Money is a crucial part of the human experience, and it has been since before recorded history. Primarily, this means holding a job in order to make a living. However, there are more ways to provide for you and your family that work in tandem with your primary income, and these should be a priority early and often. Here are just a few examples of how you can make your money work for you.
Life Insurance
Life insurance is widely known for its primary function of providing the policy owner’s family with resources upon their departure. This is a valuable service that should be invested in as early as possible, just in case. However, there are additional benefits for the holder of an IRC 7702 plan, otherwise known as participating whole life insurance.
Participating whole life insurance is a life insurance policy that, as the name would suggest, lasts for a lifetime, unlike a term life insurance policy that only applies for a set amount of time. In addition, 7702 plans increase in value over time, making the final payout much larger than a term policy, and withdrawals can be made from the fund if the need arises. These factors make a 7702 plan a tremendously beneficial investment.
Retirement Funds
Retirement funds are a major boon to those who have them at their disposal. These funds are typically deposited into automatically, thereby reducing your monthly budget in exchange for security later in life. There are a variety of retirement fund options that each have their own specifications, but they all have the same broad strokes. Starting a retirement fund is often an automatic process, as well, depending on your occupation. If this doesn’t apply to your occupation, then must take certain steps to secure a retirement as early as possible for the maximum benefit. Like 7702 plans, they increase in value over time and can benefit you even prior to retirement if needed.
Stocks and Investments
The phrase “buy low, sell high” is something of a pop culture staple, but its widespread notoriety can render the concept abstract. This phrase is the underlying concept of the stock market, and it refers to buying stocks at a low price and selling them at a high price. In essence, this is how to profit from the stock market. The market itself is a collection of several publicly traded companies, and each stock represents a portion of the company’s ownership that can be bought and sold publicly. This benefits companies by providing funding and benefits the purchasing party by increasing their money, at least when the system works as intended. In order to profit, however, you’ll need to be savvy about business trends in order to buy stocks in a profitable company, and you’ll need patience in order to wait for the best moment to sell your stocks for the highest price and the most profit.
Investing in a company is similar on paper, but it works very differently. For one thing, investments are a private arrangement between a business and an investor rather than being open to the public. More importantly as it pertains to increasing your own income from, an investment is an agreement that, much like a loan, requires a return with a specified and agreed upon amount of interest. Because of the intimacy involved in investing, there is an advantage in terms of guaranteeing the profitability of the business in question, as investors often have the business pitched to them in order to root out lost causes prior to taking the risk.
There are a variety of ways to make your money work for you, from those mentioned above to good, old fashioned scrimping and saving. Therefore, a forward looking individual has the ability to radically improve their financial future, and this guide will prepare you to do just that, or at least give you a few places to start.