There are a million ways on how to invest money and get profit. One of the best investment vehicles is index funds. It’s how I personally acquired my wealth into the $500k net worth mark at just the age of 28. The additional boost to my income has been very helpful.
The first thing to keep in mind on investing is that it completely depends on your personal risk tolerance. Some investment vehicles are too volatile for an old person to consider but perfect for a young investor who has a decades long view.
I personally am in my late 20s so I can take as much risk as I could want and have decades of time to make it all back. Therefore, I don’t mind allocating a large portion of my net worth into equities, no matter how volatile the securities are.
My favorite equity to invest in is the index fund S&P 500. When I first started my career, I maxed out my 401k. And every dollar from my 401k went into the S&P 500, which allowed me to earn an average of 8 – 10% per year. Which is a large amount of investment returns.
It’s how I boosted my income just from my 9-5 income into something even more. Ever since Nixon took us off the gold standard in 1971, inflation has gone haywire. The cumulative Consumer Price Index reflects the results thereafter. Asset owners subsequently benefited.
That’s why it’s more important than ever before to know how to invest money and get profit. Our future depends on it.
How to Invest Money and Get Profit: 9 Ways to Profit
Below are 9 ways that I personally used on how to invest money and get profit. It’s how I got to a $500k net worth at the ripe age of 28 and have no plans to slow down anytime soon.
1) Index Funds
My favorite way to build wealth is to invest in index funds. All of my 401k, Roth IRA, and HSA money went into the S&P 500 since I started contributing to them. It’s no wonder why I have $300k+ in my retirement accounts, alone. How to invest money and get profit means index funds.
It’s the king of all the investment vehicles out there because of how passive it is. All you have to do is sign up for a brokerage account or a workplace sponsored retirement account and start contributing from day 1. No need to deal with tenants and the like.
Just need to click a few buttons and you are exposed to the largest companies in the world who are working tirelessly around the clock to help their shareholders get richer. And you can take advantage of their hard work yourself by investing in index funds that have exposure to these companies.
Although an annual 8 – 10% return doesn’t sound like a lot, it is a lot when we take into account the power of compound interest. Investing is one of the 10 benefits of saving money we can’t ignore.
2) How to Invest Money and Get Profit: Online Businesses
Many think of financial assets when they think about investing and not enough think about investing in businesses. Using money to acquire private equity from business owners who are looking to sell. The best businesses are online businesses such as a blog or an influencer brand.
The reason is because they have low overhead with little need for employees. Profit margins are the highest. How to invest money and get profit means exposing your money to online businesses that have the potential to tap into millions, if not billions of customers around the world.
My personal blog has potential exposure to billions of customers around the world and on top, I’m having a ton of fun with it too. The margins are the highest with online businesses because it just takes a lot of our sweat equity to build. Also, the business runs 24/7 without the need for employees.
Online businesses are an untapped investment potential that only a few know of and only a few can take advantage of.
3) High Yield Savings Accounts
In 2010 – 2021, it wasn’t worth our time to let money sit in high yield savings accounts. However, with the Fed Funds rate at 5 – 5.25% as of June 2023, banks started raising their interest rates on their savings accounts. And it’s risk free! PNC was offering 4.5% in select states.
Banks were no longer offering 0% interest rates on their savings accounts. How to invest money and get profit doesn’t have to involve risk. We can gain risk free returns on our money guaranteed without risking our money in the stock market or real estate.
I put in everything I had into high yield savings accounts and money market funds earning between 4 – 5% per year in risk free money. That was wild to me at the time. My $500k was earning anywhere between $20k – $25k per year, guaranteed!
With changing times comes changing strategies and it isn’t a bad idea to earn a guaranteed return on your money.
4) Real Estate
Real estate investing exploded in popularity especially in 2020 – 2021 boom. When interest rates were at record lows. It wouldn’t be a proper how to invest money and get profit guideline without mentioning real estate. Many investors love acquiring rental properties and letting tenants pay for all the expenses.
Not only do tenants pay for the housing expenses, there’s still excess money leftover for the real estate investor to enjoy. Real estate is the next part of my wealth building journey to get into. I personally don’t mind renting but if there was a good deal to put my money to work, I wouldn’t be opposed.
As long as the real estate property cash flows, any appreciation that comes from real estate is just icing on the cake. It’s one of the best ways to build wealth because people are always going to need a place to live. The prices are also stable throughout the decades.
Although the risk of loss is always there, real estate will always be a quality asset class to invest money in.
5) Education
Too many think they should invest $2k in the financial markets to get a return. At an average return of 8%, that’s an extra $160 per year that goes into their pocket. That’s not a good return on investment. The best return on investment is to invest the $2k into education that earns you an extra $10k/year.
That’s a 500% return right off the bat, and it lasts throughout the years. How to invest money and get profit doesn’t just have to be in financial assets. It can be in everlasting certificates that allows you to charge a premium over a worker without certificates.
Whether we want to admit it or not, our active income will be the majority of our wealth building tool in the first 5 – 10 years. Therefore, maximizing our 9-5 income is the way to go because it’s easier to get 100%+ returns with just one job switch and so forth.
We are in a knowledge economy where the most knowledgable commands the most salary.
6) Equipment
Investing in equipment that earns you more money is valuable. I personally took too long to realize this. Equipment such as a good phone, laptop, and car that saves you time and money is well worth the investment. How to invest money and get profit can apply to goods and services we purchase.
