You have just taken a look at your savings account and you’re determined that you have a nice pot of money that you now want to turn into steady income. If you’re a financial neophyte, the primary question to ask is: how do I embark upon such a thing in the first place?
A few years ago, JP Morgan released a report and emphatically averred that individuals can’t transform savings into income. It was a negative study that concluded it’s very difficult for those on the cusp of retirement to depend on their lifetime savings to keep them afloat during their golden years.
Despite the doom and gloom continually espoused by the naysayers, there are plenty of opportunities for a saver to earn even more income from those savings. From low risk investments to high risk vehicles, a person does have to be prepared to lose out, whether it’s money or time. Risk does have its rewards.
With a rising cost of living, the unreliable pension system and the record low interest rates perpetrated by central banks worldwide, it’s important more than ever to discover additional streams of income. Here are seven ways to turn your savings into an income.
1. Mutual Funds & Stocks
A mutual fund is an investment vehicle with a conglomerate of stocks. Most financial institutions offer various sectors for mutual funds – resource, healthcare, entertainment, international dividend – and it helps those who aren’t so financially savvy and can’t spend an entire day monitoring stocks. Depending on the mutual fund, it can offer a reliable source of monthly income.
Stocks can also be a goldmine for certain investors, particularly today as the Federal Reserve stimulus continues to funnel throughout stock markets. If you know what to do and you pay close attention to the markets, then you can definitely earn a decent living through trading.
2. P2P Lending
The Internet has enhanced the peer-to-peer market: ride-sharing, room-sharing, and now money-lending. The P2P lending industry can allow consumers to lend money to people who need it for rent, a business or education. It’s a lucrative alternative to the conventional lending business model. You can lend out as much as $10,000 and earn a five percent interest rate, if you wish.
3. Launch a Blog
Do you enjoy writing? Are you on the Internet most of the day? Are you interested in a specific topic? Well, why not launch a blog? Although not every single person should establish a blog, it’s a good investment for someone who understands search engine optimization, web design, content writing, and social media. You shouldn’t write about something that has been beaten to death, but if you have a strong acumen on a subject that doesn’t get a lot of coverage, then you could earn a nice living from blogging.
4. Real Estate
Here we go from a very low risk investment to a high risk investment in real estate. There are two ways to make money from real estate: property development and real estate investment trusts (REITs). The former takes a lot of effort, money and energy, while the latter is a lot simpler to put your money in. Both can generate big bucks, but at the same time it can lead to financial devastation.
5. Coins, Stamps & Other Collectibles
Since the economic collapse a few years ago, many people have begun to be interested in gold and silver coins. Stamps, art, antiques and other collectibles have also benefitted, because some investors are wary of financial institutions and governments, and now prefer to own real, tangible assets. If you understand the history and the process, then you can acquire such items and wait for them to appreciate in value. It’s also a very interesting topic.
6. Small Business Investment
Have you noticed an opportunity in a certain market? Establishing a small business, or being a partner in a small business, could serve as an additional revenue stream for you. Similar to the real estate market, investing in a company can undoubtedly come with a lot of risk. Perform your due diligence, do your research, speak with seasoned business professionals, and proceed with caution. You may have a great idea or a business that is an overnight sensation.
7. Human Capital
Finally, the simplest way to invest is to invest in yourself. (No, this isn’t an after-school special). Investing in one’s human capital is one of the best ways to earn a greater income. Whether it’s taking a class in coding, obtaining a certificate in social media marketing or teaching yourself financial markets, enhancing your human capital can lead to a greater abundance of wealth.
See also: How to Invest Your Salary
Indeed, there are many avenues people can take when they have a nice sum of wealth in their bank account or safe. Unfortunately, because of inflation and rampant price inflation, it isn’t enough to just maintain wealth or to buy bonds. You have to look at investment opportunities to expand upon this amount of cash. Be sure to remember that you won’t just be adding money to your wallet, but having fun, too.