keywords. For websites like these, think small and specialized.

Review websites for a specific type of product that can be successful and easy to monetize, and research the types of blogs that make money. You can also make a YouTube channel or other social media accounts to create more content related to your website.

2. Create apps or software to sell

If you already have tech skills, think of a program that would improve people’s lives or be fun to use. Even simple apps can be successful.

For instance, look at the story of Flappy Bird: an extremely simple yet addictive game that went viral and at one point was earning its creator $50,000 a day from ad revenue.

The Flappy Bird story is an exception rather than a rule, but it demonstrates that you don’t have to build the fanciest, most complicated apps to earn a profit.

Once your app is available for sale, there’s little ongoing work besides making any necessary updates. There are lots of resources where you can learn how to build an app to make money.

3. Publish eBooks

Self-publishing books on Kindle is one popular way to monetize fiction or nonfiction writing. Actually, writing the book will require the most time and effort, but it’s also one of the best passive income ideas. You’ll also need to market your book in order to let readers know about it.

After that, you get to sit back and make sales! Even if you only charge a couple of dollars, it can add up as people continue buying copies for years into the future.

4. Own rental properties

Rental properties are one of the best passive income ideas, and one of my personal favorites for making money. But if you’re not up for the job of screening tenants and being a landlord, you can turn this into a passive income strategy by hiring property managers. Of course, property managers are an added expense, but it takes a lot of work off your hands.

Owning rental properties is not without risk.

For instance, the property could stay vacant for too long, or repairs might cost you a lot of money. Even so, with caution and due diligence, owning real estate can be very lucrative.

5. Buy bonds and/or Certificates of Deposit

Bonds and CDs (certificates of deposit) are two of the very low-risk best passive income streams. The tradeoff for this safety is usually fairly low returns and having your money committed for a certain amount of time.

There is usually a penalty if you need to withdraw early, so make sure you don’t need the cash soon.

So how do savings bonds work? With bonds, how much they pay mostly depends on how stable the bond issuer is. 

U.S. savings bonds are government-guaranteed and are very safe. Corporate bonds depend on a variety of factors to determine their risk factor and interest rate.

And what is a Certificate of Deposit? It allows you to place a specific sum of cash into an account and earn interest on it in a low-risk way.

It is sort of like a savings account, except you can’t remove your money until the term is done. But at that point, you’ll have extra money in addition to the original amount due to interest.

6. Sell stock photos

One of the easiest and best passive income streams to start is selling stock photos.

Although this isn’t a passive income idea that will usually make you rich, it is relatively easy.

Once you’ve done the work of taking photos and listing them on a stock photography site like Shutterstock, your photos can bring you a little cash on the side for years to come.

These days, most smartphone cameras are capable of producing high-quality images. So you don’t necessarily even need to upgrade your equipment (unless you’re already a hobbyist photographer and have a DSLR on hand!).

Think about the types of photos companies might want to use for websites, articles, etc. The subject matter might not always be the most exciting, but getting paid is exciting!

7. Own a vending machine or ATM

Vending machines and ATMs are some of the more unusual ideas that not as many people realize are possible. You find vending machines and ATMs everywhere but might not stop to consider who owns them! And it’s a great passive income resource.

When you buy or rent an ATM, you can place it in a location you are the owner of or negotiate to share profits with someone who has property in a more lucrative location.

You make a profit from ATM fees charged each time someone uses the machine. You’re responsible for keeping the machine stocked with cash, but you can turn this into a passive income source by outsourcing this work to a trusted third party.

A vending machine business is similar. You’ll want to place it somewhere with a decent amount of foot traffic, and you can outsource the restocking of snacks or drinks inside the machine. Inventory costs can be very low when you’re buying in bulk, so it’s a chance for a decent profit margin.

8. Flip domain names

Domain names are sort of like the real estate of the internet: everyone wants a good one, but there’s a limited supply. Most people want a .com domain that’s memorable and relatively short, so it’s easy for people to type.

If you’re a creative type with a little business acumen, a good passive income hustle could be buying domain names you think could be profitable and in demand and listing them for sale.

You can often do this relatively cheaply, but it’s not without risk since you could find yourself paying for a domain name that just won’t sell.

9. Sublease to roommates

If you currently own a house or apartment (or are in the market for one), doing a rent split with roommates can drastically increase your passive income.

For the cost of sharing a spare room, you’ll add hundreds of dollars to your monthly income. Splitting rent is a form of house hacking, which is essentially canceling out your mortgage payments with rental income.

If you don’t want a full-time roommate and live in a popular area, you can list a room on Airbnb open to shorter-term travelers. You’ll just need to do some cleaning between stays.

Renting your room on Airbnb is one of the most lucrative and best passive income ideas to try!

In fact, you may be able to earn more renting weekly rather than monthly.

10. Rent out your car or parking space

When you’re not using your car, why not let it make money for you? You can offer your vehicle for short-term rentals to travelers on a service like Turo.

Or, you can help someone out with their own side hustle journey by making your car available on HyreCar, where it can be connected with drivers for services like Uber, Lyft, DoorDash, and Instacart. Insurance is built into these services, making it less risky to have a stranger drive off with your car!

And if you live in a high-traffic area, like a city or beach town, you can even rent out your garage for parking. It’s a great idea if you have a space but not a car or are gone most of the day and only need the space in the evenings.

11. Install money-saving apps and get cashback for online shopping

Many of the best coupon websites and a lot of apps are available today where you can earn cashback, find coupons, etc. Most require some ongoing effort, so they’re not passive.

However, Dosh is an example of a totally passive cash-back app. Just link a card in the app, and if you spend money at an eligible store or restaurant, you’ll get your money back automatically.

In the same way, Paribus will work behind the scenes to check your email inbox for online shopping receipts and issue partial refunds if the price drops shortly after your purchase.

And if you tend to do a lot of your shopping online, get some motivation for saving money with a single click, thanks to online cash-back portals. Rakuten, formerly called Ebates, is the big one in this space.

Just install their cash-back button on your browser, and you’ll be notified when you’re on websites where cashback is available. It’s one of the best passive income ideas and requires almost no work.

12. Invest

Investors understand one of the most common ways to make passive income. Over the long term, the stock market has consistently generated steady returns, even if it has ups and downs in the short term. Learning how to start investing in assets that will make you more money is a great way to earn passive income.

Dividend stocks

There are a couple of ways to earn money from stocks. You could buy high dividend stocks for regular cash payouts based on company earnings. Or, hold onto ordinary low-dividend stocks and let them grow in value until you’re ready to sell at a profit.

Dividend-paying stocks can be a smart way to make extra money but keep in mind that dividends aren’t guaranteed. You should use this passive income idea in addition to others for more consistency.

Investing in stocks is one way to avoid having to make an active income by simply growing your money and expanding your portfolio.

REITs

It’s also possible to buy shares of REITs (real estate investment trusts) and earn a share of income from the real estate projects they hold. Learning about real estate investing for beginners is simple and a great way to make money.

Annuities

An annuity can give you the opportunity to make passive income. You can find an annuity to buy from an insurance company. It’s an investment that you pay into now in exchange for funds later.

Other investing opportunities

There are also mutual funds, exchange-traded funds (ETFs), and index fund investing that you can continually invest in, in order to get a large profit later. You can begin with any of these using Robo-advisors or an investment advisor.

13. Crowdfund real estate

As mentioned above, REITs are a simple way to start passive real estate investing and earn a share of income from real estate, but with those, you don’t get to choose specific properties to invest in. If that sounds interesting to you, the next level up is contributing to crowdfunded real estate.

Through programs like Fundrise and RealtyMogul, you can buy a stake in specific real estate projects from the comfort of your couch and earn a share of the income from them.

However, most platforms require a minimum investment of at least $1,000 and sometimes more.

14. Earn credit card rewards

Who doesn’t want to earn money just from doing their normal spending? A lot of credit cards offer sign-up bonuses and a certain percentage of cash back for various purchase categories.

It’s one of the best passive income streams to earn extra money or save up credit card points to use toward travel.

The one caution I have with this passive income method is that you have to be careful and disciplined with your spending.

I recommend treating it like a debit card, and don’t spend more than you have in your bank account. That way, you’ll be able to pay your balance in full each month instead of having to learn how to manage credit card debt.

15. Rent out your tools

Sure, renting out your tools may be one of the more unique passive income ideas, but it can be a great way to earn cash. When it comes to renting, you can look beyond your home and your garage and into your shed!

Offering community rentals of some bigger-ticket items, such as lawnmowers, power tools, etc., can be a great idea on multiple levels.

It allows everyone in your neighborhood to get things done efficiently without each shelling out thousands of dollars for individual sets of equipment that only get used once in a while.

You can try to organize something like this locally (as long as you trust your neighbors!) or try out a peer-to-peer rental app.

Beyond tools, you could list things like camping equipment, kayaks, furniture in college towns, etc. Just make sure to consider any legal implications if you rent something that could lead to injury.

Be sure to get your copy of the book, The Side Hustle Guide!

16. Housesit

Housesitting is another semi-passive income idea since housesitting isn’t all just literally sitting around. Depending on the arrangement, you might be living at the property while the owner is away, or it might just require you to stop by to get mail, water plants, feed a cat, etc.

The beauty of this is that if you have work you could get done online or one of the high paying remote jobs, you can do it at the same time while you house-sit—essentially making two income sources at once! You can also housesit as a way to travel for free.

Making a profile and getting verified on a website like TrustedHousesitters can help you start finding gigs around the world, especially if you have some references.

17. Lend money to peers

Just like you can get a lease or buy a car or get a mortgage and pay interest on it, you can be the lender who charges interest. If you have some liquid funds that you’re able to part with for a while, this is another way your money can make money.

There are a variety of P2P (peer-to-peer lending) websites where this can be done with contracts and personal verification methods to help make sure that borrowers and lenders are legitimate.

However, there’s still a risk that a borrower can default on a loan, so don’t put all your eggs in one basket here.

It’s also not usually a good idea to do this with people you know, as loaning money to family and friends can be complicated unless you’re prepared to consider it a gift. Plenty of relationships are ruined over borrowed money.

18. Keep your savings in a high-interest account

Different types of bank accounts, like high-yield savings accounts, are very secure places to keep your money.

However, the drawback is that you usually won’t earn significant amounts of passive interest income.

Sometimes you can get up to 5% on limited amounts at credit unions or other special accounts like Netspend.

Otherwise, you can usually expect to see 1-2% on regular online savings accounts. These rates are partially determined by the Federal Reserve’s target interest rate, so they can go up and down.

19. Buy a blog

Instead of starting a blog from scratch, you may be able to buy one that’s already earning income. Then, you can turn it into passive income by outsourcing the labor to writers and digital assistants.

Some active management and communication might be necessary, especially as you try to scale.

However, if you focus on putting out evergreen content with monetized affiliate marketing, this can turn into a very lucrative passive income idea.

You can also make money from ads, selling products, and even offering courses on your blog.

It can take a couple of years of hustling to start bringing in a significant amount of passive income each month. If the best passive income ideas were easy, everyone would do them!

But with enough determination and creativity, you can set your future self up for a life of kicking back while the money rolls in. Especially if you learn how to make money with a blog for beginners!

20. Sell a course

Did you know you can create your very own online course to sell? Whether you are a fantastic cake decorator, know exactly how to teach about decluttering your life, or know how to play an instrument, you can create and sell a course for it!

Selling courses is one of the best passive income ideas. Once you create your course, your earning potential is unlimited.

Course platforms to use

There are many platforms you can use to get started, but Udemy and Teachable are among the most popular.

You will have to invest some money for monthly fees depending on the type of plan you go with.

However, teachable has a free starter plan that you can try out and see how you like it first!

21. Start a vlog

Vlogging is another excellent way to make passive income.

However, this requires a bit more footwork than the others, but it also has the potential for a decent payout.

The average YouTuber makes over $60,000 a year! There are plenty of ways to monetize and make passive income from a vlog.

For instance, with advertising, affiliate links, sponsorships, and more.

You will continuously create content but can keep earning from videos that you have already made. And since the number of hours watched every day on YouTube is 1 billion, there’s a good chance you can earn from your vlog.

22. Sell printables

Who doesn’t love printables? Printables are those adorable print-outs you can download and use for just about anything.

You can create anything from health trackers to planners to sell. Design your digital products on sites such as Canva or PicMonkey.

Once you design your printables, you can either sell digital products on a platform like Etsy or on your very own website.

Printables are one of the easiest and best passive income streams that continuously earn you cash!

23. Rent out your designer items

Are you a fashionista with a designer collection of handbags and clothing? Then make some money by renting out those beautiful items! Rather than selling them once, you can rent them out and keep making money on them.

Plus, if you are still in love with that Chanel bag hanging in your closet and not ready to part ways with it, this is an excellent way to keep it while earning money with it.

Get started making extra money with sites such as Rent My Wardrobe! It’s one of the best passive income ideas that can help fund your savings account and fashion habit.

24. Sell custom products with print on demand

Thanks to print-on-demand platforms, you can set up your own store and not even have to carry inventory. Whether you want to sell coffee mugs, shirts, or notebooks, sites like Printify and Printful will help.

You create your design and upload it to any product you want to sell in your shop, and voila, you start earning money.

There are options to sync your print-on-demand products to sites such as Etsy, or also Shopify, Printify, or your own website store. You can earn hundreds or perhaps even thousands of dollars a month, so it’s one of the best passive income ideas to start.

25. Rent out storage space

Do you need extra cash and have some unused space in a basement or garage? You can rent this extra space out for other people to store their stuff.

Your unused space can even help pay your mortgage or at least some of it! Check out Neighbor.com to connect with people who need storage space.

26. License some music

Are you musically talented? If you spend hours creating new music, it doesn’t have to be just a hobby, it can actually make you money.

Licensing your music is one of the hobbies that make money. You allow other people to use your work in exchange for royalties or commission.

Epidemic Sound is an example of a widely popular platform that can help you license your music to others.

27. Advertise using your vehicle

You may be able to make money just by driving around town or to and from work. There are companies that allow you to place an advertisement on your car to make money.

Getting your car wrapped is a good way to make passive income because once it’s done, it doesn’t require much thought or upkeep.

However, it’s important to work with a reputable company because there are a lot of scams associated with car advertising.

28. Sleep studies or surveys

A sleep study gives a whole new meaning to making money in your sleep. You can sometimes get paid to take part in a medical sleep study.

During a study, a technician monitors the activity in your brain.

Each study may have requirements for those that participate. But it can be one of the best hacks to make money without much effort.

29. Open a laundromat

A laundromat is another passive income type of business. It does require money to get started, as you’ll likely need to purchase supplies and equipment, not to mention rent or buy a space.

Be sure to do your research on how best to buy a Laundromat whether it’s own your own or through broker. It’s also very important to throughly assess your Laundromat operating costs and profit margins.

However, laundromats operate on a mostly passive basis, without you needing to do too much as long as you outsource the work. So this is a great way to make an income long-term. It’s not uncommon for people to purchase an existing laundromat and take over it’s ownership.

​30. Try dropshipping

Dropshipping is a way to have an online store without having to keep any inventory. People order from your store, but then a third party sends them the product. It can be more passive if you hire someone for the day-to-day operations.

Starting a dropshipping business involves doing research, finding a supplier, creating a store, and more. But it can be worth the time and effort! You can make almost $40,000 a year on average, not bad for a passive income idea!

Expert tip: Give yourself time to build passive income

When choosing a passive income source, it’s important to understand that setting up this new income idea will take a bit of time. Depending on which of the many options you select, you could spend anywhere from a few hours to a few months getting things ready.

Before you get started, we recommend being sure you have the time or can make the time to devote to the passive income idea in the beginning, and then later you will have the benefit of spending less time on it while still making money!

Taxes and passive income

There are some things to keep in mind about taxes and passive income. You will still owe taxes on your passive income, the same as active income.

Although you may be able to find some ways to make passive income with lower taxes, such as tax-free municipal bonds or long-term capital gains, it’s important to still talk with your accountant for tax advice before creating a passive income source.

How can I make $1,000 a month in passive income?

Making $1,000 a month in passive income can be done by selling something such as a course, printables, or stock photos.

There are, of course, many other ideas how to make an extra $1,000 a month in passive income, though selling something is one of the easiest and potentially fastest ways.

Keep in mind that $1,000 a month is $250 a week so it’s a good idea to breakdown how much on average you’d need to sell a week to meet your monthly goal.

How to passively make $2,000 a month?

For you to passively make $2,000 a month or $500 a week, you can combine a couple of different passive income ideas.

For example, selling a created product (e.g. an ebook or online course) or an affiliate product and stock market investing. Or real estate rentals and stock market investing. Choose two high-earning ideas and do both to have the best chance of making a couple of thousand dollars consistently.

How to make $5,000 a month passively?

If you use a few different ideas, you improve your chances of making more money, and be sure to choose ideas that are likely to make a higher income over time.

To make $5,000 a month passively, you will likely need to combine two or even three passive income sources. Some ideas include starting a blog, affiliate marketing, investing in real estate, investing in the stock market etc.

You can also check out our article on high income skills you can develop that can help increase your passive income earnings.

Articles related to making passive income

If you enjoyed this read about passive income, you’ll love these articles!

• How To Start: Passive Real Estate Investing
• 17 Best Passive Income Books To Inspire You!
• Active Vs Passive Income And How They Work For You
• 19 Passive Income Ideas For Students

Make more money with this list of best passive income ideas!

There are so many ways to make passive income that are easy and lucrative. You can start with one and continue to add more so you can earn even more money.

Remember, some of these ideas require more work than others, so decide what is best for you and your schedule by creating a time management plan and go from there. Also, use better budgeting techniques to manage the money you earn!

The post 30 Best Passive Income Ideas appeared first on Clever Girl Finance.

Saving for college expenses can be difficult and takes a lot of time. Many choose to save through a 529 plan to make the process easier. But is a 529 plan worth it? And is it a good idea for you?

Most American parents aim to save just over $55,000 for their children’s college expenses, and 529 plans make up 30% of college savings accounts.

We’ll explain the basics of the 529 plan system as well as where to open an account, and the 529 withdrawal rules. We’ll also go over the pros and cons of 529 plans. Then you can make an educated decision about your child’s education savings.

What is a 529 plan?

A 529 plan is a type of education savings plan that helps families prepare for future education costs. Also called qualified tuition plans, 529 plans offer tax advantages and savings benefits for those saving for higher education expenses.

Money in the account is generally put into investment funds that could help build savings faster than a savings account alone.

Additionally, the earnings in the account can be withdrawn tax-free if they’re used for qualified education expenses. The potential for tax savings makes a 529 plan an attractive method for budgeting expenses for college students.

Who are 529 plans for?

Anyone can open a 529 plan. After opening an account, any money you put into it is meant to be used for education costs for the named beneficiary on the account.

Generally, parents and grandparents are the owners of the account, and their child or grandchild is the beneficiary.

However, a big benefit of 529 plans is the ability for anyone to contribute. This makes it easy for family and friends to add money to the account (which can be one of the best 18th birthday ideas) or they can also add money for holidays.

Where to open a 529 account

Most 529 plans are administered by states and their agencies. Every state and Washington, D.C., offer at least one form of a 529 savings plan. Some educational institutions also sponsor 529 plans of their own.

You can choose to open an account from any state, regardless of where you live.

However, residents who open a 529 plan sponsored by their state may receive tax advantages when contributing to accounts.

In addition, some states offer lower fees and administrative costs to in-state residents.

You should consider both in-state 529 plans and out-of-state plans when deciding where to open a 529 account. Be sure to weigh the potential tax savings from your resident state plan with attractive benefits from other states.

You can look up and compare your state’s plan with the College Savings Plans Network search and compare tool.

For example, if your state offers aggressive tax savings on state income tax by using your state’s 529 plan, it may make sense to use this plan.

If, however, your state doesn’t offer tax benefits through its plan, you may want to choose a state plan with better investment choices.

How to open a 529 education savings account

Opening a 529 plan is usually as simple as finding the state’s plan administration website and filling out a form.

Plans sold directly by their administering state are known as “direct-sold” plans, or you may also choose to work with a financial advisor through an “advisor-sold” plan. Advisor plans still work with state 529 programs, but you’ll generally leave the day-to-day management of the account to your financial advisor. Advisor plans also usually have standard investment planning fees.

What are the pros of a 529 plan?

Is a 529 plan worth it, and what are the important pros and cons of 529 plans? When choosing any type of savings or investment account, you’ll want to consider the benefits and disadvantages. Let’s take a look at the advantages of opening a 529 plan.

