This is a guest post from Taylor.
Needless to say investing is one of the most effective ways to build personal wealth. However whether you choose to invest in the stock market, real estate or any other form of investment. They all require capital.
Here are some actionable tips to help you save money to invest:
Pay down your debt
Debt can be a huge hurdle if you’re interested in saving money. Nowadays it’s almost impossible to avoid debt completely with credit cards being handed out like candy. Monthly interest can add up and make it nearly impossible to save money, let alone invest. For this reason, it’s important to pay off credit cards and all debts as soon as possible. Always pay your credit card balance in full and avoid making monthly payments.
Sell stuff you don’t need
As consumers, we all buy stuff we think we need that just ends up collecting dust. You’d be surprised how much money you have laying around your house or apartment. Simplify your life and sell any old items you don’t need. This can include old clothes, video games, electronics, furniture or any house hold items that hold second hand value. It’s very simple to sell these types of items online via websites such as eBay or Craigslist. Consider the items you don’t use that are lying around your house as money you could be investing.
Start a savings fund
Whether you decide to put away money in a piggy back or decide to open a savings account, you should be putting aside anywhere from 10-25% of every dollar you make. A good technique is to open a savings account at your bank and request that on every paycheck a certain percentage is automatically deposited into your savings account. This is usually quite easy to set up with most financial institutions.
Even saving as little as 5% of every dollar you make, over the course of a year or two would leave you with a hefty sum of cash to start investing.
Cut your expenses and live within your means
This might sound extremely basic but it is extremely important if you want to increase your wealth.
Your monthly income needs to greatly outweigh your monthly expenses. This is very basic yet rudimentary if you want to start investing more. Even somebody that makes a moderate wage can save money and invest over the long-term.
You would be surprised at how fast you can accumulate wealth if you live within your means and invest. If you we’re able to cut your daily expenses by just 10$ a day and invested that 10$ every day instead. At a 10% return on investment over 40 years, you would be left with over 1.6 million dollars.
Set goals and keep your eyes on the prize
What are you saving for? If your goal is to save money to invest more, constantly remind yourself of that goal on a daily basis. It’s very important to have a goal that you’re saving for. It makes saving money all that much easier.
Set a monetary savings goal, and a realistic timeline to achieve that goal based on your income vs your monthly expenses.