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How to Make Money with Money

By: , dated November 22nd, 2013

It will come as no shock to most that the best way to make money is with money. The more money you have, the more additional money you can generate with that through investing and putting your money to work for you.

Getting Started

To get started you need money, how else are you going to make money with money if you donâ t have some to start with. Many people think to even get started in investing and putting money to work they need to have huge sums right away, that is not true. The key to getting started is to simply start putting money away every month, whatever you can afford. Putting away even as little as $100 or $200 a month can grow to large sums down the road.

Putting Your Money to Work

Many mutual funds have very low initial buy in amounts so sometimes with as little as $100 you can begin investing your money. Every month you can contribute what you have available (the $100 or $200 from above) and slowly start building up your funds. In a good month, put away more, in a bad month put away what you can (many funds allow you to contribute as little as $25 at a time).

Compound Interest

One of the most fundamental concepts of investing is the monumental benefits of compounding interest. Compound interest refers to the fact that every year you are earning interest not only on the principal amount that you contributed but also on the interest you earned the year before. The next year youâ re earning interest on the principle and two years worth of interest, and on and on and on. There are many online compound interest calculators for you to play with, but taking the $100 a month discussed above and considering that you could see it grow by as little as 5% a year after 40 years you would have $153K in the bank. If you push that out to 50 years you have $268K sitting in the bank. This quickly highlights the wonders of compound interest; you’ve only actually paid in $60K ($1,200 a year for 50 years) and have earned $208K in compounding interest. The sooner you can start contributing even a nominal sum to your investment fund the sooner you can start capitalizing on this investment opportunity. Everyone should try and set aside a small amount every month and make sure that they consider that a necessary expense and donâ t cut into it. In good months contribute more if you can, but try and set aside your minimal amount without fail.

Other Ways to Make Money with Money

There are a host of other opportunities to make money with money aside from simply setting money aside in a bank account or mutual fund and letting your funds slowly grow. If you have the financial resources you can consider other forms of investment, like setting up a brokerage fund and investing in stocks, or trading in money markets. The opportunities are boundless but once you have some money put aside you can quickly put it to work for you.

Copyrighted 2014. Content published with author's permission.

4 Responses to “How to Make Money with Money”

  1. matthewmurphy says:

    THANK YOU

  2. Jerome says:

    Thank you

  3. Grant says:

    thank you very much for this education. this is not taught in our school but you are educating us on it. give more of this and the world will be a better place.

  4. Prashant Rangnekar says:

    1. what are good investment avenues both for long term and short term for some one who is 5 years away from retirement.

    2. If I have to invest in real estate which is the best location in India and abroad.
    Does investing in commercial premises give better return or investing in residential premises.

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