Potential for significant tax benefits

By far, the biggest benefit of a 529 plan is the potential for tax savings. Depending on your state, you might be able to save money on state taxes by contributing to your resident state’s plan.

Many states offer tax deductions or credits for contributing residents. Colorado, for example, lets residents filing single tax returns deduct up to $22,700 per beneficiary for the 2024 tax year, according to College Invest. It’s worth noting that there are no federal tax deductions and no credits for investing in a 529 plan.

However, you can still experience great tax savings even if you open a plan outside of your state. Funds you earn in a 529 plan grow tax-free, so you won’t have to pay taxes on the earnings in the account. This tax deferment helps your money grow faster, as you won’t have to pay taxes on investment earnings while the funds are in the account.

When it is time to withdraw money from the account, you might still get to take it out without paying taxes on it. You can withdraw money from a 529 plan for use toward a qualified education expense tax-free.

Generally, qualified education expenses include things like college or trade school tuition, textbooks, and required class supplies.

Flexible education savings

A 529 savings plan gives you flexibility in addition to tax benefits. Anybody can open a 529 account, regardless of income, and name a beneficiary to their account. You can even name yourself as the beneficiary to your account to start saving as soon as possible.

The beneficiary you originally choose isn’t set in stone, either. You can change the beneficiary on your account to better fit your financial plans.

For example, you open an account for your first child and then start wondering, “Should I have another baby?” You choose to have a second child, and your firstborn receives a large scholarship to college. You no longer need all of the money in the 529 account for their education expenses.

You can change the beneficiary on the account to your second child without penalty. Now, your second child has access to the funds in the account to cover education costs.

Easy to set up and maintain

I personally like the idea of this plan because you don’t have to do a lot to manage a 529 savings plan. Once you open the account, you can usually “set it and forget” if you want to, which is a big plus when considering, “Is a 529 plan worth it?”.

Most plans let you assign automatic contributions, such as a monthly transfer of money from your checking account into the 529 plan.

In addition, most 529 plans offer targeted investment options based on your child’s anticipated college years.

While targeted investment funds lower the number of investments you have access to in the account, they make it much easier to manage your 529 plan money. Targeted investment funds generally use your child’s age or estimated college entrance year to create a mix of investments that fit the timeline to create a risk profile for your needs.

As your child gets older, the plan automatically readjusts investments in the fund to better meet current needs.

For example, a newborn has approximately 18 years before they head to college. A target fund for this child might include riskier investments with the potential for higher earnings because any losses would have years to correct themselves.

High contribution limits

Contribution limits for 529 plans are very high.

Many of these limits are upwards of $200,000 or more, according to The College Investor, meaning most families won’t fear hitting the limit.

What are the cons of a 529 plan?

Although 529 plans have a lot of benefits, they also come with certain drawbacks. Get to know the downsides of a 529 plan to better understand if a 529 plan is worth it for your family.

Can only use funds for education without incurring penalties

A 529 plan can help you save up significant funds for your child’s education. However, the funds can only be used for certain educational expenses.

If you decide to use the funds in a 529 account for non-education costs, you’ll have to pay taxes on the earnings. Using 529 funds for non-education expenses negates the tax-free benefit of the account.

In addition, you’ll also pay a tax penalty for withdrawing the funds without using them for education expenses. This penalty could cut into the earnings you’ve made through investments.

Drawbacks to state tax benefits

Not all state 529 plans offer the same types of tax benefits. Most give residents who use their plans a tax deduction or credit for contributions.

If you live in a state without income tax, however, you won’t receive the benefits of someone in a state with income tax. Since those in non-income tax states often pay higher property or sales taxes, a state 529 plan may not be the best fit.

Additionally, you should consider your future plans before committing to a 529 plan.

Say you open a 529 plan in your current state to take advantage of the state tax benefits. Your career, however, takes you to a new state within a few years. If you change your 529 plan, this could affect your investments, fees, and taxes.

Limited individual investment control

Having a low-maintenance account can be a big benefit for some parents — and a major drawback for others. Most 529 plans have a limited number of set investment options for your funds.

If you’re a hands-on investor, this limit on your control over your investments could be frustrating.

Without self-directed fund options, you have to accept the investment choices of the plan.

Instead of a 529 plan, you may want to consider opening custodial accounts or a brokerage account to use the money for education expenses. You may not get the tax benefits of a 529 plan, but having control of individual investments could lead to potentially higher returns.

Potentially high fees

Almost every 529 plan has administrative and investment fees. These fees help cover the cost for the state agency or institution to run and manage the plan. Choosing an advisor-directed plan also generally increases the amount you’ll pay in fees.

As you’re comparing your state plan to other plans, be sure to carefully consider the costs of the plan. Plans explain their fee structures and the fees you’ll pay for certain investment types in the fine print of their offerings. Going over the potential fees of a plan will help you determine if a 529 plan is right for you.

Expert tip

A 529 plan is a great way to save for future education costs for many families. This is because it offers flexible education savings with nearly no contribution limits, all while offering a done-for-you approach to investing.

That said, I recommend doing your research specifically around the tax benefits for different state plans a well as the associated fees. This will help you make an informed investment decision for your 529 account.

Is it possible to lose money in a 529 plan?

Yes, you can lose money in a 529 plan. When you learn how to start investing, there’s always a possibility you’re putting your money at risk.

529 plans are often called savings accounts, but they are almost always used for investing money in the stock market. Investments in a 529 fund could potentially lose money, just like any other investment. This might leave you wondering: is a 529 plan worth it if you could lose money?

The good news is that many 529 plans use a low risk tolerance to determine their fund allocations. Low risk tolerance means your plan puts your money into funds that have historically lower chances of losing money, though the potential is still there.

What happens to 529 if the child doesn’t go to college?

If your child doesn’t go to college, you can use the money for other education costs. Many parents mistakenly assume they’ll have to pay penalties on withdrawals if their child chooses not to attend college, but 529 funds aren’t only for traditional four-year university costs.

Other ways you can avoid paying taxes and penalties on 529 withdrawals if your child doesn’t go to college include:

• Switch the beneficiary to another family member who is attending college or another higher education program.
• Use funds for trade school tuition or a two-year program.
• Cover the cost of K-12 private school tuition.
• Use up to $10,000 to pay off student loans.

How do I withdraw my money from my 529 without penalty?

You can withdraw money without penalties by using it for qualified expenses. Any money you withdraw from a 529 account to use toward qualified education expenses for the beneficiary is generally tax and penalty-free.

Most people know that college tuition is a qualified expense, but qualified expenses might also include:

• Tuition and fees for both college and vocational or trade schools.
• Up to $10,000 per student in tuition and fees and elementary and secondary schools.
• Up to $10,000 toward student loan debt.
• Room and board, including off-campus housing up to on-campus housing costs.
• Food and meal plans.
• Textbooks and required class supplies.
• Computers, so long as they are a requirement for students.

There are many different ways to use funds from a 529 in a qualified withdrawal.

It’s important, however, to be careful when you withdraw funds to not overdraw and to know the 529 withdrawal rules. The money you withdraw from the account must go directly to the cost of higher education. Waiting too long to pay a bill or holding funds for a future expense could lead to paying penalties.

For example, say your child’s yearly tuition is $10,000, which the university bills per semester in $5,000 increments. You would want to avoid withdrawing the full $10,000 at the beginning of the year to pay the tuition bill to avoid paying a penalty on the $5,000 in funds for the second semester tuition bill.

Instead, you should withdraw $5,000 when the first bill comes in and the additional $5,000 when the second bill arrives.

How many times a year can you withdraw money from a 529 plan?

There is no limit to how many times a year you can withdraw money. While you should be careful when you withdraw funds from your 529 account, the good news is you can make unlimited qualified withdrawals from the account. Making more withdrawals throughout the year might also make it easier to keep track of which withdrawal was going to certain expenses.

What amount of time does money have to be in a 529 before you can take it out?

There are generally no restrictions on how long your money has to be in a 529 account before you can withdraw it.

Some states and individual plans, however, may have requirements on how long the account must be open before making a withdrawal. Be sure to check with your plan and the 529 withdrawal rules to see how long the account must be active before removing funds to avoid fees.

Education savings account vs 529: Is a 529 better than a savings account?

A 529 and an education savings account are comparable, but one isn’t better than the other.

State 529 plans aren’t the only savings account for college expenses.

The most common alternative to a 529 plan is a Coverdell Education Savings Account (ESA). Like 529 plans, ESAs help parents save for college expenses for their children.

An ESA is very similar to a 529 plan. Both accounts let you save and invest funds for the college expenses of the beneficiary — which both types of accounts let you change. And just like 529 plans, ESA accounts let you withdraw earnings for the account tax-free if the money goes to qualified education expenses.

Differences between an education savings account and a 529b

However, there are three main differences between an education savings account vs 529 plan:

• ESAs give you more control over your investments, letting you invest in mutual funds, stocks, and bonds.
• Unlike 529 plans, ESAs have annual contribution limits as well as upper-income limits.
• 529 plans don’t have age restrictions for beneficiaries, while money in an ESA must be used or the beneficiary changed to a younger family member by the time the first beneficiary turns 30.

Either a 529 or a savings account could work for you. In general, an ESA has more restrictions regarding contributions and timeline for use.

This might make it seem like a 529 plan is the best option, but that’s not always the case. The ability to mostly self-direct your investments in an ESA could make it the better choice for some parents.

Other alternatives for college savings

Other alternatives include custodial accounts for your children. In a custodial account, you are the owner of the account for the benefit of your child until they turn 18 (or 21 in certain states). After they come of age, the account moves into your child’s full possession.

Wondering if a 529 plan is worth it? Both ESAs and custodial accounts could be a good alternative if you feel a 529 plan isn’t for you, such as if you move states often or want to have more control over your investments.

Articles related to 529s and other other savings accounts

If you enjoyed learning about whether a 529 plan is worth it, you’ll like these articles:

• An Overview Of Custodial Accounts And How They Work
• How To Create A College Student Budget You’ll Actually Use
• 10 Financial Tips For When You Start A Family
• How To Create An Aggressive Savings Plan (And Why Consider It)

Is a 529 plan worth it for education planning?

Generally, we at Clever Girl Finance believe a 529 plan is an excellent way to save for future education costs. Many families find the ease of opening and maintaining their accounts — along with the tax savings — to be worth it to save for college.

If you’re considering opening a 529 account for your child or grandchild, we recommend considering these questions to help you decide if it’s worth it:

• Do you have other education savings in place?
• Do you have a backup plan for the funds if the child doesn’t go to college or doesn’t need the funds, such as securing a scholarship?
• Will you need the funds for other types of expenses outside of education costs?

After considering these questions, you should have a clearer view of whether or not a 529 plan is worth it for your family.

Whatever you decide, it’s always a good idea to plan ahead for your child’s future by saving for education, regardless of the type of account you choose. It is also equally important to consider your retirement savings and other investing goals, so you can create a healthy money story for yourself and your family.

The post Is A 529 Plan Worth It? appeared first on Clever Girl Finance.

Did you know you can only contribute a certain amount to a 401k per year? The biggest benefit of maxing out your 401k is the chance to save more money for retirement. If you are already making some contributions, you might start to wonder: should I max out my 401k? Well, keep reading.

The 2024 limit for a 401k is $23,000 for people under 50, according to the IRS, and contributing the full amount is known as “maxing out” your 401k, which might be a good choice for you. But how do you know for sure?

As with most things, the answer depends. Those who are financially stable, have good monthly cash flow, and have access to a 401k with low fees might want to consider maxing their account.

However, locking money up in a 401k generally means you can’t access your savings (without penalties) until you’re near retirement age.

Knowing the pros and cons of maxing out your 401k can help you make an informed decision on whether or not it’s time to up your 401k contributions. Let’s dive in and look at why you would — or wouldn’t — want to max out a 401k.

Should I max out my 401k? 4 Reasons you should

A 401k is one of the most common types of employer-sponsored retirement plans.

Deciding to max out a 401k is a personal decision, but there are reasons you might want to consider it. Maxing out your 401k could be a smart financial choice if:

• Your plan has low fees and plenty of investment options
• You’re looking to lower your taxable income for the year
• You want to get rid of the temptation of using retirement savings early

Let’s take a closer look at why you might want to max out your 401k.

1. Your 401k plan has low fees and great investment options

Your 401k probably has a handful of fees attached to it. In general, 401k fees consist of administration fees and investment fees.

The plan’s service provider charges administration fees to help cover the cost of hosting and managing the plan itself. This might include expenses like record keeping, accounting, and legal services. Investment fees, on the other hand, cover the cost of managing investments and investment-related services.

If you happen to be on a 401k plan with low plan fees, you might want to take advantage of it. With lower fees, you’ll get more out of your money by investing in the plan.

In turn, the more you invest in the plan, the more money you can build for retirement.

For example, you’re trying to decide whether you should max out your 401k or put that money into an individual retirement account (IRA) and other brokerage account. The fees on your 401k average out to 1% of your total balance per year, but the fees for the other accounts are around 3% per year.

In this case, it makes more sense to put your money in the account with lower fees.

2. You can lower your taxable income

One of the biggest benefits of a traditional 401k is the ability to lower your taxable income for the year. When you contribute to a traditional 401k, the money is generally taken from your paycheck and automatically added to your 401k account.

This process happens before your employer calculates taxes on your earnings. Thus, you don’t pay taxes on your traditional contributions.

When tax time rolls around, your year-end earnings statement doesn’t show those contributions as part of your taxable income. The lower your taxable income, the more likely you’ll lower your tax liability.

Let’s say you make $100,000 per year and usually pay taxes on the full amount. Maxing out your 401k would reduce about 20% of your annual taxable income, which could help lower how much you owe in taxes.

If you’re looking for an easy way to significantly reduce your taxable income, maxing out your 401k could be a great tax strategy.

Be sure to talk with your tax advisor about your specific situation to make sure maxing out your 401k for tax benefits makes the most sense for your financial situation, as well as to understand the difference between a Roth vs traditional 401k.

3. You can lock in your retirement savings

Except in certain situations, you can’t withdraw money from your 401k without a penalty fine before age 59 ½. When you contribute money to your 401k, you’re essentially locking it up in the account until you retire.

Making it harder to access your money, however, can be a big benefit if you’re still learning how to build discipline with finances. The money in your 401k can grow without giving you the temptation to withdraw funds early. Maxing out your 401k further helps you build these hard-to-access retirement savings.

4. You’ll be able to take advantage of any 401k match

Employer 401k matching is a contribution to your retirement plan made by your employer. A 401k match means your employer will put money into your retirement account based on what you’re contributing on your own. Usually, a 401k is a percentage match up to a certain percentage of your salary and it is essentially free money!

For instance, your employer might offer a 50% 401k contribution match up to 5% of your annual income. If you make $100,000 and contribute $5,000 to your 401k, your employer will contribute an additional $2,500. If you only contribute 4%, or $4,000, to your 401k, your employer would only match $2,000.

Keep in mind that, maximizing your employer match isn’t the same as maxing out your 401k. Maximizing employer contributions means contributing the full percentage of your employer’s match offer.

For example, if your employer offers to match up to 6% of your salary, you could maximize this benefit by contributing the full 6%.

Expert tip

When you’re wondering, “Should I max out my 401k?” this means contributing the full amount allowed by the IRS. Maxing out a 401k might not be financially feasible for everyone, but you can still reap the benefits by taking advantage of your employer match if you have access to one.

After all, you’re essentially getting free, tax-deferred money. Even if you can’t afford to fully max your 401k to the IRS limits, setting a goal to get the full amount of your employer match is a smart financial move.

Questions to help you determine if you should max out your 401k

Maxing out your 401k can be one of the smart tips for retirement planning. The more you save over the years, the more financial freedom you give yourself in retirement.

In addition, having a larger balance in your 401k makes it easier to build wealth through things like interest earnings.

On the other hand, contributing over $20,000 of your annual salary to a retirement account might not be possible. Asking yourself key questions can help you make an informed choice on whether it’s a good idea to max out your 401k. Some questions include:

• Do you make enough money to contribute the full amount?
• Have you paid off high-interest or high-risk debt, such as credit cards or personal loans?
• Do you have significant non-retirement savings, such as an emergency fund?
• Does your 401k have reasonable investment fees?
• Does your 401k plan have multiple investment options for your level of risk and estimated retirement year?
• Are you looking for ways to lower your taxable income this year?
• Do you not trust your financial discipline and want to put your retirement savings where they’re not easily accessed?

If you answer “yes” to most or all of these questions, maxing out your 401k could be a good retirement planning strategy for you.

On the other hand, if you answer “no” to most of the questions, you may want to focus on other financial tasks first, such as getting out of high-interest debt or building an emergency fund.

Note: Even if you cannot max out your retirement savings, you can still contribute to it. For example, based on your answers to the questions, you may determine you can only contribute 5% or 10% right now and that’s ok!

What to do before maxing out your 401k

There are a few things to consider before maxing out your 401k. By checking off the items in this list first, you’ll set yourself up for financial success when you max out your retirement plan.

Pay off high-interest or high-risk debt

Carrying debt and trying to max out your 401k account can quickly throw off your long-term financial goal setting. By trying to both max your retirement savings and pay the minimum on your debt, you’re splitting your finances. This can lead to not being able to pay off more than the minimum on your debt.

If you have debt with high interest, such as credit card debt, you might not be able to keep up with your debt payments or reduce credit card debt. When you can’t pay off more than the minimum on your debt, the interest charges keep adding up. You might have to carry that debt — and interest — into retirement, negating the benefit of maxing out your 401k over the years.

Focusing instead on paying off debt before retiring lets you take care of one of the biggest drains on your finances, your debt. And once you’re out of debt, you’ll have more disposable money to put toward your 401k contributions.

For example, you might decide to contribute just enough to your 401k to get your employer’s match while you focus on paying off debt. If no match exists, you might instead decide to contribute 1% to 5% to take advantage of some tax deferred savings while you focus on your debt repayment.

Build an emergency fund

Having access to emergency cash is one of the most important financial tools you can give yourself. Emergency funds are liquid cash accounts that give you fast access to your money when you need it most.

For example, your car breaks down, and you need several thousand dollars in repairs. Or, you suddenly lose your job and need to cover rent, utilities, and other necessary expenses until you find another job.

Ideally, you’d carry around 3 to 6 months’ worth of living expenses in your emergency fund before putting too much money into other savings, including trying to max out your 401k. You can — and should! —still try to contribute to your retirement fund, but the bulk of your savings should first go toward emergency savings.

You may also want to build some non-retirement savings before maxing out a 401k. As the money in a 401k is basically inaccessible without a penalty, having funds in a non-retirement account can help you cover large purchases or expenses until retirement.

Additionally, non-retirement savings, such as a high-yield savings account or brokerage account, gives you the flexibility to access cash both before and in retirement.

Consider your cash flow

Cash flow is how much money moves into and out of your bank account each month. The goal is to have a positive cash flow — meaning more money is coming into your account than going out.

When it comes to retirement planning, cash flow plays an important role in how much you can save. Even two people with the same income could have vastly different cash flows based on their monthly expenses.

For instance, say two women both make $5,000 per month.

The first woman has only $3,000 in expenses, leaving her with $2,000 to put towards savings and retirement. The second woman needs $4,500 to cover her monthly expenses and has $500 to put toward savings.

The first woman has a larger cash flow and will likely find it easier to max out a 401k than the second.

Should I max out my 401k based on my income and cash flow?

Your income and cash flow can be good indicators of whether it’s a good idea to max out your 401k.

Let’s say one woman has an annual income of $40,000. She isn’t carrying debt and keeps her expenses low at around $15,000 per year.

However, maxing out her 401k would require her to contribute over half of her salary to her retirement account. Even living on a bare bones budget, it would be difficult for this woman to put around $20,000 into a single retirement account.

A different woman, however, makes a six-figure salary of $150,000 and spends $100,000 per year on expenses. After maxing out her 401k and paying expenses, this woman still has around $30,000 to put toward other savings.

While the second woman has significantly more expenses than the first, her income and cash flow make maxing out her 401k possible.

Like the women in the example above, you can use your income and cash flow to decide if you should max out your 401k. The lower your income, the less likely it’ll be in your budget to max out your 401k (but you can still contribute something to it).

If you have a higher income, you’ll also need to consider your monthly expenses to determine if you have enough cash to max out your retirement plan. To do this, you can list your monthly income and expenses to see how much money you have to put into savings each month.

Ideally, you’ll have enough money left over to invest both in non-retirement accounts and your 401k rather than just investing all of it to max out your 401k.

What is the downside of maxing out a 401k?

