Everyone wants to multiply money without doing extra work. That is the dream! You would not need to manage any employees, start a business, or work overtime. All you would have to do is click a few buttons and then that’s it. It requires no additional work and no additional effort beyond it. However, there’s a way to multiply money the right way and the wrong way, let’s explore the right way to do so.
How do you do it? The answer is very simple. It’s investing. In a business, your employees work diligently to make money for you, which is great! However, managing employees can be a painful process. Therefore, for you to multiply money the right way is to let money be your employee.
Money is not just your employee of the month. It is the best employee you will ever have in your life. Money does not complain, ask for time off, nor will it ever disobey what you tell it to do. All you have to do is open an online brokerage account like Robinhood or Fidelity, deposit cash, then invest in a low-cost index fund over the long term.
Multiply Money the Right Way
TV shows such as Shark Tank demonstrates everyday working people striking deals with billionaires and multimillionaires to fulfill their American dream. However, you do not control your own success when starting and growing a business. So much of your success is based on things you don’t control. Customer behavior, supplier reliability, investor appetite, and more dictate your future. That does not sound right.
Additionally, not everyone can own their own business. There are so many hurdles and obstacles you have to jump through to do so. The great news is that you do not have to in order to get rich.
Now, don’t get me wrong. Side hustles are a completely different animal. Side hustles are wonderful and a great way to earn extra money. However, side hustles are completely different and separate from depending on profits from a business to be your primary source of money.
Do I own my own business? No. I have very little plans to own my own business in the near future either. Unsurprisingly, the media highlights the outlier successes of business owners that inspires everyday working people worldwide to be entrepreneurs. Which is great and all, but it is the riskiest and time consuming way to build wealth. Not just in money terms but in time and effort spent on building a business from scratch.
How I Leveraged Investing to My Advantage When I First Started Out
When I first graduated from college, I racked up about $40,000 to my name. It was from saving every penny I had from working 20+ hours a week, even during school days. I also worked internships every summer and limited spending on things I didn’t need. After graduating, I landed a banking job that paid a gross salary of $52,500. I was happy!
During my college days, I spent so much time obsessing over personal finance. I stumbled upon a site called the Penny Hoarder through one of their Facebook ads. Then I devoured their content. Next, I found many other personal finance blogs such as Financial Samurai who were giving out free advice. After reading the secrets practiced by the rich, I started to put those words to action.
I pursued low-cost index funds that had a history of returning 7% annual returns. Money that I would have much rather spent on a new car or a better apartment. Did I want to be riskier and put money into individual companies? I sure did! But I planned for the future and put most of my money into responsible investments.
I am glad sites like Robinhood exists where investing on the platform costs zero dollars.
It’s an Easy but Time Consuming Process
I will be honest, the first two years of investing were absolutely brutal and aggravating. I maxed out my 401k and HSA contributions which were $18,000 and $3,350 at the time. Meaning, I contributed 41% of my gross income right off the bat. My after-tax income was just enough so that I had food on the table. It was NEVER enough to where I had a large surplus for a rainy day.
Every bi-weekly paycheck, I saw a huge chunk of my pay not touch my bank account. Every bi-weekly period, I never saw my money multiply. Paycheck in, paycheck out it was frustrating to work 80+ hours and only have enough leftover to pay for food, insurance, rent, and such. I was getting frustrated and impatient. I even considered not maxing out any tax advantaged accounts. Gasp.
That’s what investing will do to you. While you are multiplying your money, it will get frustrating and at times you will resent your decision to delay gratification. What you need to do is to stick with it and believe in it for years. Then finally, one day, you will see everything pay off. A 1% daily gain that was only $100 back then will now be $1,000. A much more meaningful amount.
Investing is a great way to multiply your money and I encourage you to stick it out for at least two years. Your future self will thank you for it.
