8 Creative Ways to Make Your Nest Egg Grow
Updated on Jan 14 2019
Financial Management takes discipline and patience, but did you know that you can also grow your nest egg with some financial creativity? Here are seven creative ways to make your money grow, in addition to your regular financial planning.
January is Creativity Awareness Month, so we’ve compiled some creative ways to make your nest egg grow since smart money-management is more than just discipline and time.
1. Take Advantage of Technology
The 21st century offers a myriad of opportunities for managing financial information and accounts through automation. In fact, today’s technology offers a seamless way to automatically transfer and deposit into your savings and investment accounts, without the time and hassle of days past. All you have to do is set up the deposits into the designated accounts, either yourself or with the help of an expert finance advisor. Before you know it, $50 and $100 savings increments add up to help cushion your retirement savings. (Compound interest can work financial miracles over time, so it’s important to start sooner rather than later!).
2. Start a Business
Wealthy investors often either own their own business or supplement their regular income with side-business income. According to Spectrem Group, business owners account for six percent of seven-figure households, which is triple that of doctors or lawyers.
Starting a business requires hard work and discipline, but over time it can pay-off financially; especially if you are able to eventually sell the business for a substantial profit. It helps to set goals and to not grow too fast. If it’s a side-business, supplementing your regular income with extra income each month offers more opportunity for investing.
3. Forecast Trends
Investing where there are trends for growth can help you multiply your money faster. It makes sense; stocks of public interest that are relevant in the marketplace do better. Educating yourself, talking to a professional financial advisor and using your brain to figure out which investments might be successful can help you increase your nest egg.
Sustainable investments have been an area of interest for some investors. Local investments offer another opportunity to possibly help your community thrive will growing your assets. While these investments can be risky, there is also opportunity. Your investment time horizon will help inform these kinds of investments.
America’s echo boom, or the ratio of the country’s middle-aged to young investors is rising, so the stock market is seeing an uptick in activity as these people are starting to save for retirement. So, researching where to invest by forecasting trends for these generations, with the help of a professional finance advisor, can help you grow your money.
4. Optimize Your Portfolio and Think About Taxes
Your investment portfolio should have a certain ‘set it and forget it’ philosophy, but you also have to be strategic with where you are in life and optimize your portfolio, taxes and withdrawal timing accordingly. Building a better portfolio with safeguards in place with an informed advisor can help you reach your goals.
A study from MIT had some entrepreneurs using trial and error methods of investing while others were educated about best practices. The entrepreneurs who were more informed tended to be more successful.
Also, being savvy about taxes can help you save substantially on your investments. For example, the capital gains rate for selling a long-term investment if your ordinary income is below $73,800 for couples and $36,900 for singles is zero percent. Congress recently extended this tax-saving opportunity for those in lower income-tax brackets, but many people are not informed and are missing the savings opportunity.
Withdrawing money at the wrong times can also be very costly. Getting informed on tax-saving opportunities for your retirement investments and other investments will help you save for your nest egg.
5. Make Credit Cards Work for You
As a general rule, you want to stay away from using credit cards regularly and not paying off balances in full each month. If you are using them as an avenue to save on interest rate to pay off balances sooner, get rewards and free airline travel, they may make sense.
What’s important is that you do your research, read the fine print and be smart about when to use credit cards creatively to help your bottom line (and when to just say ‘no’ to impulse credit card purchases!). Avoid annual fees if you can and weigh the pros and cons of each credit card.
6. Assess Your Mortgage
Typically, your mortgage is where the majority of your income goes each month, so finding ways to remodel your mortgage in a more cost-effective manner is smart. Whether it’s paying an extra mortgage payment each year or refinancing when the rates are low, you may be able to save in total costs over the life of the loan.
When selling or downsizing, do your best to be patient to time for a seller’s market, if possible. When buying, a general real estate rule is to buy the smallest house in the best neighborhood you can afford.
Being educated about the costs and timing associated with any mortgage change, depending on the housing market, is crucial to actually saving on your mortgage. Consult a professional to help you assess what may be right for your unique needs.
7. Invest in Your Own Skills
You are never too old to invest in yourself. You have to be practical about loans and financial commitments, but consider classes or certifications to boost your skills to bring you to the next level in your career. Whether it’s an Excel, public speaking, foreign language, specialty or sales course, there are ways to either get a promotion at your current job or find a new, higher-paying position with a new employer.
Sometimes there are even industry learning opportunities that are subsidized by your employer. Do your research to discover how you can be more marketable to increase your earnings.
8. Consult an Expert Finance Advisor
An expert in finance can help you not only gain control of your finances, but also help give you peace of mind. A fiduciary financial advisor is legally obligated to put your interests before his or her own and can help answer your saving and investment questions with a solid financial strategy catered to your unique needs.
Being able to identify problem areas or missed opportunities is educational for you and also helps you grown your nest egg. The idea of “teach a man to fish and he can eat for a lifetime” is reflective of finding an advisor whom you can trust to help you set up a retirement portfolio for your investment needs. After all, you can only get creative with your finances if you have the ‘big-picture’ snapshot of your finances, needs and goals.
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