I bought a brand new iPhone and a MacBook pro in 2022 – 2023 and it’s made all the difference in the world for me. The processing speed is much faster to write blog posts with and to communicate with anyone else. The speed of information is valuable in this economy because knowledge is powerful.
There’s no point in saving as much money as we can every year because every good we buy depreciates every year from wear and tear. We have to make sure our equipment and upkeep is up to date so that we can compete against others in the world.
This is the next level of thinking that gets you to the next level. Saving the most amount of money isn’t always the wealth maximizing move.
7) How to Invest Money and Get Profit: Individual Stocks
This is one of the riskiest strategies out there. NVIDIA joined the trillion dollar club in 2023. Can you imagine their employees who have equity as a part of their compensation? How many millionaires were made in 2023, alone? A lot.
How to invest money and get profit involves taking on more risk than normal and investing in individual stocks is one way to go. I personally haven’t dabbled into individual company stocks as much but it can be quite lucrative.
Investing in individual companies can be more lucrative than investing in index funds because the risk is higher and therefore, the reward is higher if the investor is correct. While the broad S&P 500 index moved 13% by June 2023, there are companies who doubled in value in just six months.
Not a bad return in just six months.
8) Treasury Bills
40 years ago, 30 year treasury rates yielded 15%. A 15% risk free rate!! Equity investors try their hardest to gain an 8% return rate per year. And that’s WITH risk! How to invest money and get profit doesn’t have to involve risk. It can be in boring T-Bills that earns you guaranteed income per year.
Treasury bills have become more attractive recently as the Fed Funds rate increases. 30-year treasury bills briefly touched 4%+ yields. As the popular withdrawal guideline is a 4% withdrawal rate, a 4% risk free rate for the next 30 years isn’t a bad idea.
Although the United States government’s political system is highly unstable, the risk of default is near zero as they historically have never done so. Although it is a non-zero possibility it can still happen, the risk is much lower than buying equities.
As interest rates rise, the appeal of risk free rates rise as well.
9) Alternative Asset Classes such as Cryptocurrency
This is one of the least recommended out of every option but it is still a possibility. The reason is because alternative assets are highly volatile and most do not have a proven track record. Although cryptocurrency is decade+ old, that doesn’t mean the industry isn’t fraught with risk and fraud.
Even alternative asset classes such as art can be lucrative but more risky than stocks and real estate. How to invest money and get profit can be possible depending on your personal risk tolerance. I personally don’t recommend and don’t take this route myself to build wealth.
I personally like building wealth through proven track records and slowly but surely. However, that doesn’t mean that many haven’t gotten rich from cryptocurrencies, either. There are many new asset classes coming up every few years that investors can take advantage.
Buyers do need to be extremely careful before taking on the venture.
How to Invest Money and Get Profit: My Story
When I first graduated college, I wanted to build wealth as much as possible. Therefore, I researched how to invest money and get profit as much as possible. I eventually settled on index funds and invested the vast majority of my money into the S&P 500.
It’s what allowed me to get to a $500k net worth at just the age of 28. When there are others in their 60s who don’t even have $500k to talk about. Even after working multi-decades into their career. I’m not done, either.
I’m at the breakout point and if I just work 1 – 2 more years, it can grow into something truly magical.
I had an interest in building wealth and making money from a young age and nothing was going to slow me down. I diligently max out my 401k, Roth IRA, and HSA accounts every single year without fail. There’s too much at stake for me to ignore making sound financial decisions.
Building wealth is exactly like building a house. I knew that once my mindset and the foundation of the house was built, everything else was going to come into place. There’s nowhere to go but up from here. I hope that I’m at the cusp of something magical with compound interest.
The best part of compound interest is that it gets easier. While a 9-5 job may get harder as we move up the ranks and the pressure increases, that’s not the way it works with money. How to invest money and get profit starts with using good fundamental mindset to get ahead and achieve upward mobility.
That’s how to achieve success in life.
How to Invest Money and Get Profit is Financial Literacy
There’s a lack of financial literacy that’s running rampant in the entire United States today. It’s an epidemic. It’s a shame because the United States is the wealthiest and richest country in the entire world. And yet, many are struggling financially.
How to invest money and get profit starts with great financial literacy. After Nixon took us off the gold standard, financial literacy became a necessity. The system is now designed for the rich to get richer and the poor to get poorer. With rampant inflation, asset owners benefit while salaried employees don’t.
We can’t afford to not invest our money because that’s a surefire way that we’ll be left behind in the dust. No matter how high our income is, it won’t matter if our investments are not up to snuff. Investment income is what gets us upward mobility now.
It’s necessary to learn how to invest money and get profit because we can’t depend or rely on the government or pensions anymore for our retirement. Everything is up to us to get our financial situation right for ourselves and for our families.
Financial literacy is so easy to learn yet so few exhibit sound financially literate habits. It’s a tragedy. Once we actually feel and experience the magic of compound interest that works for us instead of against us, greatness happens.
Financial independence is the best feeling to have, especially when we earn it.
How to Invest Money and Get Profit: 9 Ways Shortlist
- Index funds
- How to invest money and get profit: online businesses
- High yield savings accounts
- Real estate
- Education
- Equipment
- How to invest money and get profit: individual stocks
- Treasury bills
- Alternative asset classes such as cryptocurrency