There are a few downsides to maxing out your 401k, such as:

• Tying up your cash savings
• Potentially high plan fees
• Loss of match funds if you start wondering, “Should I quit my job?” and then you decide to do so

Less access to cash

The most obvious downside to maxing out your 401k is losing easy access to your money. Money in retirement savings is often non-liquid, meaning you can’t withdraw it with ease.

In addition, you may have to pay penalties on the money you take out.

Unless you have ample non-retirement savings, maxing out your 401k could lead to cash flow issues. These issues could be minor, such as not being able to save money as quickly as you wanted for a down payment on a new car. Or these cash flow issues could put you in a serious situation, such as not having the money to pay your mortgage or rent.

Potential for high fees

Not all 401k plans are created equal, and some plans have high fees that can eat into your savings. If your plan has a large administrative fee or charges fees on many different aspects of your investments, such as placing an investment order, you may want to focus on other retirement saving accounts.

Additionally, your 401k plan is overall managed by your employer and the plan administrator, giving you less control over your investment and savings. You’ll generally get more investment options, lower fees, and more control over your money with other types of accounts, such as an IRA or other self-directed account.

Could lose match benefits if not vested

Employer contributions to your 401k don’t automatically belong to you.

Generally, employees must stay at the company for a certain amount of time before vesting in their accounts. In retirement terms, “vesting” refers to the ownership of the money in the account.

Any money you contribute to your account on your own is always 100% vested from the start, meaning you own this money.

However, your employer match funds may not be yours — at least not at first.

Most 401k plans have a vesting schedule. The longer you stay at the company, the more of this money you own or become vested in. If you quit your job before being fully vested, you’ll forfeit any unvested money.

Say you vest 20% each year you’re with a company. Your vesting schedule would look like this:

• 1 Year: 20%
• 2 Years: 40%
• 3 Years: 60%
• 4 Years: 80%
• 5 Years: 100%

After five years of service, you’re fully vested. If you leave the company, you’ll take all of your employer contributions with you.

However, if you quit after only three years, you’ll only own 60% of employer contributions to your account.

As you consider whether or not to max out your 401k or employer match, think about whether you plan to stay with the company. If you plan to leave before being vested in your account, you may want to focus on other ways to build retirement savings.

At what age should I start maxing out my 401k?

Your age is only one small factor in when to start maxing out your 401k. Your income and expenses, current savings, and debt play a much larger role in whether maxing out your 401k is a good idea.

For example, one person makes $100,000 annually but has no debt and over a year’s worth of non-retirement savings. Their coworker makes $200,000 but spends over half of their income on high-interest debt payments and has no emergency fund.

Despite making less money, the first person may be in a better position to max out their 401k. Their ages may not play much of a role in the decision.

The exception to this is employees over age 50. At age 50, the IRS lets you make “catch-up” contributions to retirement accounts. If it works for your financial situation, maxing out your 401k with the general limit and catch-up contribution limit could boost your retirement savings significantly just before you retire.

Articles related to 401k accounts and retirement savings

If you learned a lot from this post, check out these related articles!

• What is the Difference Between A 401k And IRA?
• 401k Withdrawals For Home Purchase: Good Or Bad Idea?
• Roth vs traditional 401k: Is The Roth Better?
• Here’s What To Do With Your Old 401k

Decide if you should max out your 401k to increase your retirement savings!

Now you know the answer to, “Should I max out my 401k?” Saving for retirement is a great step to securing your financial future.

Before maxing out your 401k, however, it’s a good idea to consider your current financial obligations. You may want to start with financial wellness tips like creating a debt reduction strategy and building emergency savings, then you can plan to save for retirement and max out your 401k.

The post Should I Max Out My 401k? 3 Reasons Why You Should appeared first on Clever Girl Finance.

Sometimes, life happens, and you need ideas for how to make $300 fast. You’re not alone, we’ve all been in a pinch before. We’re also here to tell you there are ways to make the amount of money you need now. So, let’s dive in!

What can $300 buy?

More than half of Americans cannot cover an unexpected $1,000 bill. This means people struggle when cars break, appliances stop working, or someone gets sick.

In addition, the record-high inflation and rising cost of necessities aren’t helping matters.

So, a lot of people are in situations where they need to brush up on their money making skills fast.

During a time like this, I personally think $300 can come in handy. For example, I’ve found that amount can be just enough to pay a bill or an insurance co-pay, buy groceries, or fix a minor home issue.

How to make 300 dollars fast

The best way for how to get money fast is to either sell something or earn it. So, here are our best ways for how to get $300 fast.

Find the best task you can do using high-income skills, and figure out how much you can get paid for it. Then, estimate how many times you need to do the task to earn $300.

1. Ask or volunteer to work overtime

It may seem obvious, but we’ll add it to this “how to make $300 fast” list anyway. If your job offers the opportunity for working overtime or picking up extra shifts, then you’re in a great position to make extra money quickly.

The good thing about volunteering for overtime is you probably won’t incur additional costs. Because you’d already be at work, you just need to extend your hours. Also, you won’t need training for a job you already do.

2. Sell handmade or household items

Honestly, we’re all living with too much stuff, myself included. So, if I want to know how to get $300 fast, I figure I should sell things I’m not using. To get started, I can look around my house, room by room, to see what household items to sell for quick cash.

People are always looking for deals on basic items like books, furniture, electronics, jewelry, or clothing.

In addition, unique vintage items can fetch good money too.

Once you’ve decided on items you want to sell, make sure they’re clean and presentable. Take quality pictures to sell them online.

You can post items on Facebook Marketplace or clothing for sale on Poshmark. Amazon is also a good place to sell items. Or you can simply set up a garage sale outside your home, and people can purchase items that way.

On the other hand, you can sell handmade items if you like creating money making crafts. You can sell anything from crocheted blankets to paintings, house decor, cards, and jewelry on the website Etsy or also eBay.

3. Drive for Uber or Lyft

If you live in a tourist town or a busy city, you can add driving for Uber to your “how to make $300 fast” list.

Depending on your location and your availability, these ride-sharing apps offer great opportunities to earn cash. Plus, you can get started quickly and potentially have money tomorrow or by the end of the week.

Some drivers report making an average of $19 an hour, which is more than minimum wage. It also means you can make $300 for putting in 16 hours of work.

4. Deliver for food apps

If you’re not into driving people around, delivering for food apps is also a great way to earn extra income. With companies like Instacart, you get paid to deliver food, groceries, or other items.

Similar to ride-sharing apps, you can set your own hours and take the jobs that work for you. It’s included on this list of how to get $300 fast because it’s a great way to make extra bucks at night, on your breaks, or on the weekends.

5. Clean houses

Cleaning houses can also be a lucrative way of making extra money. It requires hard work, but you’re typically paid upfront and in cash. And cleaning houses is one of the unique side hustles you can start.

To get started, advertise your services online, in community centers, or in libraries.

6. Run errands

Use your mobile phone to make extra dollars and sign up with TaskRabbit. It’s an app where you can earn money for running errands for other people.

Simply find available tasks on the app, complete them, and get paid. You’ll see tasks like grocery shopping for the elderly, picking up dry cleaning, and accompanying a patient to and from surgery.

We added this option to this list of how to make $300 fast because the tasks that you can get paid for while helping people manage their daily routine schedule are endless.

7. Dog walking/Pet sitting

If you’re good with animals or love spending time with furry friends, dog walking or pet sitting are fun ways for you to make extra moolah. Pet sitters make around $14 an hour or possibly more.

You can make money doing something you love.

And you can pick up jobs whenever you want to, but not commit long-term. Awesome, right? That’s why it’s one of our recommended ways for how to get $300 fast.

My idea to start something like this is to post flyers around your neighborhood, offer your services to pet owners directly by asking neighbors and friends, or sign up to be a dog walker on Rover.

8. Do lawn care

You can make extra money doing things you like or using the skills and equipment you already have. Offer lawn mowing or landscaping services if you enjoy gardening and working outside.

You could also plant, weed garden beds or rake leaves in the yard. If you know what you’re doing, you could offer more services like fertilizing, watering, or aerating.

Depending on the lot size, you can charge $30 – $85 to cut grass. It’s definitely one of the best ideas to make $300 fast.

9. Look for housesitting opportunities

Housesitting may not be on the top of the list on how to make $300 a day, but it’s still a good way to earn extra money. Check out Housesitter.com to get an idea of what you’d be doing.

They match housesitters with homeowners needing the service. You’ll go through a background check, and then you set the dates you’re available and even the rates.

10. Paint houses

Do you notice details and have brush skills? Great! You can use those to make money painting houses.

Some people may not want to contact a big company to paint their house. You may also come across homeowners who’d started painting and lost interest. And that’s where you come in.

Post your services on social media or tell friends and family members to spread the word. You never know who’s looking for help and may want to hire you for your services. Get your copy of The Side Hustle Guide from Clever Girl Finance to help you learn how to start a small business.

11. Babysitting/childcare

You can offer babysitting services when parents want to have an occasional date night or when they get stuck at work. Advertise your services on your social media or sign up for childcare opportunities on Care.com.

There is a huge need for childcare providers right now. So, try this idea to make 300 dollars fast and also help parents out.

12. Rent out your car

Save up extra money by renting out your car on Turo. Turo allows private car owners to rent their cars to others via their online marketplace.

It’s an easy way to make $300 fast or cover your monthly car payments! All you have to do is sign up for Turo, list your car, and determine your price.

Renting my car is my favorite way to make passive income, as it doesn’t require much effort from me, but I make money!

13. Rent out your house

Do you have any extra space in your home or a spare room? List it on Airbnb and make extra income.

If you don’t mind having people stay in your home, you could bring in hundreds of extra dollars each month. When considering how to make $300 fast, it’s one of the easiest ways.

Take good pictures of the space and provide useful information about your neighborhood. Most people coming to stay won’t know much about your area, so talk about how they can get around and what they can do.

On the app, you can choose dates for when you want to have guests. It also doesn’t cost much to get started. But remember to include fees in your pricing.

Buying a house to rent out, or renting the home you live in, is not only a great way to make money but can help you get started with real estate investments as you learn more about rentals and how to earn an income from them.

14. Flip furniture

In need of more ideas for how to get $300 fast? If you like working with your hands, flipping furniture is also a profitable option to earn a paycheck.

Make sure to start small and have a budget in mind. Also, don’t attempt a huge redesign on your first flip.

Look for quality items for sale in your neighborhood that you can work on and sell for more. A few places to start looking for the right piece include Facebook Marketplace and Craigslist. You can also look at yard sales and thrift stores.

15. Try out several survey sites

While online surveys may not make a lot of money on their own, you can earn a few hundred bucks with some dedication and time. Sign up for several of the highest-paying survey sites like Survey Junkie, Swagbucks, and also InboxDollars to start getting access to surveys.

You can give your opinion, but many times you can also watch videos or even play games to earn a reward.

Complete as many as you can as quickly as you can from the highest paying survey sites, and watch the cash add up! You may also be able to earn in other ways by getting access to free gift cards or earning a bonus for asking friends to sign up.

How to make 300 dollars a day

For these ideas on how to make $300 a day, you would need more preparation and planning. You might need to learn new money making skills, and it may take months to implement them. But you can definitely make that money in one day with time, effort, and commitment.

16. Freelance writing

I can tell you that freelance writing gigs are not always easy. When I began with freelancing, I needed to learn the type of writing that sells before I could offer my services.

If you already have the skills and want to get paid as a freelance writer, tap into your personal and professional networks to find work. You can also sign up on Upwork to find freelance writing jobs, then get paid using PayPal or another payment method.

The Bureau of Labor Statistics explains the median pay for freelance writers is $69,510 a year, or about $33.42 per hour. You can also make your own schedule, and you can make a lot of money this way if you get positive reviews from your clients.

17. Become a virtual assistant

Do you have a talent for planning and organizing? You may be a good fit for a virtual assistant.

Virtual assistants typically work for online business owners who need help organizing schedules, setting up phone calls, posting on social media, and more.

To begin, think about the skills you already have that you can offer your clients. Then, you can advertise or look for work at places like Upwork, also Fiverr, or even Freelancer. You can build up your skillset and get your own clients from there.

It’s a great way to work for yourself as a full-time job or make extra money. That’s why it’s included on our list of how to make $300 a day. And if you need to know how to become a virtual assistant with no experience, we’ve got the perfect guide.

18. Online tutoring

If you’ve mastered a certain subject or you have a knack for taking complex ideas and explaining them, you can learn how to make $300 fast by offering tutoring services. You can also choose to tutor online or in person.

Advertise your services in your neighborhood or sign up with a site like Skooli.

There’s also a great demand for English tutors, so you can make good money teaching English to students all over the world. Check out VIPKid to see if this opportunity is right for you.

19. Become a social media manager

Do you enjoy keeping up with trends on social media? Are you adept at navigating social platforms and growing a following?

If you answered yes to all questions, then becoming a social media manager could be a great side hustle for you, not to mention one of the best work at home jobs. The position takes a long-term commitment, and you’d have to pick up new skills and learn marketing strategies.

Every business, large or small, is now using social media platforms like Pinterest, Facebook, and Instagram to connect and engage with its audience.

But making content and posting on these platforms can be time-consuming, so businesses are hiring social media managers to manage their accounts. You can create a great business doing this and make online money!

20. Offer makeup services

In this era of social media, makeup services are also in high demand. Aside from the usual weddings, graduations, and proms, you can also offer your services to influencers and owners of businesses who want to create content for their websites or their social media profiles.

On average, makeup artists charge between $100 and $400.

In addition, if you can charge a reasonable price to offset the average wedding cost, you’ll likely be ahead of the competition. Hence, it’s one of the most lucrative ideas for how to make $300 a day.

21. Offer photography services

Do you take great photos and are wondering how to get $300 fast? Look no further because you can easily make money by starting a side business offering photography services.

You are not limited to the usual birthdays, weddings, engagements, and prom photos. People are also paying for Christmas card photos and all kinds of events.

You can also offer your services to influencers and business owners who want to create content for their websites and social media accounts. Selling your photos on sites like Shutterstock can also add a few bucks to your bank account.

22. Become a personal trainer

If you love working out, why not turn to your hobbies that make money? You can teach yoga, strength training, or nutrition.

If you have the experience or the expertise, you can also try niches like exercises for diastasis recti, pelvic floor strengthening, or lower back pain issues.

Becoming a personal trainer can help you do what you love while helping others reach their goals as well. That’s why it’s included on this list of how to make $300 a day.

23. Become a blogger

Blogging is a great way to earn an income consistently, though it takes some time. You can definitely work up to earning $300 per day on the internet from blogging using ads and affiliate marketing.

So if you enjoy writing and have interesting information to share with readers, blogging could be for you. You might even branch out and start a YouTube channel with YouTube videos or create products to sell to make even more money. And don’t worry, you can easily find out how to make money with a blog for beginners.

24. Invest

Investors have a lot of options these days. From apps right on a phone or device, such as Betterment, to becoming lenders for start-ups, there are a lot of ways to make money. Investing is a personal favorite for me when I want to make money.

While investing takes time and consistency, if you get started today, you are very likely to accumulate wealth if you allow your money to grow and you choose good investing options. This could lead to making $300 a day over time.

25. Sell plasma

​If you are able to, giving a donation of plasma can make you some money. You can give plasma periodically, but not too often. Over time, you can save up some money, and if you combine this with other ways to earn, you can make 300 dollars in a day.

A one-time donation will earn you about $50 or up to $75. It’s also important to note that the American Red Cross lets you donate only every 28 days. It’s important to not compromise safety and ask a health professional how often it’s safe for you to donate.

26. Proofread or edit

Becoming a proofreader or editor requires some skills, such as reading comprehension, a good understanding of grammar, and sometimes more training.

But there are plenty of places where you can apply to be a proofreader or editor, such as Upwork, and make good money! A proofreader can make, on average, $22 an hour, while an editor can make $25 or more an hour. Meaning you can easily make the $300 you need in a couple of days!

Expert tip: Don’t be too picky

When choosing a way to make 300 dollars fast, it’s important not to be too picky. After all, you need the money quickly. Instead, think about what you have the time to do, what you’re good at, and how soon you can get started.

On the other hand, if you plan on starting a business or side hustle, that requires more thought and effort, and you should certainly choose something that aligns with your financial goals and talents.

It all depends on whether you need money quickly, just one time, or if you will need more cash on a continual basis. For the first, a quick gig like surveys or selling something might suffice. For the second, proofreading or freelance writing is a better option.

How can a kid make $300 fast?

The best jobs for kids to make $300 fast are dog walking/pet sitting, lawn care, or selling items like crafts. Ask your parents if they know of anyone who needs help with their pets or their yard. You can also sell crafts that you make to neighbors or friends for extra money.

Find out how to make money for kids easily with our helpful guide.

How can I make $300 this week?

To make $300 this week, I recommend trying out a few ideas at once to maximize your profit.

For example, ask for overtime at work and also sell some items you no longer need. Other fast ways to make $300 are to run errands for people, babysit, drive for Uber, etc.

How can I make $300 fast in one day?

To make $300 fast in one day, you’ll need to quickly gather everything that you can sell and put it on Facebook Marketplace or eBay. You can also quickly sign up for gigs like dog walking or tasks like errands. While you wait for job opportunities, do surveys.

It’s all about creating a time management plan and thinking of every opportunity possible. If you do all this at the beginning of the day, you can likely make the money you need by the end of it.

Articles related to making money fast

If you enjoyed reading about how to make $300 and you want to find ways to earn even more extra cash, check out these articles!

• 25 Side Hustles For Women That Make Real Money
• How To Make An Extra $1000 A Month: 33 Ways!
• How To Make $500 Fast
• 47 Great Business Ideas for Kids!

Trying to figure out how to make $300 fast? Leverage our list of ideas!

Scrambling to make the money you needed yesterday is not fun. But hopefully, our list of ideas to make 300 dollars fast can help you out.

Don’t beat yourself up if you’re struggling with money now or saying, “I am broke!”. Remember, nothing is permanent, and everything has a solution.

Use these ideas to make money fast and work on building an emergency fund.

By being intentional with your cash, you can free yourself from the cycle of debt stress and struggle. Be prepared for unexpected expenses, and know that you can earn 300 dollars fast to improve your financial wellbeing.

The post 26 Ideas For How To Make $300 Fast! appeared first on Clever Girl Finance.

Are you trying to figure out how to make money without a job? Or maybe you’re tired of your 9-to-5 job and yearn to do something else with your life. Thankfully, the 9-to-5 job is on its way out because you don’t need to work a boring desk job to make a living anymore!

And even if you do have a full-time job, there are plenty of side hustles that can help you earn some extra cash to use towards paying off your debt and bulking up your savings accounts.

When I say job, I mean the desk job that makes you work particular hours. For instance, working at a bank or grocery store. However, there are so many other ways to make a living on your own schedule when you want to know how to make money without a job.

31 Ways to make money without a job

Some of these ideas are web-based, and you can work from anywhere. Others might require special skills or that you live in a specific location. You can use these ideas as a springboard to come up with even more ideas for how to make money without a job.

1. Become a freelance writer

Do you enjoy writing? Maybe you used to have a blog, or you’re always correcting your friend’s spelling mistakes when they text you. If so, then you might want to think about becoming a freelance writer.

Freelance writing is one of the best ways to earn money without a job because it’s lucrative and flexible. According to the Bureau of Labor Statistics, the median pay for freelance writers is $69,510 a year, or $33.42 per hour.

Also, you don’t necessarily need an English or journalism degree to begin. You can often find businesses looking for writers on social media sites like Twitter and job boards like Indeed and build your portfolio that way.

All you really need is an internet connection. And best of all, since you’re a freelancer, you get to set your own hours and decide who you want to work with.

2. Start a blog

Blogging is an interesting way to make money online without a job. So if you’re passionate about a specific topic and are good at writing, becoming a blogger and starting your own blog can be a great option for you to share your expertise. You get to be your own boss, writing blog posts about whatever you want and whichever topics you enjoy.

For instance, if you prefer a variety of topics, then you could start a lifestyle blog. And it’s really easy and cheap to set up using a blogging service like WordPress.

You can make a lot of money with blogging, especially if you have a lot of followers and use affiliate marketing. Affiliate marketing is when you link to products, and that company gives you money for every person who buys those products after clicking on the link on your blog.

However, blogging can be a lot of work in the beginning. You’ll need to know about things like SEO, marketing, and promoting your articles on a social media account or two.

You can also add Google AdSense to earn ad revenue. Blogging is a lucrative side hustle and can be fun too.

3. Earn cash back

Who doesn’t love free money? When you use cashback apps or cards, you basically get paid to do your regular shopping. Several banks and credit cards offer this service, so check to see if yours has this offer.

