Last year a new study released news that just 29% of Americans have $1,000 or more in a savings account. If you are one of those without $1,000 saved up, this article is not for you. This is for those that have been putting money away into their savings account for awhile now, and are wondering what to do with all of that money saved up. There comes a point where a rainy day fund becomes a rainy week fund becomes a rainy year fund. At that point there are likely some better ways to utilize your money. Here are a few.
The idea of owning real estate scares far too many people. They imagine buying an old house and renting to awful tenants who trash the house, pay their rent late, then disappear. They picture themselves trying to fix an old broken toilet that for some reason is shooting water out of it’s connecting pipes, or getting fried when they try to figure out why a light won’t come on. Then they stop thinking about real estate because the idea just seems ludicrous.
Investing in real estate just doesn’t have to be that hard however. There are a number of different ways to invest in real estate, and a good number of them actually don’t even involve owning a piece of property. If owning property scares you there are other ways to invest in the real estate market. One personal favorite is FundRise, an app that allows you to share in on large real estate deals, putting in as little as $1,000 for a large property. It is almost like buying a timeshare with a large group of people with a plan to sell for equity in a few years.
If the idea of owning real estate properties actually does appeal to you, but you don’t feel like you have enough, make enough, or know enough then there is a solution for you as well. The internet is a great place to learn how to get started in real estate. There are tons of resources and questions that have already been asked online. Not only that, but there are dozens of government and community resources available to help first time buyers get affordable property. FHA loans can be an incredible benefit if you don’t make a lot, but have enough to put a small downpayment on a home, duplex, or triplex.
Just like with real estate, the stock market can be a scary place. However, just like with real estate if the idea of the stock market scares you, you don’t have to find your own companies to invest in or know massive amounts of accounting information. There are index funds that allow you to invest in the stock market as a whole and require little to no work after the initial investment. This is a very safe bet and the market has had a great average return over the past 90 years, especially when compared to savings accounts.
If instead you want to roll up your sleeves and do your own investing their is opportunities for you as well. There are plenty of resources online to teach someone with little to no knowledge of investing how to get started. The key to investing today is learning how to read stock charts. If you can understand charts then you will be able to find good companies through research, and know when it is a good time to buy, and even better, a good time to sell.
If neither of the first two options appeal to you try investing in a small business! There are hundreds of startups that spring up every day and need capital. A lot of them have great ideas and a lot of potential, but need capital to get things off the ground. If you are really willing to do your research and invest in a little riskier options, you can really enjoy building relationships that come through investing in small businesses. There are websites available that can help you find small businesses, or you can often find them via Kickstarter as they launch their first product.
The takeaway is not to let your money sit idly in a savings account making less many than inflation increases. It is wise to have a rainy day fund, but if your rainy day fund has gotten too large it is time to start looking at money-making techniques. Very few millionaires got where they are today by putting everything in a savings account.