You can also check out sites like Rakuten, which gives you a discount or cashback when you shop at any of their thousands of partner stores. Others, like Acorns, let you earn cashback when you shop and put that money towards your investing account. And the great part is this takes less time than a part-time job, but you can earn a bit of money.

Be careful not to spend money on things you don’t need or can’t afford. While cashback is a great way to earn extra money, it’s designed to get you to spend more cash. And going into debt just to earn a bit more money is not a strategy I would recommend.

4. Become a virtual assistant

A virtual assistant is someone who works for others as an assistant, but virtually. For example, they might help organize schedules, set up phone calls, handle social media, manage blog content, and more. Best of all, it can all be done from the comfort of your own home.

It’s easy to get started. Just figure out what skills you think you can offer your clients.

Start with just a few, like social media management or email management. Then, you can look for work at places like Upwork and slowly build up your skillset and clients from there.

5. Become a dog walker or pet sitter

Are you an animal lover wondering how to make money without a job? Then why not get paid to spend time with some furry friends!

You can earn money by offering to walk dogs and pet-sit for pet owners in your city or town. Pet sitters make around $38,366 annually or possibly more, depending on your location.

Start by advertising around your neighborhood and using social media. Find groups of animal lovers on Facebook in your city. Or you can join pet sitting sites like Rover to make money fast.

6. House sit

If you want to travel full time and don’t want to pay for a hotel, then think about house sitting. You not only get paid to stay in a nice house, but you can also use the opportunity to travel or visit an area you’ve been thinking about moving to.

There are several sites to find people looking for house sitters, including TrustedHousesitters and Nomador. You may need to take care of the owners’ pets, water the plants, and clean the house, but it’s not that bad of a deal considering those are things you would probably do in your own home.

7. Sell handmade items on Etsy

Do you like to craft or paint? You can sell your handmade items on Etsy. Etsy is an online marketplace for users who make and sell their own creations.

You can sell anything from crocheted dolls to paintings, house decor, vintage items, and jewelry. And with a little bit of SEO knowledge and marketing, you can even make a living out of it.

8. Sell your used items

Selling your unused items is a great way to make money without a job; it’s easy, and it will declutter your home too!

If you have gently used items, you can sell stuff using apps like Vinted and Facebook Marketplace or even hold a garage sale. If you’re selling online, make sure to take good photos and accurately describe the item, including any defects.

You can sell pretty much anything – your old clothes, electronics, old furniture, books, and even shoes and purses. You can generally expect to sell items for anywhere from 30-70% of the original cost. So why not turn that clutter into cash!

9. Invest in real estate

Real estate is one of the more traditional ways to earn money. If you go the traditional route of buying a property and renting it out, you will need a lot of upfront capital. But you can generally get your mortgage covered and then have a little bit of extra money leftover.

But not everyone wants to be a landlord. So instead, you can invest in real estate through crowdfunding services like Fundrise and Roofstock. You can even invest for as little as $500.

The platforms take care of operating the properties while you earn money through quarterly dividends. And you’ll also gain money as the properties you’ve invested in appreciate in value.

10. Babysit

Babysitting isn’t just for high schoolers. If you love kids or even have a few of your own, you can set up a babysitting or nanny service. In some cases, parents may ask you to have CPR certification or even require early childhood education.

You can ask family members, friends, and even your neighbors if they need a sitter. There are online sites like Care.com where you can find babysitting jobs in your area. Often you will get paid right away, so you don’t have to wait a few weeks to get a paycheck.

11. Invest in dividend stocks

Wondering, “how can I make money without a job?” One of the best ways to grow your wealth over time is to invest in stocks. While investing in the stock market often takes time, you can accelerate that growth by investing in dividend stocks.

Dividend stocks are shares of a company that gives you income for holding onto their stock, often on a quarterly basis. So, you are rewarded for holding onto the stock.

You will need to do research on investing to find the best dividend stocks for you.

12. Become a transcriber

Do you type really fast and are a good listener? Do you remember everything, even when it was said years ago? Then transcribing might be perfect for you because these are the skills that can help you succeed in this role.

A transcriber converts audio into text, and the average hourly rate for transcribers is $18 an hour. You can choose your hours and work from home or anywhere there is WiFi. All you need is a reliable computer and fast internet service.

You can use sites like Crowdsurf, Transcribme, and Rev to find transcribing gigs.

13. Make YouTube or TikTok videos

It’s easy to create and upload videos on YouTube and TikTok. All you need is a bit of creativity and a smartphone. If you’ve always wanted to have your own show or a daily vlog, it’s easy to do so by making YouTube videos for your own YouTube channel.

You can also get paid on YouTube through ads and affiliate programs. You’ll need to reach a certain amount of subscribers and views to start earning money.

TikTok is another platform where you can earn money through affiliates. Again, you’ll need to have a decent number of subscribers.

The key to both YouTube and TikTok is to create quality content consistently. You’ll also need to use the right keywords in your title and description, as well as interact with viewers to foster your community.

14. Rent out your home on Airbnb

This is a great hack for how to make money without a job. If you have a spare room or guest house, renting it out on Airbnb could be an easy way to earn money without a job.

All you need to do is sign up on the platform, take good-quality photos, decide how much you’ll charge and how many people you can accommodate, and go from there. Help people have a great vacation and make some cash.

You can choose your own dates for when you want to have guests. It’s relatively inexpensive to get started, but you will need to pay Airbnb fees and either pay to have a cleaner or take care of the cleaning yourself.

15. Write eBooks

Have you always wanted to write a book? You no longer need to have a million Instagram followers or a publisher to have your own book. In fact, the total revenue from eBooks should soon reach $14.16 billion, so writing one can help you make money without a job.

With Amazon, you can publish your book on Kindle without having to pay a dime! While eBooks are priced lower than traditional books, there are no overhead costs. And with the number of people buying eBooks through Amazon, you’ll likely earn some extra money, especially if you promote your book yourself on social media.

16. Make money flipping items

Have you heard of house flipping? Well, you can do the same thing with other items. Flipping is when you find cheap items, improve them, and sell them for a higher price.

You can find cheap items at thrift stores, restore them, and then resell them for a higher price. For example, you can find old furniture, repaint it (perhaps with a unique design) and then sell it online. You can even sell your items on Etsy or use Craigslist, eBay, or Facebook Marketplace to sell to people in your area.

17. Become a notary public

According to Zippia, there are approximately 7,000 Notary Publics working in the United States. Notaries play an important role in the U.S. by handling mortgage signings, notarizing trust documents, and more. It’s a good choice for how to make money without a job.

Notaries are independent contractors, so you can set up your own business. It’s also just a great skill set to have in your arsenal, and you can combine it with other services, like being a virtual assistant.

Keep in mind that each state has different rules for what you need to become a notary, so look up the rules for where you live.

18. Lose weight to make money

Want to lose a few pounds and need to know how to make money without a job? Why not get paid to do it?

With HealthyWage you can do just that. All you need to do is sign up with HealthyWage, and set a goal weight, and limit.

You can place a bet on yourself, from $20 to $500 a month. Once you achieve and maintain your goal, HealthyWage will pay you money, which can be as much as $10,000. Which is an excellent way to earn money and get healthy too!

19. Start a coaching business

Have you successfully started your own business? Do your friends and even strangers keep asking you for career advice? You can start a coaching business and get paid to help others achieve their goals.

There are many types of coaches, so first, you’ll need to decide which kind of coach you want to be.

For example, a life coach helps clients with their life goals, while a business coach helps entrepreneurs expand their companies. You can even become a financial coach to help others with their finances or a fitness coach and help others lose weight. So get started making money for your knowledge!

20. Rent out your car (Turo)

Need help paying your monthly car payments? You can earn extra cash by renting out your car on Turo.

You don’t even need to lend your car often. Hosts can cover their payments if they rent out their car as little as nine days per month.

Turo allows private car owners to rent out their cars via their online marketplace. It’s an easy way to earn money without a job, and you can even rent it out while you are working from home!

All you need to do is sign up for Turo, list your car, and determine your price. You get paid via PayPal within five days and earn 65% to 85% of the trip price.

21. Take online surveys

If you’re serious about how to make money without a job, there are a lot of online survey sites where you can make money by taking surveys.

You can also look for focus groups in your area that are looking for feedback on specific items or services. Companies will often pay users to try new brands or give feedback as part of their market research.

So try out Survey Junkie or Swagbucks and other survey sites and see how much money you can make as one of your side gigs.

22. Become a mystery shopper

If you like shopping for different merchandise, you can become a mystery shopper. You can mystery shop and share your experience to earn some cash. It’s a great side hustle if you’re wondering how to make money without a job, and maybe you’ll get to shop in your favorite stores, too.

Most of the time you can apply online. You’ll likely need to meet the company requirements, as well as provide your resume and answer questions about your previous shopping experience.

23. Sell textbooks

If you’re a student looking to get a head start on the next semester, you can sell your textbooks. Textbooks are a lucrative business, with the industry valued at $3 billion. Students spend on average $1,200 a year for textbooks.

Many students purchase textbooks used and will appreciate the opportunity to buy them cheaper. A good place to begin is Chegg.com.

24. Do photography

Do you enjoy taking photos, and are you asking, “how can I make money without a job?” If you have a bit of talent and a camera, you can easily make money doing photography. Photographers make an average of $33,968 a year according to Zippia.

Do photo sessions for weddings, anniversaries, birthdays, and more. Or if you want to take photos and sell them without all the extra time involved, also try selling your photos to sites like Shutterstock. So many use businesses leverage stock photos on their websites so this can be quite lucrative.

25. Sign up for TaskRabbit

TaskRabbit is a site that connects people who need small, odd jobs done with people who can accomplish them. That can include going grocery shopping, helping out around the house, or even helping someone move.

If you are a skilled gardener, can help people move things, or excel at home maintenance, you can make some money from TaskRabbit. You’ll need to use the mobile app to create an account and go through the verification process, which includes an ID check.

26. Rent out parking or storage space

If you have some extra space that’s just gathering dust, rent it out. A lot of people need a parking space during the day, and maybe yours is empty while you’re at work. And for those that have extra storage space in a garage, you can rent that too.

To get started, try an app to find someone to rent the space. However, always use caution and be careful about who you work with.

27. Deliver with Grubhub

Food delivery is fun and simple. You pick up orders for people, drive the food to them in your car, and make money. On average, drivers make about $15 an hour, but you can make more depending on when and where you work.

You can also work whatever hours you want to with Grubhub. You have the option of working on the side whenever you want, so it’s a great way to supplement your income.

28. Make your own app

Those who have the knowledge can create an app and earn money. New apps are made all the time, so if you see a problem that can be solved with an app, such as habit tracking or financial organization, try it out. You can make money through in-app advertising, in-app purchases, or a subscription model.

There are several free courses on how to create an app that you can check out!

29. Start a gardening or landscaping business

Your neighbors or friends might need someone to help keep their yards looking nice. So starting a landscaping business that offers services like mowing lawns, tending to a gardens, and watering flowers can make you some cash.

To get started you’ll need to provide your own materials, like cutting shears, a leaf blower or a lawn mower. Try adding this to your skill set, especially in the spring and summer months. You can even offer winter services, like snow removal, pressure washing, and tree pruning.

30. Become a tutor

If you know a lot about a specific topic and enjoy sharing your knowledge with others, then tutoring good be a great way to make money without a job.

There are a lot of options when it comes to starting a tutoring business. You can work through a school or franchise, or teach students at your home or even the local coffee shop or library. You can tutor online through tutoring websites like Wyzant or Tutorme.

31. Do graphic design

Do you have a creative knack and are good with computers and design? Then doing graphic design could be a way to make some extra cash. You’ll need to already have some basic graphic design knowledge. If you don’t, you can consider enrolling in a graphic design course or watching tutorials on Youtube.

You can sell your designs online, such as through Redbubble or Gumroad. You can sell physical items like stickers or prints, or digital products like printables, coloring pages, or planning guides.

You can also do graphic design for others by offering your services on platforms like Fiverr and Upwork.

Expert tip

If you want to make money without a job, find something you are passionate about and good at. While you’ll still need to work to earn money, doing something you enjoy is not only rewarding, it helps you stay motivated throughout the process.

Can you make a living without a job?

If you want to make money without a traditional 9-to-5 job, it is possible. The best way to make money without working is to earn passive income through investments. However, you can also make money by working non-traditional jobs, like tutoring, food delivery, renting out your home, and more.

How can I make $1,000 a week without a job?

There are many different ways to make $1,000 a week without a job, like renting out your home through Airbnb, becoming a freelance writer, working as a notary public, or becoming a virtual assistant.

However, it takes time to build up any kind of revenue stream and it won’t happen overnight. If you want to make some extra cash, you’ll need to come up with a long-term strategy and put in a lot of work at the beginning to make it work. Once you’ve established this, you can work toward making it a full-time income.

What is the fastest way to make money without a job?

If you’re looking for the fastest way to make money without a job, then consider taking on quick and short assignments, like filling out online surveys, becoming a mystery shopper, or babysitting. You will often get money soon after completing tasks, making it an easy way to make money fast.

Which of these jobs will earn money the fastest?

The jobs that earn money the fastest are the ones that pay you once you complete a task. Online surveys, renting out your home on Airbnb, getting cash back, renting out storage space, delivering food, or renting out your car are just a few ways that you can start making money quickly.

Articles related to making money

Did you find this article on how to make a job helpful? If so, check out this related content for more ideas!

• 7 Types Of Blogs That Make Money
• The 27 Best Jobs For Stay At Home Moms
• How To Become A Blogger: 8 Steps For Success
• 9 Money Truths You Must Know

You can make money without a job!

So with a little bit of research and creativity, it’s easy to find out how to make money without a job. From pet sitting to writing services and selling used items, there is something out there for you.

So say goodbye to having to work from 9-to-5 and wondering, “how can I make money without a job”, and say hello to a flexible work schedule doing something you love!

As you try out these ideas, you can also research what to do with the money you earn. You can start investing and also begin budgeting weekly to keep track of your income.

The post 31 Ways How To Make Money Without A Job appeared first on Clever Girl Finance.

You’ve read all the books and watched all the Youtube videos but you still don’t know where to start. Sometimes, when it comes to your personal finances, it can be hard to apply generic advice. And that’s probably why you’re asking the question: do I need a financial advisor?

Financial advisors are financial professionals that guide clients, using their expertise, on what to do with their money and how to meet their long-term goals. To offer this, many advisors complete specific training and hold professional certifications.

Maybe you’re in a bit of a financial fix or have bad money habits. Or perhaps things have been going really well, and you want your money to work a little harder for you.

Either way, this article will take a deep dive into what it takes to work with financial advisors. You’ll learn about the different types of advisors, what they do, and when you might need them.

Is it really necessary to have a financial advisor? How to know

Hiring a financial advisor can be costly. So let’s first answer the question, “Do I need a financial advisor?”.

There are some life situations when you should definitely seek professional guidance. These include the following:

You can’t figure out your personal finances on your own

For some people, managing money is more than a chore. You might fall into this category if you’re already asking the question do I need a financial advisor? And that’s OK.

We all have activities where we shine and others not so much. Some people love cooking, doing dishes, or creating art. Others love managing money. 

If you don’t fall into this last bucket, you’re one of many, and hiring a financial advisor is probably a wise move.

When you’re just starting out on your personal finance journey

If you’re new to understanding how to set intentions for your finances, it can be overwhelming. You can learn about the stock market, bonds, budgeting, retirement planning, and saving. The list is endless. So, financial advisors do help un-muddy the waters for you.

When should you get a financial advisor? It is often a good idea to seek professional financial advice as a beginner. Remember, though, that it can cost you hundreds of dollars and more.

With access to information online, it is advisable to do your own financial research first. If you’re still stumped, then you can take the leap and hire an expert.

You have complex financial considerations

If your finances aren’t straightforward, when should you get a financial advisor? Perhaps you’re dealing with major life changes, such as finding out how to prepare for divorce or bereavement.

In cases like these, outside counsel can help you navigate money worries and major life events. These can include complex family matters, multiple financial accounts, or managing cash flow from multiple sources of income.

At any time in your life, whether you’re in your 30s, 40s, or beyond, you may have a major life change, and your finances could look different. It could be anything from a large pay raise to a new baby to sudden monthly expenses.

A financial advisor can coach you on what steps to take next, regardless of what is happening with your circumstances.

When you receive a lump sum of money (such as an inheritance)

If you’ve acquired a large amount of money and you aren’t sure what steps to take, a financial advisor can be helpful. They can guide you on savings and investment decisions and help you decide on some goals for the money.

That way, you can be sure that your finances are being handled correctly, the way that you want, and make a plan so you don’t spend the money without thinking.

When don’t you need a financial advisor?

All money priorities and circumstances are unique. There are instances where you may not need a financial advisor:

You’ve automated your finances

Have you decided to automate your finances so you’re hitting your savings and investment goals? It sounds like you’re already in good shape.

Many people in this bucket have set up a simple investment plan. It will automatically rebalance with little to no need for making adjustments. Here’s an example of a financial plan to ensure you are on track.

You’re looking for tax help

Tax help should not be confused with financial advisory help. While they both deal with your money, the professionals involved are completely different.

A Certified Public Accountant (CPA) is best equipped to support all your tax needs. A CPA who is also passionate about financial planning will be able to touch on your bigger financial picture while homing in on your taxes.

So if you need to make a tax plan, these professionals will be more helpful.

Expert tip

A financial advisor should help guide you in the right direction with your money. Working with one can be a good idea in some cases.

But be sure that you are making the best financial decisions for you at all times, not just following advice. Take time to think things through and make smart choices, whether you work with a financial advisor or not.

Types of financial advisors

So, do you need a financial advisor? To help you decide, let’s look at the different types of advisors for your money.

Robo advisors

A robo-advisor is also known as a digital money advisor. They provide advice based on complex algorithms linked to your personal profile.

A robo-advisor can make automatic investments for clients, and this is great if you have a simple portfolio. But be aware there’s zero human supervision in the process.

Robo-advisors work best for passive investing. And the great news is you only need a small opening balance to get started. It makes robo-advisors highly accessible to everyone.

For a more hands-on approach, hiring a human financial advisor is in your best interests. This person will become your go-to financial resource.

As you might expect, though, the hands-on approach comes at an expense.

Financial planner (CFP)

A financial planner will help you reach your money goals and also works with you on your current finances.

A CFP stands for Certified Financial Planner (Certified by the CFP board), which is what you should look for if you decide to go this route. This person must pass an exam and complete coursework related to financial planning, and they are also a fiduciary, meaning they put the client’s best interest and financial needs first.

Wealth manager

A wealth manager can advise you about your money, and they typically work with wealthy people with high net worth. They focus on investing, estate planning, and other aspects of wealth.

If you have a large amount of money or are trying to grow your wealth, consider this option.

Registered representative

A registered representative may also be a financial advisor, and they are able to purchase and sell securities for the clients they represent. You can rest assured that they have the knowledge to help you, as they are required to pass extensive tests.

Registered investment advisor

A registered investment advisor can offer you guidance about your money. It can be either a person or a company, and they offer help with your investing options.

A registered investment advisor is also held to specific fiduciary standards, which may give you some peace of mind. This is not a requirement for some other types of advisors.

What type of advisory services do financial advisors offer?

A financial advisor serves many purposes. But their primary goal is to help you plan for your future.

They offer guidance on how to save money, what financial accounts you should open, or how to build an investment portfolio if you want to know how to start investing properly. They also advise on how to think through risk, buy a home, and plan your estate (find out more with this estate planning checklist).

How much does a financial advisor cost?

Your financial advisor will use a fee model. The options are usually a flat fee, an hourly rate, or a percentage-based fee.

However, the fee you pay will also depend on whether your advisor operates in-person or online. As you might expect, in-person financial advisors tend to be more expensive.

In-person financial advisors’ fees

When working with an in-person financial advisor, you’ll come across different payment options. Here are some common ones.

Flat fee

Some advisors charge a flat fee. It can range anywhere from $1,500-$3,000 to make your financial plan, to a much higher amount.

With this, you will get a personalized financial plan built to suit your and your family’s needs. It can be useful because having a plan can help you take action.

Percentage-based fee or fee-only

Some charge a percentage-based fee, which is a percentage of the amount you have invested.

An example would be a percentage of your assets under management. The percentage is typically about 1%.

Hourly fee

Lastly, in-person advisors may offer an hourly rate that can range anywhere from $200 – $400 per hour. But, with this type of package, you won’t receive any follow-up or support. You’ll be on your own to put the plan into action.

So, this works best when you are comfortable with handling your own finances. And you must have the discipline to follow through.

Online financial advisors’ fees

Online financial planning offers a lower fee structure. Fees are based on the assets under management, i.e. a percentage-based fee structure, and can range from 0.20% to 0.35%.

There is typically no requirement for large amounts of money to open such an account.

Online financial advisors include platforms like Betterment and also Wealthfront. These give you access to a personal financial plan and ongoing investment guidance.

What to look for in a financial advisor: 5 Question to ask

If you are ready to seek out a financial advisor, here are some key considerations to keep in mind.

1. What is their fee type?

Hiring a financial advisor can cost you hundreds, if not thousands, of dollars. So, it’s crucial to do a ton of research before you commit to a specific advisor. You’ll want to understand exactly how the fees will work for your financial situation.

Fees may differ by state and level of service. The key to remember is that the simpler your investment needs are, the less you’ll have to pay.

If you are just starting out and need basic investment management, then paying $1,000 for an advisor is a lot.

However, if you’re further along with more complex needs, that amount might make sense.

2. Do they have the right certifications and credentials?

Credentials matter. When you sign on with a new advisor, you’re trusting that person to help you build a secure financial future.

A financial advisor needs to have the right certifications and title, for instance, being a registered investment advisor. You should also look for someone who is a fiduciary.

So, the question, in this case, is not so much do I need a financial advisor, but rather do I need this financial advisor?! The right advisor will have successfully fulfilled the requirements of the Financial Industry Regulatory Authority (FINRA).

If you’re looking for a financial planner, you’ll want to work with someone who has a Certified Financial Planner (CFP) title. This will mean that the individual has successfully fulfilled the CFP Board’s requirements – education, exam, experience, and ethics – to receive this designation.

3. Do you work well with them?

When dealing with any advisor in life, a relationship built on trust matters. But when it comes to personal finance, this matters even more as this could impact your entire future.

As you search for a financial advisor, have as many live conversations with them as possible. Do your research and ensure you trust and can depend on the person fully.

Look for reviews, and if you can, ask for referrals. The more aligned you are in mission, values, and strategy with your advisor, the more rewarding it will be to work with them.

4. How does communication work?

If you’re hiring an in-person financial advisor, be clear on how much access to them you’ll have.

Will they be available to answer your phone calls or respond to your emails quickly? How frequently will you be able to meet face-to-face? Make sure these expectations are set before you sign with them.

5. What’s their investment philosophy?

If you have strong opinions on the impact of your investments, then make sure you choose a financial advisor who aligns with your values and understands your risk tolerance or how risk averse you are.

For example, if you prefer to invest ethically, then ensure your advisor is able to choose investments that will use your dollars positively.

Where can I find a financial advisor?

If you’d prefer to deal with an in-person financial advisor, in most cases it makes sense to choose someone local to you. If you’re looking for a reputable financial advisor in your area, check out the following ways to seek out a professional you can trust.

Via personal referral

Nothing beats the power of a referral, as it provides reassurance. You’ll know that someone you trust has received great value from working with the advisor.

In addition, it gives you first-hand proof that the advisor is reliable and has proven success.

But don’t stop there. A referral is only one piece of the puzzle. You’ll want to make sure the advisor provides 5-star treatment to everyone he/she encounters.

Be sure to do your research, and you can even check online for complaints filed to FINRA (the financial regulatory body).

From online reviews

The internet has opened up ways for us to ensure checks and balances are in place before signing up for services. The biggest way the internet helps is through reviews.

As you look at the profiles of financial advisors, look at their personal reviews as well as the reviews of the organizations they are affiliated with.

If you see any concerning feedback but are still particularly interested in working with the person, be sure to ask them about this when you’re interviewing them. You never want to blindly sign up with a money advisor.

At your local bank or financial institution

Work with your local bank or financial institution if you’re looking for a vetted financial advisor. This option will reassure you that you’re dealing with a reputable institution.

When you work with an advisor from your local bank, you’ll pay standard market rates similar to independent advisors. Another benefit is some advisors offer more than investment advice. They can also help with the importance of life insurance.

Are financial advisors the same as investment advisors?

Financial advisors wear many hats, and they may specialize in different areas. Some may call themselves investment advisors.

But, the main aim of each advisor is to provide financial planning services that help you set and meet your financial goals.

Financial advisors also support clients with guidance on investments and retirement accounts like your IRA. They’ll devise plans to support your specific requirements. For example, college savings, retirement savings, estate planning, inheritance, or business finances.

Your advisor may also educate you on insurance policies and investments. 

Investment advisors, on the other hand, tend to specialize in securities.

Remember, anyone can say that they’re a financial advisor, but you want to look for someone who has the credentials and professional designations to prove they can really help you with your money.

How a financial planner is different from a financial advisor

Both a planner and an advisor can help you with your money. But they aren’t exactly the same.

A financial planner takes an interest in the financial goals you want to accomplish over many years and helps you set up a plan to get there.

On the other hand, an advisor can do this as well, but they may also help you with insurance, investments, etc. They may focus more on the investing aspect of wealth.

The main differences between the two are that a planner focuses on meeting your financial goals. An advisor is someone who can help you with this but also other aspects of your financial health.

Is it okay not to have a financial advisor?

Yes it’s ok not to have a financial advisor – not everyone needs one. If your finances are automated, or you already have a great money plan in place, a financial advisor may be an unnecessary expense.

While having an advisor can be helpful for some, especially those with complicated financial situations, it is by no means the right choice for everyone.

Is it better to have a financial advisor or do it yourself?

If your financial situation is easy to manage through automation and/or budgeting, you may be able to handle your money on your own. Especially if you understand financial literacy basics and investing.

On the other hand, if you have a large sum of money to deal with, or you’re trying to grow your wealth, and it seems complicated, you can benefit from the advice of a professional.

Do you need a financial advisor if you don’t have a lot of money?

It could benefit you to work with a financial advisor even if you don’t have a lot of money. You might have a lot of questions about money or are new to managing your finances and an advisor could help.

Then again, dealing with a smaller amount of money may be easier to manage by yourself. You may be able to handle your finances independently through a budget and basic investing skills.

What types of financial advisors should you avoid?

If your advisor is costing a lot of money that you don’t feel is worth it, or you have concerns that they aren’t putting your best interests first, you should avoid them.

You may also choose not to work with someone if something just feels off.

For example, if you notice any red flags like a lack of communication.

Article related to financial advice

If you liked this post about whether or not to work with a financial advisor, check out these articles next!

• Do You Have To Spend Money To Make Money?
• How To Manage A Large Sum Of Money Or Financial Windfall In 11 Steps
• How To Manage Your Money: 19 Tips To Do It Right
• 7 Financial Literacy Basics We All Need To Know

Do you need a financial advisor? Leverage these tips to decide!

If you feel stuck and aren’t sure which way to go, knowing when should you get a financial advisor may not be a bad idea.

And if you’re just starting out in your financial journey and have been asking the question, “Do I need a financial advisor?” then the chances are that a professional may help to put your mind at ease and help you learn how to be better with money.

But as you gain more education and experience, you’ll gradually feel more confident to own the management of your finances. Remember, if you come across any bumps in the road, you can always return to your financial advisor for the latest advice to help you reach your money goals.

The post Do I Need A Financial Advisor? Here’s How To Decide appeared first on Clever Girl Finance.

Need to know how to get money fast outside of your typical 9 to 5? We’ve got you covered! If you’re looking for ways to boost your income without getting another office job, you’ll be pleased to know that there are plenty of genuine ways to make money. Keep reading!

In this article we reveal 18 of the best ways to get money fast without requiring huge investments or years of training.

1. Host city tours

If you’re an extrovert who loves to boast about your local area, being a tour guide could be the perfect way for you to get cash fast. The hours are flexible, and it’s a fun way to earn decent cash.

What does a city tour guide do? Planning and researching your local area, finding customers, and leading excursions. In America, you’ll need to apply for a Sightseeing Guide license before you can offer tours.

The amount you earn will likely depend on where you live and your experience. New tour guides can expect to earn between $8 and $15 an hour, and guides in high-tourist areas can earn up to $150 per day. Plus, if your customers love you, you may receive tips too!

Boost your earning potential by offering a wide range of culinary, adventure, and historical tours.

2. Wait in line for someone

Will someone really pay you to stand in a queue? Yes! Standing in line can be tedious and frustrating, and people are willing to pay others to do it for them.

This is probably one of the most unusual ways for how to get money fast without a job, with minimal effort required. But patience and a professional attitude are a must!

Professional queuers make approximately $25 an hour to wait in line for events, shops, banks, book signings, night clubs, and theme parks. What you earn will vary depending on how long you have to wait.

You can find line stander jobs by using an app such as TaskRabbit and Spotblaze that connects you with people that want to pay for your service.

Be aware that some apps may charge a commission for each job you complete, affecting your overall earnings. But it’s a super easy way to make some dollars!

3. Organize things for others

Sometimes, we all need some help to organize everything in our homes. So, if you have a natural ability and passion for organization or decluttering your life, this could be how to get money fast without a job for you.

I’ve found that organizing can also be rewarding and fulfilling, as I need to find new organizational systems and storage solutions that work for individuals and their lifestyles. Multi-tasking, discretion and flexibility skills, and organizational know-how are essential to do well as a professional organizer.

The salary range for a professional organizer in America is typically between $53,000 and $74,000 a year, but you can set your own rate. The more practice and recommendations you get, the more you can charge for your services.

There are certifications and courses that you can take to enhance your skills and make you more desirable to potential clients. Time to get organizing!

4. Give virtual babysitting a go

A virtual babysitter is basically someone who keeps a child entertained for an hour or so via a screen. It has become a lifesaver for busy parents who need to do work or household chores whilst their children are at home. It’s also a great money earner for people who don’t want a standard job.

Activities could include:

• Doing homework
• Playing games such as I Spy or Simon Says
• Learning dance moves
• Reading

So how much money would you make as a virtual nanny? The going rate is up to $25 per hour. You’ll earn more by going solo, but most people start out working for an agency until they’ve gained some experience.

You can use job platforms such as UrbanSitter to search for virtual babysitting jobs or start your own business. You don’t need to spend loads on equipment, but it’s worth investing in a good quality headset and ensuring your internet connection is reliable.

5. Become a mock online juror

Attorneys use mock online jurors to understand how the actual trial will go, almost like a pre-trial. When opportunities arise, it’s a great way to get money fast, but work is sporadic, so don’t rely on it for regular income.

As a mock juror, you will read case notes or watch videos and provide your opinion at the end, just like you would if you sat on a jury. Anyone can do it, but you do have to be at least 18 years old and have no criminal record.

Earnings will vary on average from $10 to 60 for a day’s work. You will likely find mock online juror jobs in your local newspaper or by signing up for online platforms such as eJury to find work.

6. Keep bees

Looking for an unusual and fun way to make money? Keeping bees can earn you a nice profit, and it’s not just about selling honey.

Here are the best ways our small buzzing friends can help us financially:

Sell pollen

Pollen is worth more than honey because it’s only available in tiny amounts. You can collect pollen via pollen traps in the beehive for a few hours daily. It’s essential not to take too much pollen from the hive because bees need it for their babies.

Once you’ve collected enough, you can either sell it fresh or preserve it by drying it (this also lengthens its shelf life).

Harvest wax

You can either sell beeswax in its natural form or have a go at making beeswax products such as candles and lip balms. This is a great, fun way to boost your profits!

The amount you can charge for beeswax and beeswax products will depend on the area you are selling in, but typically prices are around $2 to $8 per pound. However, Beeswax candles are also a lucrative market.

Rent your bees for pollination services

This method has the potential to earn you some serious dollars. But it does require more equipment and experience than the other ways to make money from bees. People typically pay around $200 to borrow your bees for pollination.

To start as a beekeeper, you will need a hive, bees, and beekeeping equipment such as a frame lifter, protective clothing, a smoker, and other hive tools. Do plenty of research first before investing in this new money-making venture.

7. Send and answer text messages for money

Do you spend lots of time on your cell phone every day? There are genuine ways to make extra cash by simply using your device.

We’ve done the research to find the top three websites and apps that pay you to text.

IMGR

This instant messaging app connects brands with users via chats. When you sign up to IMGR, you will receive offers, discounts, and information on new products in exchange for points. Your points can then be exchanged for cash.

1Q

The 1Q platform is designed to help businesses gather valuable marketing data. To do this, they send users questions, polls, or surveys to answer. You only need to respond with a text message and get paid $1 for every four answers you provide.

Just Answer

Just Answer is a Q&A platform where you earn money from answering questions in an area of specialism, for example, technology, cars, or animals. As an expert, you can make more money than the other apps, sometimes up to thousands of dollars a month.

The amount you get paid will fluctuate from a few dollars to $100+ a week, but the best thing about this method of making money is that it’s quick and easy.

8. Take part in clinical trials

If you’re interested in medicine and helping develop new treatments, this is how to get money fast. It’s an unusual way to make cash, though, and it does come with some risks that you need to be aware of before signing up for a paid clinical trial.

Payment rates vary hugely and will depend on the trial itself. For example, you will make more for participating in a trial with risks.

In addition to money, you will also be covered for expenses such as travel, accommodation, and food.

Taking part in clinical trials may be worth considering if you’re comfortable with needles and taking untested drugs. The National Institutes of Health is great for paid trial opportunities.

9. Sign up for writing contests

If you write professionally as a freelance writer or as a hobby, you can get paid well to enter and win writing competitions. This is one of my favorite ideas to use my skills to get money fast.

The more contests you enter, the more chance you have of winning and earning cash. Another way of making money is to sell the stories or articles you have written for competitions to a publisher or publication. How much you win will vary from a few hundred dollars to thousands.

An effective way to find writing contests is to use web searches regularly. There is no limit on how many you can enter, so do as many as possible! Different search engines will generate different results, so don’t just use Google.

10. Translate for people

Translating is a good way to make money fast if you are fluent in another language. Businesses regularly need help translating text from websites and manuals to ensure nothing is misinterpreted. This is where your skills come in.

Freelance platforms such as Fiverr and Translate.com are a great way to find translation work. All you need to do is sign up, set your rate, and apply for listed jobs. How about offering your services as a live translator?

Translators can make good money. The average hourly rate is $31! You can set your working hours and earn as much or as little as you want.

11. Donate plasma

This way to get money fast may be a bit on the extreme side, but it’s a legit way to make dollars.

Plasma is a yellow liquid that is found in the blood. Its role in the body is to carry nutrients and proteins all over the body.

During the donation process, a machine extracts plasma from your blood so scientists can use it to treat certain health conditions such as blood clots, burns, and autoimmune diseases.

Before signing up, there are a few things you need to know:

• You must be over 18 years old.
• You’ll need to drink plenty of water and eat iron and protein-rich foods before donating.
• You won’t be able to eat junk food on donation day!
• The process can take up to a few hours, so take something to read or listen to while you wait.
• You may feel dehydrated and tired after you donate plasma, so it’s essential to rest.

The price you get paid for your plasma will depend on the rates set by your local donation center. On average, you can make $50 to $75 per donation, which is not bad for less than two hours of your time.

There is a however limit on how often you can donate safely, though (usually once per month).

12. Get paid to lose weight (If you’re on a weight loss journey)

If you’re on a mission to lose some pounds, you can earn some money in the process. Whilst this is a legit way how to get money fast, it isn’t for everyone, and there are things to consider before signing up.

Money is a great incentive to help you stick to your weight loss goals and help your finances too! So, how does it work? There are websites and apps that ask you to enter your goal in exchange for a financial reward if you meet it.

The amount of money you get will vary depending on the platform and plan you set yourself. Prizes can range from $200 to thousands of dollars.

Popular weight loss programs to consider are HealthyWage, DietBet, and Sweatcoin. If you sign up, remember that losing weight should not be detrimental to your health, and avoid overdoing it just to reach your goal and earn money.

13. Test products

Product testing is another option if you want to get cash fast. Companies send you their products for free so you can test them out and give your opinion on their usability, visual appeal, and value for money.

In exchange, you’ll receive cash, although sometimes you may receive gift cards or complimentary products, so make sure you find out what the reward is before signing up.

Look for product testing jobs with companies such as:

• UserTesting
• Johnson & Johnson Consumer Perception Program
• BetaTesting
• America Consumer Opinion
• SheSpeaks

Product testers can earn between $24 and $33 per hour.

14. Listen to people’s problems

If you are a good listener and like supporting people, this can be how to get money fast without a job.

Paid listeners make a massive difference in the lives of people that need someone to talk to, so it’s an extremely rewarding way to make money. You’ll hear from people with various issues, from relationship difficulties and mental health problems to those who need to learn how to stop worrying about money.

Even if you don’t have an advanced degree or certification, there are ways you can get paid to listen to people’s problems. Here are a few to consider:

Apply for jobs on FlexJobs

The FlexJobs site screens and lists genuine job adverts looking for listening experts for various roles.

Get paid to type

Transcription jobs are perfect for good listeners! Spend your time listening to audio and typing up the information. The best place to find transcription jobs is on job sites or transcription sites such as Rev.

Listen to podcasts

Everyone loves a podcast, and a lot of work goes into creating them. Editing podcasts is a great way to use your listening skills and get paid. Find podcast work on sites such as Fiverr and FlexJobs.

15. Sell your breast milk

Ok, so this method of how to get money fast isn’t for everyone, but it can help moms and babies who need milk to be healthy and thriving.

If you want to sell your breast milk, selling it via a milk bank is the safest way to earn money. Mother’s Milk Cooperative is a fantastic online community of moms who choose to sell or donate excess breast milk. 

If you’re currently nursing your own baby, you won’t be able to donate spare milk until your baby is at least three months old. You’ll also need to pass a donor and blood screening process first.

16. Play games

Yes, it’s totally possible to get cash fast by playing games! Earning while playing can be a good money earner if you know where to look.

Here are a few of the best apps that will pay you real money for simply playing their games. Keep in mind that you want to play games to win, meaning you should not be putting any money upfront. This approach is considered gambling and can be very dangerous.

Blackout Bingo

Play the classic game of Blackout Bingo against players worldwide. Climb the leaderboard and receive cash and prizes.

Solitaire Cube

The game of Solitaire Cube is a race against the clock to complete each game. The quicker you complete it, the more bonus points you receive. Play head-to-head with other players for cash rewards.

Cash Giraffe

Cash Giraffe allows you to play various games and cash out your earnings. Unlike some gaming apps, you only need a balance of $0.20 to cash out, so it’s an excellent way to make money quickly.

Swagbucks

Swagbucks is one of the most popular gaming sites. It offers members new games regularly that you can play for cash.

Mistplay

The Mistplay app encourages users to try new games in exchange for cash rewards and gift cards. There’s a wide range of card games, strategy games, puzzles, and survival games to suit everyone.

Exactly how much you earn will vary depending on pay rates and how much you play.

17. Sell your hair

Human hair is in high demand, and not just for the fashion industry. Hair is used to make wigs and extensions for people that lose their own due to age or an illness.

So, if you’re considering having the chop, why not make a difference in someone’s life and make some money too?

You can sell your hair online via eBay or other selling sites or direct to wig makers and some hair salons. Your hair must meet specific rules and criteria before the buyer will part with their cash, so ensure you know these before getting your hair cut.  

This isn’t going to earn you mega bucks (hair usually only grows up to six inches per year), but it’s a great way to get money fast.

The value of human hair can range from $100 to $1000, but here’s a handy hair price calculator to help you determine how much you could get paid.

18. Look for taste-testing opportunities

If you’re a real foodie, getting paid to eat food may sound like a distant dream. But it’s actually a genuine way to earn approximately $10.14 per hour!

You don’t need a bachelor’s degree for most taste-testing jobs, but you do need good taste and odor sensory skills.

Here are some top tips to help you find work as a food tester:

• Look out for market research companies and sensory testing businesses that often hire panelists in your local area.
• Restaurants sometimes hire food testers for market research purposes.
• Register with companies such as Focus & Testing and NC State University Sensory Service Center to hear about their latest opportunities.

So, what are you waiting for? Earn a living whilst trying delicious food. It’s a win-win!

Expert tip

To make money fast, I’ve personally found that I need to leverage modern technology and take on more than one small job. Not sure which is the right money earner for you?

I’d make a list of my skills and hobbies that make money, then narrow down that list to things that I want to spend my time doing (whilst making dollars!).

How can I get quick money right now?

The best way to get your hands on cash ASAP is to do something you can start right away and get paid quickly for it. Examples of things to do include, selling items, product testing, hosting city tours, listening to people’s problems and taking online surveys.

How can I get $1,000 cash fast?

The easiest way to make $1,000 cash quickly is to choose a hustle that has a higher chance to earn you more. For example, I’d recommend a small business like organizing people’s homes or beekeeping that is likely to make you a big amount of money fast.

Alternatively, you can try out several methods at once to bring in more money quickly. Consider this guide with “how to start business from scratch” ideas.

How can I earn $100 a day?

Earning $100 a day can be achieved by selling something for cash. Ideas of things you can sell include electronics, home-made skincare or beauty products, furniture, clothing, accessories and more.

Other side hustles that involved offering a service can also help you earn $100 a day. For example, tutoring, babysitting, organizing things for others etc.

Most of all, remember that the more side gigs you start or, the more you work on your business, the easier it will be to make $100 in a day.

Articles related to how to get money fast

If you enjoyed learning about how to get money fast, check out these other articles for more ideas!

• How To Make $500 Fast
• 29 Ways How To Make Money Without A Job
• How To Get Free Money Now! 15 Effortless Ways
• 21 Realistic Ways For How To Save Money Fast!

Earn money fast to help with your finances!

Once you know how to make money without a job, there will be no turning back to wishing your days away sitting in an office.

There are so many opportunities to earn cash these days but watch out for scams and remember to do something you love – life is too short to do anything else! And to make the most of your earnings, try out a money saving game!

The post How To Get Money Fast: 18 Ideas Outside of Your 9 to 5! appeared first on Clever Girl Finance.

You work hard for your money, and it’s only right for your money to return the favor! Leveraging the best compound interest investments is essentially a way for your money to make money. These investments are widely recognized as one of the most powerful tools for growing money over the long term. 

There’s even a popular quote that says: “Compound interest is the eighth wonder of the world.” It’s often attributed to Albert Einstein, but the fact-checking jury is out on whether that’s accurate.

Either way, if you don’t have time for a trip to Machu Picchu or the Great Wall of China, the wonder of compound interest can change your life no matter where you are!

With the right strategy and a mix of the best compound interest investments, you can take advantage of the power of compound interest and maximize your returns. Let’s learn about how it works and nine of the best investments for compound interest!

9 Best compound interest investments

If you’re looking for ways to start growing your money, this list is a great place to start! Here are nine of the best compound interest investments and how to start leveraging them. 

1. High-interest savings accounts

High-interest (also called high-yield) savings accounts offer one of the safest, easiest, and best investments for compound interest. In my opinion, everyone should have one!

Many traditional savings accounts barely pay any interest. If you look up the savings account interest rates at most brick-and-mortar bank chains, you might find numbers that are awfully close to zero…like 0.01% APY. Interest that low won’t compound very fast.

High-interest savings accounts, meanwhile, can offer yields that are exponentially higher than the national average. Normally, you’ll find these accounts at online banks or local institutions rather than nationwide chain banks. Since online banks have lower overhead expenses than their brick-and-mortar counterparts, they can invest more money into paying high yields to customers. 

Even better? Many of these banks offer daily compounding on the interest you earn. That means every single day, the interest you earned yesterday is calculated as part of your balance.

Then, that interest will immediately start earning interest too! All interest you accrue will usually be paid as a lump sum at the end of each month. 

How to invest in a high-interest savings account

You can find high-yield savings accounts at many different banks and credit unions. Consult Investopedia’s list here to see which savings accounts currently offer the highest yield. Be sure to also read up on the terms and possible fees for each one. 

2. Certificates of deposit (CDs)

If you have savings that you aren’t going to need in the immediate future, consider investing in CDs! Not the music kind, though—the “certificate of deposit” kind.

So, what is a certificate of deposit? CDs are essentially fixed-term, fixed-rate investments that require the investor to deposit a certain amount of money into the CD for a specified period of time. That could range anywhere from a few months to 5+ years.

Usually, the longer the term, the higher the interest rate will be. When the CD matures, the investor can either cash it out or reinvest the funds in another one.

Generally, CDs offer higher interest rates than savings accounts (but not always—make sure to compare your options). They usually also pay compound interest; you’ll have to check the individual terms to see how often it compounds.

The downside of CDs is that they aren’t as flexible as savings accounts. You can’t just withdraw whenever you want and may face early withdrawal penalties if you want your money before the savings term is complete. (On the flip side, this can “force” you to save money, which is helpful if you struggle with impulse spending!)

How to invest in a certificate of deposit

Many banks and credit unions also offer CDs to customers seeking a higher-interest alternative to savings accounts. Investopedia also has a list of the highest current CD rates, so that’s a great place to start your research. Decide how long you’re willing to have your money locked up and choose accordingly.

3. Treasury bonds or notes

The U.S. government offers a variety of bond and note investments through TreasuryDirect. These are safe and stable investment choices that let you lock in a good rate for the future.

Also called T-bonds, treasury bonds are extremely long-term investments with terms of 20 or 30 years. Treasury notes (T-notes) come with shorter terms of 2, 3, 5, 7, or 10 years. You can decide to sell bonds and notes before they mature without facing a penalty.

Both T-bonds and T-notes come with a fixed interest rate, paid every six months until maturity.

However, unlike with many other compound interest investments, the interest doesn’t automatically get added to the principal amount. Instead, it gets paid to you directly. That puts the compounding decisions in your hands. 

If you own T-bonds or T-notes and want to make your interest compound, save up your interest payments and use them to buy more bonds or notes. You can buy them in increments of $100, so as soon as you’ve earned $100 in interest, you can get a new bond and keep the interest accruing!

For those who want their interest to compound automatically, check out EE or I savings bonds. EE bonds come with fixed interest, while the interest on I bonds can change every 6 months based on the inflation rate. 

How to invest in treasury bonds or notes

Start by creating an account on TreasuryDirect if you don’t already have one. This is the simplest and most direct way to research current rates and make purchases.

You can buy EE or I savings bonds anytime. If you want T-bonds or T-notes, you have to wait for specific bond auction dates to buy them.

4. Corporate bonds & bond funds 

The government isn’t the only place you can get bonds. Corporate bonds are debt securities that individual companies issue. Bondholders essentially loan money to these corporations to help finance their growth and operations. In exchange, they receive regular interest payments. 

Bond funds are similar, but instead of investing in one bond from one company, you’re investing in a pool of bonds managed by an investment company. This helps diversify your investments, which reduces the risk you might face from any one company defaulting on their debt.

Traditional bonds don’t offer compound interest, although you can choose to reinvest your profits in more bonds or bond funds. Zero-coupon bonds are an exception to this rule. When you have a zero-coupon bond, you don’t get paid periodic interest.

Instead, the interest compounds over the term of the bond, and you receive everything as one lump sum on the maturity date.

How to invest in corporate bonds & bond funds 

You’ll need an account at a brokerage (e.g. Vanguard, Fidelity, etc). There, you can purchase bonds and bond funds, as well as stocks and other types of investments. Bonds are a simple way to learn how to start investing.

5. Money market accounts

A money market account (or MMA) is another type of interest-bearing account offered by many financial institutions. It shares an acronym with “mixed martial arts” and might be just the thing to get your money into fighting shape!

MMAs traditionally function like a kind of hybrid between checking and savings accounts. Like a checking account, they may allow you to use a connected debit card and write checks. Like a savings account, they tend to pay higher interest rates, and you can expect interest to compound on a daily or monthly basis.

Some money market accounts have minimum deposit requirements, which makes them a bit less flexible than the average savings account.

However, there are also plenty of MMAs without strict requirements. These can be a great alternative to traditional savings accounts! 

How to invest in money market accounts

Check out which banks are offering the best rates on money market accounts right now. Review the terms and benefits of each one to decide if you’d like to open an MMA.

6. Peer-to-peer (P2P) lending opportunities

With most of the best compound interest investments on this list, you aren’t doing any direct lending. Instead, you’re engaging with a middleman (like a bank or investment firm) to handle the loan logistics while you just provide money. With peer-to-peer (P2P) lending, it gets a lot more personal.

Through a P2P lending platform, you lend money directly to individuals or businesses that need it. In exchange, of course, they pay you interest on the loan. You can harness the power of compounding by reinvesting that interest in other loans or investments.

P2P lending can offer attractive interest rates compared to some of the other options on this list.

However, you also face an increased risk. If any of your borrowers default on their loans (aka stop paying), you’re the one who absorbs that loss. 

Many peer-to-peer lenders enjoy having a more personal involvement in their investments compared to simply buying stocks and bonds.

For instance, it can be satisfying to help fund a business with a mission you care about and watch them grow.

How to invest in peer-to-peer (P2P) lending opportunities

Find a trustworthy P2P lending platform that works for you. Some have strict requirements for their investors, like a certain income or net worth. Here are some of the most accessible P2P lending platforms for investors.

7.  Dividend stocks

These next few investments are a great example of compounding growth since they don’t technically pay interest. I mentioned dividend stocks earlier, so let’s learn more about them now.

Dividend stocks are just like other stocks: they’re shares of a publicly traded company. The value of a dividend stock can go up or down at any time, depending on the market and the company’s performance. 

What sets dividend stocks apart is that they regularly distribute a portion of their earnings to their shareholders in the form of dividends. You can turn this into a compounding investment by reinvesting your dividends to purchase more shares, which in turn leads to an increase in your overall dividend income over time.

However, you should note that there’s no guarantee a company will continue paying dividends. They could decide to reduce their dividend payout or even eliminate them in some circumstances. Plus, the company’s stock could go down, so it’s best not to rely on this as an income source.

How to invest in dividend stocks

You can buy dividend stocks through any stock market brokerage. Or, you can diversify your risk by purchasing shares of dividend funds (which contain a variety of different dividend stocks).

Dividend funds may pay you dividends as income or may automatically reinvest the money so it can compound.

8. Index funds and ETFs

Index funds and exchange-traded funds (ETFs) are very similar investments. They’re both collections of stocks, bonds, and other securities that track an underlying index (the biggest example is the S&P 500 index). 

The main difference is that ETFs are easier to buy and sell throughout the stock market trading day just like stocks on the open market. Index funds are only available for trading at the end of the day trading price. They are also typically bought directly through the fund company and may have higher barriers to entry (like minimum investment amounts).

Investing in index funds and ETFs is widely considered one of the smartest financial moves you can make. That’s because both of them have diversification built right in.

If you buy a total-market fund, you can essentially own a little piece of the entire US stock market!

Many brokerages allow you to set up automatic dividend reinvesting, allowing your investment to grow over time through the power of compounding. 

How to invest in index funds and ETFs

You can buy ETFs through any brokerage or stock trading app. Index funds are available through their providers; most major brokerages have their own index funds. Learn more about investing with index funds to see if it’s the right choice for you.

9. Real estate/REITs

Do you have a passion for property? Investing in real estate could yield a higher return than other investments, and it can also provide a steady income stream. 

Traditional real estate investments require a larger amount of capital upfront since you’ll need to buy properties and get them rental-ready.

Whether you buy residential or commercial property, you’ll earn income by leasing your property to tenants. Reinvest your profits by improving your properties or purchasing new ones.

If landlord life doesn’t sound like your thing, don’t worry! There are simpler ways to invest in real estate. REITs, or real estate investment trusts, offer a way to invest in real estate assets through the stock market.

By law, REITs have to distribute at least 90% of their taxable profits as dividends to the shareholders. You can reinvest these REIT profits to compound your investment.

How to invest in real estate/REITs

To invest in real estate or REITs start by doing your research. For real estate, explore locations, property options, and financing options. You’ll also need to do some math to figure out the potential profit margins. REITs can be purchased at a brokerage just like you would index funds.

It all depends on what kind of investing you want to pursue! Discover more about real estate investing for beginners and decide how to build your wealth.

Expert tip

You can choose from multiple investment options. But the main point is that your money isn’t just sitting there – it’s creating more money for your future. You can start off simple with a high-interest savings account and then work up to more complicated investments later once you feel that you understand the process.

It may also be a good idea to diversify your money by placing it in a few different compound interest investments, especially if it’s a large amount.

What is compound interest?

In the most basic terms, you can think of compound interest as “the interest you earn on interest.”

But how does compound interest work? To help establish our foundation, it helps to understand what exactly interest is. Interest refers specifically to the cost of borrowing or lending money.

If you’ve ever had a loan, you’re familiar with paying interest. Earning interest is a lot more fun, though! 

So, how do you earn interest? Let’s say you decide to store your money in an interest-bearing account at a bank.

The bank then uses your money to make money via lending and pays you a percentage of the interest while also keeping some profit for themselves. On your end, you don’t have to worry about lending risk: your money is secure thanks to FDIC deposit insurance, and you’ll receive regular interest payments. 

Compound and simple interest

Interest generally comes in one of two forms: compound or simple.

When an investment pays compound interest, each interest payment you earn gets added to the original amount you put in (your principal). Then, the next interest payment is calculated on that new total (principal + accumulated interest).

This process continues indefinitely, allowing you to make more money from your investments in the long run as the interest earned compounds upon itself. (We’ll look at an example in the next section!)

Compounding can happen faster or slower depending on how frequently interest is calculated and applied to the investment. Interest could compound daily, monthly, quarterly, semiannually, or annually. The more often it compounds, the faster your investment will grow.

The opposite of compound interest is simple interest. This means that interest is only calculated using the original principal amount. Accumulated interest is not added to the calculation.

How does compound interest grow your money?

The simple answer: with compound interest, your money makes money, then that money makes money too! That translates to constant, automatic growth.

Investing example

Here’s a quick example of how it works:

First, you invest $1,000 into an account that pays 5% APY (annual percentage yield). To keep it simple, we’ll say the interest is paid yearly, and you don’t add any new funds to the account as time goes by.

At the end of year 1, you’ll earn $50 in interest, so you will have $1,050 in the account.

During year 2, you’ll earn interest on that new balance of $1,050. That means you’ll earn $52.50, and your balance will increase to $1,102.50.

Interest for year 3 clocks in at $55, continuing to increase your balance.

This process will continue until you withdraw the money or something else happens, like a drop in interest rates. If you don’t touch the money and the rate remains the same, each interest payment should be more than the last.

As you can see, compound interest makes your money grow without any extra effort from you. You didn’t have to do anything except save money in the right type of account and give it time.

How long will it take to double your money?

The amount of time it takes for compound interest to double your money depends on several key factors: the rate of return, the length of the investment, and the frequency of compounding. You can use a compound interest calculator to easily crunch the numbers.

For example, if you invest $1,000 in an account that offers a 5% rate of return, and it compounds monthly, it would take a little over 14 years to turn that into $2,000. Doubling it to a 10% interest rate would cut that to just over 7 years. 

If you continue making contributions to the account on a monthly or yearly basis, your money will obviously add up a lot faster!

Is compound interest the same as compound growth?

People often use the terms “compound interest” and “compound growth” interchangeably. However, there is technically a difference. Compound interest is essentially “the interest you earn on interest.”

Compound growth, on the other hand, factors in the “interest that you earn on interest” and represents the average rate of growth on your investments based on the reinvestment of interest earned and dividends, as well as investment appreciation over a period of time e.g. multiple years.

One thing to keep in mind when it comes to compound growth is that all investments can grow, but not all investments pay interest. e.g. Some investments earn dividends and can appreciate.

For example, Let’s say that instead of investing in an interest-bearing account, you buy dividend stocks. You still get regular payments based on a set percentage rate, which can then be reinvested to help you buy more stocks or earn more money.

However, the money you get from dividend stocks isn’t technically “interest”—it’s a “dividend yield.” Which is an annual payment to shareholders based on the current price of the investment.

Since compound interest and compound growth have a similar mechanism, our list of best compound interest investments will include multiple investment types, not strictly interest-bearing ones. As long as they’re expected to grow regularly and allow you to reinvest the money, these investments can all help compound your wealth!

Articles related to compound interest investments

If you enjoyed this article on compound interest investments, check out this related content:

• How Does Compound Interest Work For You?
• How to Invest In Dividend Stocks For Beginners
• What Is Dividend Investing And How Does It Work?
• Investing Money For Beginners: How To Start Investing Today!

Choose the best investments for compound interest for you!

What are the best investments for compound interest for your situation? That part’s up to you! For the best results, you can leverage a mix of the best compound interest investments. 

To start, I recommend opening a high-yield savings or money market account to store your emergency fund. You can also use these for any other savings you want to keep stable and easily accessible, like sinking fund categories.

After that, you can open a retirement savings account and start filling it with investments like dividend funds, ETFs, bonds, etc.

You can decide to devote any extra money to treasury bonds, real estate investments, CDs, P2P lending, or whatever else makes sense for your financial situation.

No matter what direction you go in, it’s important to do your research before investing.

There are risks associated with all types of investments, and you want to be confident in your choices. (Take our quiz to find out how risk-averse you are.) Knowledge is power, so keep researching and learning more!

The post 9 Best Compound Interest Investments appeared first on Clever Girl Finance.

Let’s talk about saving money for your child via custodial accounts and education plans. Different types of custodial accounts for minors can help you save for your child’s future. Here’s how they work!

Parent-owned custodial accounts for minors are a great way to pass on generational wealth to your children or grandchildren.

In addition to being useful for education, custodial accounts have multiple purposes, from college to wealth building. A child’s parent or a grandparent is most likely the person who will set up a custodial account.

College is obviously a large expense, and custodial accounts and 529b plans may be the answer. Parents are making saving a priority.

The Saving For College survey found that 40% of parents had saved up over $30,000 for their kid’s college. However, only 7% of parents feel that they have enough money saved up for college costs.

What is a custodial account?

A custodial account is fairly easy to figure out. It’s simply an investment account that an adult controls for minors who are under the age of majority, which is 18 (in some states, 21).

In my custodial accounts, I can invest funds in the stock market for the financial goals I have set. Saving for my children’s college student education is one of them.

There are a few very important factors to keep in mind with custodial accounts for minors. They include the following:

Your child might need to pay taxes on any income the account makes

Income from interest, dividends, or capital gains, may need to be included in your tax returns or your child’s tax returns. (It’s best to clarify this with a qualified tax accountant.)

There are tax rules around monetary gifts you give your child

The rules are complicated surrounding gift taxes. You may be able to give away a certain amount of money a year as a gift, such as 18,000, without paying taxes.

However, there are many rules that apply, and asking an accountant is the best course of action.

The money does not have to be used for college

A big advantage of the custodial brokerage account is that the beneficiary can use this money for anything. It’s not directly tied to your child’s education.

It also means that it isn’t limited to just tuition and fees like college savings plans. But do keep in mind that this could also impact financial aid eligibility for your child.

Types of custodial accounts for minors

There are a few types of custodial accounts that you can choose from. Choose the one that works best for you and makes the most sense for your financial situation.

Uniform Gift to Minors Act

With a UGMA, the custodian can make investment choices and put the money in bonds, stocks, mutual funds, ETFs, and other investing options. It can be very beneficial if you’re saving up for large future expenses.

Withdrawals need to be for the minor the account is for

A great feature about these is you have the ability to make a withdrawal of money from this account, as long as it benefits the minor the account is for. Which may come in handy to pay for education before college or other expenses for your child.

No formal trust is required

A main advantage of UGMA accounts is that you don’t need to set up a formal trust. You can use the money you deposit in this account to invest in your child’s future, and they are simple to set up.

Not tax-deferred

An important thing to note is that this type of account isn’t tax-sheltered, which may affect your decision.

Uniform Transfers to Minors Act

UTMA accounts are quite similar to the UGMA. The one major difference that you’ll notice is what makes up the account. 

Property can be part of the account

The UTMA can include property. You can give real estate, jewelry, and other items to the beneficiary of the account. It’s a good option if you have property or assets like a car or a home and you want to someday transfer ownership to your kid.

Not tax-deferred

As with a UGMA, the UTMA is also not tax-deferred.

Education savings accounts

There are a couple of options for savings accounts, specifically for education. Here’s what you need to know.

529b plan

With a 529b plan, you can set aside funds for your child’s future college student budget expenses, i.e., tuition, books, and other educational costs. These funds can only be used at accredited 2 or 4-year colleges, vocational and technical schools, or at eligible foreign colleges.

Unlike custodial accounts, there are contribution limits with the 529 plans. Contribution limits are typically between $300,000 and $500,000 depending on the state.

529b’s are typically set up by the state, but you can open a 529b in a state different from your primary residence. Some states offer special tax deductions if you open a 529b in the state where you live.

That said, you want to make sure you are aware of all restrictions on the account, including where your child can attend college. You also want to be aware of the fees and costs you will be paying compared to the tax deduction you will get. Here are some of the benefits of a 529b account to help you answer the question, “Is a 529 plan worth it?”

Money grows tax-deferred

The main benefit of having a 529b in place for your child is the tax benefit. Once you begin making contributions, your earnings can grow tax-deferred. Those distributions will not be taxed by the federal government if you use the money for qualified education expenses (which is the purpose of the 529b).  

Withdrawals can be made at anytime

You may take money out of a 529b at any time for any reason. However, if you don’t use the money towards your child’s college education costs, then you will have to pay income taxes and also a 10% federal tax penalty.

The money is invested

Since the 529b is a state-sponsored program, your money is typically invested on your behalf by established brokerage firms. You can open your 529b account in various funds and pick what plan works best with your objectives for your child’s college savings.

One of the most popular approaches for how to start investing for college is selecting funds based on the age of your child.

One approach starts out investing more aggressively, but as your child approaches college age, the mix of investments gets more conservative, i.e., more money in cash and bonds vs. funds.

Alternatively, you can create your own investment mix from the brokerage firm’s available portfolios in their 529b plans.

Remember, with a 529b plan, the money still belongs to you, whereas with a custodial account, the funds belong to the child.

My story with 529b plans

As a mom to twins, one of my financial goals is to support my kids when they go to college. To achieve that goal, I have put a couple of things in place to support this plan.

They include splitting up the college savings for each of my children between custodial brokerage accounts and 529b plans.

For example, I chose the New Hampshire 529b plan, although I live in New Jersey. At the time of writing this, my state does not offer any sort of tax deduction or incentive around the 529b.

However, under the New Hampshire plan, my kids can go to college anywhere in the country.

About 33% of families are saving for college using 529 plans or other college savings plans. They are great educational resources. A state or state agency sponsors these plans and provides tax-advantaged savings.

Almost every state has at least one plan, and you can even opt into an out-of-state one if you’d like.

Coverdell Education Savings Account (ESA)

A Coverdell ESA can help you pay for educational expenses for your child, including more than just college.

Covers elementary through high school

You can also pay for other educational costs from elementary through high school using this type of account. 

It may come in handy to fund an account like this, especially if you plan on sending your child to expensive private schools or if you think their education costs will be high even before college.

Tax-free distributions

Distributions to a Coverdell Education Savings Account are tax-free as long as they do not surpass the beneficiary’s qualified education expenses. The distributions can be used for expenses like tuition and fees, as well as for a computer, books, and other school supplies.

Similar to a 529b you can open an ESA with a brokerage firm and your contributions are invested. You can find more contribution information on the IRS website.

Expert tip

There isn’t one perfect solution for saving for your child’s future. Consider options for education e.g. scholarships and grants, as well as other ways to save e.g. looking at 2-year vs. 4-year colleges.

Communicate with your family and your kids about these financial decisions so they know what to expect and how to prepare for this money when the time comes.

Best custodial accounts for minors

If you don’t know where to begin looking for the right accounts, here are some of the best custodial accounts for minors from reputable companies.

• Fidelity
• Vanguard
• Merrill Edge

The above options all offer a simple process to transfer ownership of the account to your child. There are also lots of investment options including ETFs and mutual funds. And very importantly, you can manage the accounts from your mobile device.

Other options to save for your child’s future

There are a couple of other options if you want to go another route with saving.

Custodial 529 plan

A custodial 529 plan is a combination of a 529 plan and a custodial account. But the child is both the beneficiary and the account holder. It can help you save for college and other big expenses for your kid’s future.

Prepaid tuition plan

Prepaid tuition works similarly to a credit system. You essentially prepay future tuition and fees at today’s costs.

The stipulations set by the plan you have (e.g., covers tuition for only a specific university) limit your funds. These are becoming less common.

Joint savings accounts

A joint savings account is a great opportunity to start saving up money and also teach your children about how finances work. Your kid can have a supervised bank account, so you are aware of all spending.

You may also open a checking account for your child, depending on what you want to use the money for.

It’s a simpler option if you want to start teaching your kids about money and you’d like to begin saving for their future, but you aren’t ready to commit to a custodian or 529b account yet.

Roth IRA for Kids

Want to help your kid prepare for retirement early? Everyone knows that the more time an investment has to grow, the more money you can potentially make. 

Roth IRAs give you the opportunity to save for your child’s retirement tax-free. While it may seem like retirement is a bit too far in the future, this can be an excellent way to help your child build wealth over time.

What is better 529 or a custodial account?

A 529 is a great option for education. But the other hand, a custodial account for minors helps with education, as well as other purposes.

Your kid may use the money for various things, such as purchasing a home. Or they can avoid finding out how to start a business with no money by using the savings from their custodial account.

So there is more flexibility with a custodial account, but if you’re sure that college is in your child’s future, a 529 also works. If you’re still unsure, consider consulting a financial advisor.

Are custodial accounts a good idea?

A custodial account may be a smart way to pass on generational wealth and help your child with college and educational expenses.

However, to determine if it’s the right choice for you, you need to look at your own financial situation.

First, are your finances in a good place for you to start investing for your child’s future? Do you have emergency savings and retirement savings? If so, and you have the means to add money to an account for your child, custodial accounts for minors can be a good idea.

However, also remember that the money will be your child’s once it is added to the account. You will no longer be able to use the money for anything, so be sure that you can afford this first.

Can parents take money from custodial accounts?

Any money transferred into a custodial account now belongs to your child, and you are essentially the custodial manager.

Meaning legally, you can only use the funds in this account for expenditures that benefit your child, not yourself. You cannot withdraw this money and use it for whatever you want.

Should you open a custodial account for your child?

It’s a personal choice that has to do with your budget and finances, as well as your child’s plans for the future. You may prefer a custodial account if your kid is undecided about going to college or if you’d like the option to pay for more things than just education.

In addition, custodial accounts are a good idea if you plan on giving your child any sort of property like real estate.

What happens to custodial accounts after 18?

Once your child reaches age 18 or age 21, they are no longer a minor and will gain full control of the account.

The specific age of 18 or 21, when your child is no longer a minor, depends on the state you live in. That said, it’s important to start teaching your children financial responsibility as early as possible.

Topics like how to manage credit card debt and balancing school and work as a college student are key lessons you can teach your child for their financial success!

Related posts to custodial accounts

• The Best Investments For Teens And How To Start
• 7 Best Stocks For Kids
• Budgeting For Kids: How To Get Them Started
• Financial Literacy For Teenagers: Key Money Tips For Teens

Save for your child’s future starting today!

As college expenses continue to rise, it’s important to take steps today with custodial accounts for minors or educational savings accounts to help your child get an education without worrying about the debt burden of how student loans work.

If you are a new mom or preparing for a baby, it’s not too early to start. And if you’re years behind, don’t worry; it’s never too late, either.

The post An Overview Of Custodial Accounts And How They Work appeared first on Clever Girl Finance.

Building wealth involves making smaller investments and seeing them grow over time. Sometimes known as flipping money, investing your money in various projects, assets, and skills could help you make extra money. Discover how to flip money here!

Keep reading to learn some of the best ways to flip money. We’ll also look at some of the potential downsides to money flipping and how you can get started safely.

What does flipping money mean?

There’s no standard definition for flipping money. If you want to flip money, you’re essentially investing it.

You invest a smaller amount of money into assets or projects that are expected to increase in value. Once the value goes up, you sell your portion for a profit. With that, you find a way to learn how to invest with little money.

One of the most well-known ways to flip money is by flipping houses. This is where someone buys a fixer-upper house and renovates it. After renovation, they sell the house for more than they paid (and more than the cost of renovations) to make a profit.

As an investment, it’s important to remember that a money flip could lose value. There’s no guarantee that your flip will make money.

The good news is it’s also possible to make a lot of money through flipping. For example, you might be able to discover how to turn $10k into $100k.

Before you start flipping your money, it’s best to take the time to do lots of research. Things to look for in a flip include:

• How much will it cost to invest in the flip?
• How long will it take to see a profit on the flip?
• Are there customers who want to buy what you’re flipping? For example, is a fixer-upper home in a neighborhood with a buyers market or sellers real estate market?
• What are the potential risks of the flip?
• How much hands-on time will the flip require? Is that a passive or active investment?

Is flipping money the same as gambling?

No, flipping money isn’t the same as gambling.

The main difference is your ability to control the outcome of a money flip versus a gamble.

In gambling, your payout is based entirely on luck and chance. For example, let’s say you buy a lottery ticket for $10.

You have absolutely no control over the outcome of the ticket. Nor can you increase your chances of getting a winning ticket.

On the other hand, flipping is more similar to discovering how to start a business from scratch than gambling. You’ll take calculated risks in your investment.

Good luck, of course, can help make a flip more successful. However, there are a lot of factors you can influence or even outright control to increase your chance of success.

Is it legal to flip money?

Yes, there are lots of legal ways to flip money. In fact, legally flipping money can be a fun way to make some extra cash.

That being said, there are plenty of money flipping scams and illegal methods to flip money.

The key to avoiding scams or illegal methods is to do your due diligence when looking for a flip. That means taking the time to fully research the process of the flip as well as any third parties that might be involved.

Be sure to avoid flips that seem too good to be true or ask you to give all of your trust (and money!) to a stranger.

Money flipping scams are especially popular on social media sites. You’ll see an ad for an “investment” that promises to help you grow your money fast. These scams might even come from a hacker posing as your friend.

How to identify money flipping scams

Some telltale signs of a flipping scam include:

A lack of information

There’s no additional information on the company or investor. If you can’t find anything about the flip on the internet, it’s best to avoid it.

Requests for money

The flipping process involves sending money or a prepaid card to an unknown party. This is a huge red flag!

Fake/hacked accounts

Your friend posts about easy ways to flip money, but the post seems off. It may sound different than their normal tone. This most likely means their account is hacked.

Remember the most important rule of investing: if something seems too good to be true, it probably is! Watch out for ponzi schemes, pyramid schemes, and steer clear of anything that doesn’t make sense with investing.

Being safe while flipping money

Flipping is a type of investment. Choosing to invest smart could make you a ton of money and have a high return on investment. Or you could lose money.

If you’re going to start flipping money, you have to be ready for either possibility. Help yourself stay safe while flipping by following these tips:

• Don’t invest more than you’re willing to lose.
• Don’t jump into a flip without researching it first.
• Do protect yourself from hackers or scammers by using two-factor authentication and other cybersecurity tools.
• Do have patience when waiting for a flip to increase in value. Some easy ways to flip money aren’t fast, but the long-term success can outweigh the wait.

11 Real ways to flip money

Ready to learn how to flip money and put it to work for you?

If you want to know the best way to flip money, here are 11 both online and offline ideas.

1. Real estate flipping

As we talked about before, flipping houses is probably the most well-known flipping method. You can make a lot of money by buying a house that needs some renovations and reselling it after.

However, getting into the real estate investor flipping market isn’t easy. It requires a lot of upfront capital to buy a property.

Even a cheap fixer-upper will likely cost several tens of thousands of dollars.

Then, you have to pay for materials, contractors, and inspections to bring the home back to life. Plus, the time it’ll take to do renovations—especially if you’re tackling projects on your own.

Luckily, there are other ways to start real estate investing for beginners and flip your money using properties.

For example, you could invest using a real estate crowdfunding platform. Like Kickstarter or GoFundMe, these real estate-specific platforms let groups of investors pool money to buy real estate properties.

2. Flip websites or domain names

If houses are physical real estate, then domain names and websites are digital real estate. And just like houses, you can flip them and make money online.

Flipping websites or domain names is one of the easy ways to flip money. However, there’s some research involved to help make your flip more successful.

Take Mark Levine, who made six figures in a year, domain flipping part-time. When he buys a domain, he does so if he sees that it would be useful and has potential.

Websites take a little more effort to flip than domains. You often need to build the website—and a following. Once a website is established, you can flip it for a profit.

You’ll need to consider your skills, the time you have available, and the market for flipping digital assets. Generally, a domain name flip is an easy way to flip money, while a website flip takes a lot more work upfront.

3. Resell goods online

Imagine you’re shopping for a new cell phone. You find an electronics store that’s going out of business. They’re selling last year’s iPhone model for half the current price!

You could just purchase one for yourself and get a great deal on a new phone.

Another option is to buy several and resell them to other people for a higher price.

You buy 5 phones for $500 each. The current MSRP is $1,000. You sell each for $700.

Your buyers get a great deal. You make $200 in profit from each phone—a total of $1,000.

This is an example of a resell money flip (also known as retail arbitrage).

Reselling products is perhaps the best way of flipping money. However, luck will play a big part in reselling goods.

You have to find products at a discount to make a profit reselling them. If you have to buy close to MSRP, you might not make enough in resale.

You’ll also want to make sure there’s a reliable market for your products. iPhones or the latest Samsung Galaxy cell phones will probably sell. It will likely be harder to sell a no-name phone with limited features.

Some people find resale flipping a really fun way to make extra money. Looking for good deals from retailers can be a bit like treasure hunting. You never know what great deal you’ll find and flip to buyers.

You can also sell the items in multiple places, like eBay or also Facebook Marketplace, if you want. The more places you sell the items, the more opportunities for people to buy.

Drop shipping to flip money

If you like a little more predictability, you can also look into e-commerce drop shipping as you learn how to flip money.

Drop shipping is the process of selling goods to customers—without ever even seeing the product.

Amazon is one of the most well-known dropshipping platforms. You can open an online store on Amazon and drop ship goods from wholesalers.

Amazon handles the whole process of storing, packaging and shipping your goods to consumers. You pay a fee for this service, which comes out of your profits.

Drop shipping can be incredibly successful. The setup takes only minutes, so it’s easy to get started.

Be aware, however, that a lot of people are doing the same thing. The difficult part of drop shipping is setting your store apart from millions of others. You’ll need to invest some time into marketing your store.

4. Bank account churning

Did you know many banks offer incentives for you to open a new account?

It’s usually in the form of extra cash added to your account. Think of it as a gift from the bank for being a new customer.

The art of bank account churning takes advantage of those incentives. It works like this:

• You open an account at a bank with a new account offer.
• You meet any requirements, such as a minimum deposit, to get the extra cash.
• You withdraw the extra cash and your initial deposit.
• You close the account.

It’s one of the rare times when something sounds too good to be true, but it’s not. Bank account churning is a real—and legitimate—way to flip money.

Banks, of course, don’t want you to do this. To help cut down on churning, most banks require accounts to stay open for a minimum amount of time.

You’ll need to keep your account open for this period before withdrawing your cash to avoid penalties.

It’s also important that you read all of the fine print in your bank documents before trying to churn an account. Missing a disclosure or detail could result in expensive penalties. You could also be barred from opening an account in the future.

And, of course, consider the question, “How many bank accounts should I have?” before opening up several of them.

Bank account churning example

Let’s say a national bank offers a $300 bonus for new customers to open a checking account. You have to deposit $500 at the opening to get the bonus funds. Your account must stay open for at least 90 days, or you face a $200 penalty.

You deposit $500 into your new account. The bank deposits an additional $300 as a bonus.

You keep the $800 in the account for the first 90 days. After 90 days, you withdraw the money and close the account.

Credit card churning

Credit card churning works like bank account churning but with credit card intro offers. Many credit cards let new cardholders earn a statement credit based on their initial spending.

For example, you open a new card that gives a $200 statement credit if you spend $1,000 in the first three months.

To churn credit cards, you open new cards to collect the welcome bonus offers. Then, you close the card and move on to the next one.

Churning credit cards is a lot riskier than churning bank accounts. You could seriously damage your credit score by overspending and opening new accounts.

There’s also the risk that a credit card company will close your account. New card companies might deny your application due to too many new accounts.

5. Traditional investing

One of the most common ways of flipping money is through traditional investing. It includes investments like stocks, bonds, and mutual funds.

Basically, traditional investments are what you trade on the stock market.

Traditional investing works by buying a share of a company. As the company’s value goes up, so does the value of your shares. You can then sell your shares to make a profit.

One of the biggest downsides to traditional investing is the time it takes to build wealth. Very few people get rich quickly by buying and selling stocks. The best way to flip your money on the stock market is to invest for the long haul.

Luckily, investing is probably one of the easiest ways to flip money. You don’t even have to manage your investments by yourself.

You can choose a traditional financial advisor or planner to manage your money. These financial professionals take day-to-day management of your investments. They’ll recommend buying and selling opportunities based on your risk tolerance and investing goals.

First, ask yourself, “Do I need a financial advisor?” before you make a choice.

You can also put your money into a Robo advisor platform. Most major investment platforms offer an automated investing tool.

All that’s needed is to answer some questions about your risk tolerance and wealth-building goals. The technology will take care of investing your funds based on your answers.

6. Non-traditional and alternative investments

Alternative investments can be another easy way to flip money as well. Like traditional investments, you may have to wait several years to see worthwhile returns on your initial investment.

However, over time alternative investments can have one of the highest returns on investment.

Two of the most common alternative investments are commodities and collectibles.

Commodities

Commodities are raw materials that have value. Common examples include corn, precious metals, oil, and natural gas.

Collectibles

Anything of value that you can keep as a collection can be a collectible. For example, fine wines, art, stamps, and baseball cards can all be collectibles.

You can invest and trade commodities in physical ownership (where you actually hold the product). Of course, you probably don’t want to store thousands of bushels of wheat. Many people trade commodities on futures markets or the stock market through ETFs.

Collectibles often have a little more risk than commodities. Their perceived value may not be the same as their actual value.

Consider Beanie Babies. They were incredibly popular in the late 90s. Many people kept tags and bears in mint condition in hopes of someday reselling them.

But no one seems to want to purchase them. Their value is almost nothing, except perhaps a few very rare pieces.

On the other hand, some collectibles have proven their staying power. Fine art, for example, is generally considered a solid collectible investment. There are many appreciating assets to choose from, so choose what makes sense for you.

7. Flip money by fixing physical items

Being handy with tools could prove to be a good way of flipping money fast.

Fixing and flipping goods is a little like reselling products. You’ll find a product at a discount price and sell it for a profit.

The difference is that you’re buying broken or run-down products instead of new ones.

That means you’ll also have to put in some time and effort to make the product like new again.

For example, say you’re skilled at restoring and flipping furniture. You go to local yard sales and flea markets to find old furniture. There, you pick up an old chest of drawers with a broken drawer for $50.

You fix the drawer and sand the chest. With some paint and new hardware, the piece looks better than ever. Someone buys it for $300—$250 more than you paid.

This flipping method is one of the most involved. You’ll have to physically do the work (or contract it out) to get products ready to sell.

For many people who flip money, restoring old products just isn’t worth the time and cost of materials.

On the other hand, finding the best items to flip can be a great way to make extra money while doing a hobby you love. If you’re passionate about restoring old cars or fixing up furniture, becoming a flea market flipper could be ideal for you.

For flea market flipping, you can check thrift stores and garage sales for items. And as one of the bonuses, it’s pretty easy to start without much money.

8. Invest in land

Real estate investing usually focuses on rental properties or house flips. However, there’s another type of real estate that doesn’t require extra work to improve the property—land.

Both vacant land and assets like farmland can be incredibly lucrative ways to flip money. Many investors regard land as one of the most profitable real estate investments. After all, you can’t make more land.

The data backs this up as well. According to the USDA, farmland values have increased every year since 1988 (except in 2009 and 2016).

The biggest drawback to investing in land is the cost, of course. Like buying houses to flip, you’ll have to have the upfront money to purchase your investment.

9. Rent out your extra space

Do you have any extra space in your home? You could flip it for money.

Renting extra space in your house or apartment (also known as house hacking) is a simple way to earn some cash and learn how to flip money fast.

It’s simplest if you own your own home. Most landlords don’t allow tenants to rent out a portion of their rental.

Homeowners, however, can use their extra space to their advantage. You don’t even have to take on a new roommate to do it!

For example, you could rent out an extra bedroom on platforms like Airbnb or VRBO.

But having an extra living space isn’t necessary to flip money renting your home.

Do you have extra storage space in a closet or garage?

You can rent that storage to someone who doesn’t have enough space. You might be shocked how many people would rather store their things at someone’s private home than in a large commercial storage facility.

A disadvantage of renting your home, however, is giving access to others. If you rent out a room to a guest on Airbnb, for example, you’ll be letting unknown guests stay in your private space.

10. Use apps to flip money

Using apps is one of the best ideas for how to flip money fast with minimal money.

Try out investing apps like Betterment that allow you to invest your cash and earn a profit over time. There’s also the Acorns app that rounds up your purchases and helps you invest the difference, using a small amount of money to grow your wealth.

Use cashback apps like Ibotta or also Rakuten and then invest what you earn back. Rather than collecting money in the form of gift cards, get the cash and start earning. Then you’ll be making more money for your future!

Rakuten and Ibotta will allow you to earn cash back as you make purchases, and you can then cash out after you make a certain amount of money. So it’s a good way to earn as long as you aren’t spending money you wouldn’t normally spend.

Doing this process of spending as usual, getting money back from apps, and then investing it is a great way to earn.

11. Flip businesses

You can buy an existing business that isn’t doing well and turn it around to make a profit. There’s a lot to this, such as actually finding a business, buying it, and getting it to make money, but it is possible.

At the end of it, you could wind up with a successful side hustle or full-time business that makes an income for years.

However, you need to be smart when buying a business. Look at the numbers, paperwork, and all information to be sure the business is legitimate before buying.

Expert tip

You can make extra cash by being savvy with your money and flipping it. But it’s essential to remember, don’t spend money you don’t have. Work with the money you have saved up, and don’t go into debt to flip cash.

How to flip money fast!

Flipping money isn’t necessarily meant to be a “get rich quick” scheme. You’ll probably find that many money flips are medium to long-term investments.

If you want to know the best way to flip money fast, you’ll have to look for the right opportunity. It could mean you have to wait a little while to get started.

House flipping, for example, could be a way to flip money fast. A house in decent condition may only need a few repairs before it goes back on the market.

Say you buy a house for $200,000. You put in $50,000 of repairs and list it six months later for $400,000.

It sells one month later, and you make $150,000 in profit in less than a year. Of course, you have to have the money to put into the flip to make it work.

Where to find the money to start flipping

Although it may seem challenging to learn how to flip money, most of the battle is finding the money to get started. And some ideas don’t require much money to begin.

You can start by simply cutting the budget and saving up some spare change until you have enough money to start flipping.

Starting a side business to save up some cash is also a possibility. Choose one with minimal start-up costs.

Last, you can start one of these money-earning ideas that doesn’t require a large amount of money to begin. Something like flipping furniture is a good option, or using apps to build up money savings over time.

And once you have all that extra cash, what should you do with it? First, keep the money you earn somewhere safe, like high-yield savings accounts.

You may have ideas for saving up an emergency fund or paying off debt. And you can always put the money back into your flipping business and make even more cash if you’re unsure what to do with it. A savings account can also be one of the best places to store cash while you decide what’s next.

Related posts to money flipping

Enjoyed this article on flipping money? Check out this related content!

• 25 Best Items To Flip For Extra Cash
• Here’s How To Make Your Money Work For You!
• Do You Have To Spend Money To Make Money?
• How To Grow Your Money: 7 “Must Do” Tips

Flipping money is possible if you choose something that works for you!

The best way to flip money for you may be different than someone else’s successful flip. Consider different options for flipping money to find one that works for you.

Remember to think about how much money you can invest, how much time you have to spend on the flip, and how long you want to wait to see returns. Time and money are important factors for this.

Our free investing and money courses are also a great way to get more information about putting your money to work!

The post 9 Ways For Flipping Money: Make Your Money, Make Money! appeared first on Clever Girl Finance.

The post How To FI: Become Financially Independent With These Steps appeared first on Clever Girl Finance.

The post Portfolio Income And How To Earn It appeared first on Clever Girl Finance.

The post 39 Best Money-Making Apps To Cash In Big! appeared first on Clever Girl Finance.

The post The 3 Main Ways To Create Multiple Sources Of Income appeared first on Clever Girl Finance.

The post How To Start: Passive Real Estate Investing appeared first on Clever Girl Finance.

There are few things worse than needing access to cash but not knowing where it’s going to come from. Unexpected life events can cost serious money, and often there’s a pretty tight timeframe to cough up the goods. If your brain is screaming, “I need money desperately today,” it can be tempting to turn to credit cards or take out a loan if you don’t have an emergency fund.

But we’re here to offer more creative ways to raise cash quickly without getting into debt!

Why might I need money desperately?

Home repairs, car repairs, and medical expenses are common reasons for being in desperate need of money. Funeral costs, large medical bills, and the cost of a job loss can also leave a gaping financial hole to fill.

If you suddenly need to replace stolen belongings or need to shoulder costs due to a natural disaster, this can also be expensive.

But everyone’s finances are different, and there are multiple reasons you might need extra cash at any time.

How to have the right attitude when in desperate need of money

The first thing to remember is that necessity is the mother of invention. Not heard this expression before? It means that we can be super creative in our problem-solving abilities when something is essential.

We need to think a little more outside of the box. Then we can find unique ways to raise cash that we haven’t considered before. So if you have less money in your checking account than you’d like, don’t panic.

Even when I need money desperately, I remember there’s no limit to how much cash I can raise. And at speed, too! So rather than worry about online lenders, an application process, and good credit scores, try another way to get the money you need.

For example, how about starting a side gig if you have a full-time job? Or, if your home has rooms you hardly ever use, perhaps you could downsize or rent them out.

Things to avoid when you desperately need money

If you’re in a pinch, payday loans, emergency loans, and credit cards can be tempting to get you out of your bind. Lenders heavily advertise these as the perfect solution for situations exactly like those you’re facing. And unfortunately, they’re known to target women of color with these products.

Payday lenders

Some of these financial products have more favorable terms than others so you might be attracted to the idea of fast cash from a loan provider. But often, payday lenders are promoting loans with a high-interest rate of around 400% APR.

So, unless you have a very solid repayment plan (and many people who desperately need money sadly don’t), it’s challenging to pay back the loan. Plus you may also incur high-interest fees to pay off as you try to prevent your debt from spiraling out of control.

Credit cards and cash advances

Credit cards are another thing that might seem like a good solution but aren’t. Since borrowers need to pay back credit cards promptly, even if you have a good credit history, paying back the funds can be challenging.

In addition, you may have heard of a credit card cash advance. This is when you borrow money from your credit card. However, depending on eligibility criteria, you may not be able to borrow as much as you’d think, and it can wind up being another bad solution.

So rather than taking out a personal loan or dealing with bad credit loans or other debts, when your bank account is empty, get your thinking caps on and devise creative ways to raise cash for unexpected expenses.

Thinking, “I need money desperately”? 34 Ways to raise cash

If you’re desperately in need of money, consider some of these ways to raise cash. Remember to use them as a starting point and you can come up with more ideas along the way.

1. Downsize to a smaller home

Downsizing to a smaller home can make sense for both renters and homeowners. If you own your home outright, you could sell it. Then you can use the cash to buy a smaller property or even rent long-term.

If you’re a renter, you could look for a smaller apartment or house to share with others. Living in a smaller place will also help to reduce your monthly bills.

2. Rent out your parking space

Parking spaces are like gold dust, especially if you live in the city. If you have a private driveway to spare, don’t leave it vacant when you could be making money off this valuable real estate.

You could list your parking space on a platform, where people can search for and book spaces for their vehicles.

3. Rent out your storage space

If you have a garage, attic, or lock-up, this is another excellent way to make extra money. You can list your storage space on platforms like Neighbor, where people in need of storage can find and book your space.

4. Rent out your spare room

Renting out a spare room is possible for anyone who isn’t ready to downsize. You may want to find a roommate to live with you long-term, or perhaps you’d prefer to welcome ad-hoc visitors AirBnB style. Either way, this is a fast way to bring in the cash.

5. Rent out your car

If you’ve found yourself saying, “I need money desperately,” and you don’t use your car regularly, this could be another cash card. If you don’t want to sell your vehicle, try renting out your car to other drivers on a car-sharing marketplace like Turo.

6. Sign up to TaskRabbit

Are you good with your hands and putting IKEA furniture together for fun? If this sounds like you, why not get paid to help people with their odd jobs? It’s a great way to make money today and add to your savings or pay bills.

From putting up shelves to painting people’s homes, you can do all sorts of tasks to earn money on TaskRabbit. Consider making yourself available for same-day tasking. That way, you can start earning fast when you’re in desperate need of money.

7. Sign up for a freelance platform

Do you have any skills that can be sold online? For example, web design and development or social media marketing, or even writing and editing? If so, start picking up odd jobs on a freelance platform like Fiverr or Upwork.

You can start earning as soon as the platform has approved your profile (typically a quick process.) The initial few jobs you take may not be great earners. But once you’ve built up some positive feedback, you can start bidding for higher-paying jobs.

8. Sell your clutter on eBay

We may not have dollar bills lying around our homes, but often there’s quite a bit of value in the items we own but no longer need. Spring cleaning is the perfect opportunity to have a good sort out and sell anything you don’t want or need on eBay.

If you need money now or urgently, opt for an auction-style listing with a low starting price and let the bidding war commence! You could wind up with some cash by the next business day!

As an in-person alternative, you can have a garage sale. It’s easy to throw one together quickly, put up some fliers, and then have the sale over the weekend for some quick cash.

9. Sell crafts on Etsy

If you’re a dab hand with a set of knitting needles or like to make your jewelry, set up an Etsy shop to make some extra money. Start by selling items you already have.

As your money-making craft business grows, you can start making new items to sell. When you’re desperately in need of money, every little bit helps!

10. Sell photos online

If you love taking photos, you could make money by selling your snaps online. Sites like Alamy allow you to upload your pictures and set a price. Once they sell, you’ll receive a commission.

11. Ask your employer for a salary advance

If you have a regular paycheck, one option for getting your hands on some extra cash is asking your boss for a salary advance. It is effectively a loan from your future wages, but it can tide you over if you need to pay emergency expenses.

While a salary advance isn’t ideal, it can work out fine as long as you make a plan for your budget.

12. Negotiate a raise

A pay raise can be a good way to get money fast. If you’re already employed but struggling to make ends meet, then it may be time to chat with your manager about a pay raise. Negotiating your pay raise requires some consideration.

You’ll need to be strategic with your timing and present a clear case to explain why your company should pay you more.

Don’t go into the discussion with an “I need money desperately” vibe. Instead, focus on how much extra value you bring to the company. Execute this well, and you may be surprised at how much extra cash you can earn each month.

13. Borrow money from your relatives

Need money now? Your family might be able to help but asking family for a loan can be extremely sensitive. Often, many of us are too proud to admit we need help. But if you’re in dire straits, it may be worth considering.

If you decide to do this, always draw up a plan with the loan amount and repayment terms, in order to get back on your feet as soon as possible and avoid putting unnecessary strain on your relationship.

It could be one way to get a loan without dealing with a loan application or high interest.

14. Babysit kids in your neighborhood

If you’re a natural with kids and need fast access to cash, then offer to babysit for local families. Many parents are eager to find a reliable sitter who lives nearby, gets along well with their kids and is available at short notice.

You could start by advertising your services on local social media pages, check out Care.com for jobs, or even put up flyers in your neighborhood.

15. Pet-sitting and dog-walking

A lot of people have pets, but they may not be able to get home in the afternoon to feed or walk their pets, especially during business days when they’re at work. That’s where you can help and maybe get your next paycheck fast if you need money now!

Help ease the pressure of pet ownership by offering to dog walk for neighbors or pet-sit while people are away on vacation. You can use the internet to find dog walking gigs, using sites like Rover. Or simply ask people you know.

16. Offer gardening and landscaping services

A green thumb and some basic gardening equipment are all you need to offer gardening services to your neighbors. From weeding to planting, there are plenty of ways to help people spruce up their yards.

And there are jobs available every season, from shoveling snow in winter to mowing lawns in the summer.

17. Offer cleaning services

Cleaning services are always in demand, so if you’re desperately in need of money and you don’t mind the hard work, this might be a good match.

Start by offering your cleaning services to friends and family, and then once you’ve built up a good reputation, you can start charging other people for your services.

You don’t need to stick to home cleaning. Offices and small businesses also need regular cleaning to meet health and safety requirements while keeping their premises sparkling.

18. Offer tutoring services

If your grades were solid in school, or you’re particularly good at a certain subject, the tutoring market could be an excellent place to dip your toe into. First, figure out which age range or topic you want to teach (for example, math, flute, or biology).

You can either seek students in your local area or join an online tutoring platform to teach people from further afield.

19. Deliver flyers for local businesses

Delivering flyers brings in extra cash and keeps you active outdoors. Start by approaching local businesses and see if they have any upcoming campaigns you could help with.

Once you’ve got a few clients on board, design a delivery route to make the most of your time and energy.

20. Become an Uber driver

If you’re a car owner with a few hours to spare, sign up with Uber and earn money as a driver. This can be quite lucrative, for example, in New York City, drivers earn about $26.24 an hour.

Say you work ten hours a week as a side gig, you’d bring in an average of $1049.60. Not bad at all if you’re in desperate need of money.

21. Put up holiday decorations

Ever seen those phenomenal houses in your neighborhood with stunning holiday decorations? Well, they didn’t get there by accident.

Luxury homeowners hire people to assemble their decorations, and this can be quite a lucrative gig in the run-up to Halloween or Christmas.

If you have access to a ladder, have some basic tools, and aren’t afraid of heights, this could be the perfect opportunity.

22. Sell your engagement ring

Selling your engagement ring can be a huge step, especially if you’re still in a happy, committed relationship with the person who gave it to you.

But if it’s from a previous relationship, or if you’ve upgraded your ring, then selling your jewels could be the right decision to bring in some quick cash.

Get a professional appraisal, so you never sell for less than the ring is worth, and take steps to ensure no one scams you during the sale.

23. Sell your car

If you’re in a bind and need to raise some quick cash, selling your car could be a winner, especially if you don’t use it too often. Cars can fetch a surprisingly high price, especially if they’re in good condition and have low mileage.

24. Sell or exchange your unused gift cards

Have you ever gotten a present like a gift card for your birthday but never gotten around to spending it? Or perhaps you’ve been given a voucher for a store you never visit.

Whatever the reason, if you have an unused gift card burning a hole in your pocket, then it’s time to turn it into cash. Do this by selling the card directly to a gift card exchange site.

25. Donate your plasma for money

Plasma is the liquid part of your blood packed with antibodies and other proteins that help fight infection. You can donate yours approximately once a month to earn some extra cash.

According to CSL Plasma, some donors can make up to $1,100 in their first month. In addition, they explain that compensation rates vary with plasma donation centers, with an average of $50 to $75 per donation.

26. Donate your eggs to support another family

Women going through fertility struggles often seek help from egg donors to improve their chances of pregnancy. Donors are then compensated financially for donating their eggs.

It’s a serious physical, and emotional commitment as the process can take up to two months, including the initial screening process, injections to stimulate egg production, and egg retrieval itself.

But if you’re healthy and fall within the correct age bracket, you can earn between $5,000 to $10,000 per cycle. Some women can earn even more.

Egg donation can be a significant emotional investment, as you’re essentially handing over your DNA to another family. But you’re also giving another woman the chance to become a mother, and that’s a wonderful thing.

Counseling is often mandatory as an egg donor and if you’re in a committed relationship, take the time to talk about this with your partner too.

27. Negotiate your bills

If you’re still saying “I need money desperately today”, and are looking to reduce your bills, you can negotiate them. While this isn’t guaranteed to save money, it might be worth calling about your phone bill, internet, and insurance, to see if there’s any way to save money.

The idea is to make sure you’re saving the maximum amount of cash by negotiating your bills to the lowest rate possible.

28. Pawn some items for cash

If you are able to, consider pawning some items as collateral for cash. To get them back, you’ll need to pay back the loan, but it can be helpful in certain circumstances. Pawn loans are typically short-term loans that allow you to get some cash quickly and pay the loan back in about 30 days.

These quick loans can help you get through a tough time, but they aren’t a good thing to rely on long-term as you can lose the items you pawned if you can’t pay the loan.

29. Be as frugal as possible

If you need money desperately, you are already on a tight budget. But even if you think you have no extra, it is worth taking a second look at your spending.

Think of creative ways you can spend less. For example, can you buy cheap but healthy foods and save $20 on your grocery budget? Or are you spending on anything unnecessary, such as a subscription, TV streaming service, etc?

You might be able to save an extra $50-$100 just by checking your expense habits. And every little bit counts. Even if you find that you can’t possibly spend any less, at least you’ll know that you’re being as frugal as possible and doing all you can for your financial situation.

30. Flip items to earn cash

If someone tells you that you need to spend money to make money, it isn’t always true. Sites such as Facebook Marketplace let users list items for sale at no upfront cost. All you need is a phone and an internet connection.

If you have any items of value around your house that you can clean up/paint/ etc., you can flip them. Then you can use the income to pay bills and also buy more inventory to flip. Sell the items online or to your friends and neighbors.

31. Do surveys

While this certainly won’t make you wealthy and can take up a good amount of time, participating in online surveys has been known to rake in extra dollars for participants.

There are many survey sites offering these services. However, not all are made equal and proper diligence needs to go into exploring your options.

A good option to consider is Swagbucks. Another one is Survey Junkie, which gives you points for surveys that you can convert into cash.

32. Ask for overtime at work

One of the easiest ways to remedy your “I need money desperately today” situation is to ask if you can work overtime. Sometimes we spend hours and hours trying to figure out the best way to make additional funds when the opportunity is staring us in the face.

If your job offers the opportunity to work extra shifts, you’re in a great position to earn more cash quickly. Some additional benefits of working overtime include the fact that you incur no additional costs to get to and from work.

You may also require no additional training, and you automatically contribute more to your retirement nest egg through your existing payment arrangements. Talk to your employer if you haven’t explored the opportunity yet.

33. Return unnecessary purchases

In this day of online shopping, it is not uncommon to buy something you think you love only to try it at home and realize that you actually don’t need it. Online shopping is notoriously the cause of a ton of overspending.

Many people stop here and accumulate heaps of unwanted items because of the hassle of processing a return. If you need cash today to pay bills, check the return policy on items you bought. Many stores have generous return policies you can benefit from.

34. Sell tech items you don’t need

If you have an old phone that you no longer use, a laptop, or some other device, this can be one of your best options when you’re desperately in need of money. It’s a great short-term solution when you need cash, and using a site like Decluttr is the perfect place to start.

You can also make a good amount of money. For example, if you have a newer model iPhone to sell, you could make hundreds of dollars from it!

Expert tip

If you find yourself in a position where you need money desperately it’s important to gain clarity before you take any actions.

Assess why you need the money, plan out the actions you will take and think positively. These simple steps can ensure you make the right decisions and resolve your situation as quickly as possible.

How to avoid being in a place where you find yourself saying, “I need money desperately!”

It could be time to think about your financial habits and make some changes. Thinking ahead by using these suggestions can help you to be prepared for the future.

Set up an emergency fund

Emergency funds exist for unexpected moments. When you face unexpected circumstances beyond your immediate control, having cash can be the difference between taking on additional debt and comfortably cruising through a tough patch in life.

An emergency fund is essentially a savings account exclusively dedicated to helping you through life’s emergency expenses.

An emergency could be medical bills, car repairs, or job loss. The size of the fund largely depends on your lifestyle choices, though many choose somewhere between three months and a year’s worth of expenses.

Get in the habit of building a sinking fund

If you have large one-time expenses coming up, the best way to prepare is by putting a sinking fund in place. Sinking funds are essentially extra cash you set aside for a specific one-time purpose. It can include setting aside part of your pay for a new couch, paying for a wedding, or buying a new car.

Sinking funds can be an excellent way to ensure that your budget remains balanced throughout the year without looking for additional income or taking on debt. Planning ahead by setting up a sinking fund is the best way to avoid being in desperate need of money.

Establish multiple streams of income

Income diversification can take place in so many ways – the choice is yours. Trade time for income by doing work such as house sitting or pet sitting. Invest in the stock market and grow your income through asset appreciation.

Focus on passive streams of income such as peer-to-peer lending. Invest in real estate by buying properties that will bring in rental income. You could even start a side hustle.

As you can see, there are a ton of options, and anyone at any income level can start earning more.

Wondering, “How can I get $1000 ASAP?”

So you’ve read our tips on what to do if you are desperate for cash but if you $1,000 asap which of these tips should you focus on? Well, one of the question ways to raise $1,000 fast is to consider selling items you own that you no longer need.

Items like electronics, jewelry, and designer pieces will bring the most cash. You can offload these items on platforms like Facebook Marketplace, eBay, Poshmark, and more. You could also consider asking your friends and family if they are interested as well.

Next, consider the skills you have and leverage them to raise quick cash. For instance, getting on TaskRabbit and doing freelance work on Fivver or Upwork can help you get quick gigs.

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Desperately need money? Act now to bring in some cash!

Hopefully, you’ve gone from feeling like “I need money desperately” to “I never knew there were so many ways to make money.” Remember, there are endless opportunities to make money, and you don’t need to give your power to a payday loan company.

The post I Need Money Desperately! 34 Realistic Ideas To Consider appeared first on Clever Girl Finance.

The post Need 100 Dollars Now? 8 Ideas That Don’t Involve Payday Loans appeared first on Clever Girl Finance.

The post Real Estate Investing For Beginners: Getting Started appeared first on Clever Girl Finance.

The post 19 Passive Income Ideas For Students appeared first on Clever Girl Finance.