If you want a surefire way to win financially, these four techniques are the ticket.
- The economy has been turbulent in recent years and many people are worried about where to put their money.
- Here are four options you can’t go wrong with, including boosting your emergency savings.
Economic conditions have been a bit unusual in recent years, to say the least. There was a global pandemic that led to strict lockdowns, and now inflation is near a 40-year high and there are fears of a recession.
In the midst of these conditions, you may naturally not know what to do with your money. Luckily, there are four can’t-lose options, each of which would be a good thing to do with your stash money. Here is what they are.
1. Pay off the debt
Interest rates on floating rate debt rose as the Federal Reserve raised rates. The central bank has increased the rate at which banks borrow from each other overnight in order to fight inflation. When the Fed raises rates, credit becomes more expensive – and further rate hikes are expected.
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This means that if you have variable rate loans, such as credit cards, your financing costs have increased. That makes it a better time than ever to try to pay off high-interest consumer debt.
Of course, paying off credit card debt or other expensive loans is never a bad investment, since your return on investment (ROI) is equal to the interest saved. With some credit cards having interest rates of 27% or more, this is a very good return on investment.
2. Increase your emergency savings
Saving for emergencies is never a bad investment. It gives you the peace of mind of having money set aside for the future. It can also prevent financial disaster if you fall ill, your income is reduced, or a big surprise expense arises.
Since interest rates are on the rise right now, high-yield savings accounts are more rewarding to consumers who put money aside. You don’t want to save more than you need (about three to six months of living expenses for most people) because savings account returns are still not that impressive. But at least you’ll get a slightly higher return on your emergency cash.
3. Invest in stocks
Investing in stocks is another not-to-lose option if done correctly.
It may seem strange to say, because it is very possible that putting your money in the stock market could lead to losses if you do not do it correctly. But there are safer ways to invest that reduce your risk and maximize your returns – and it’s worth knowing and embracing them, because investing in stocks is one of the safest ways to create wealth. wealth.
Building a diversified portfolio and exposing yourself to an appropriate level of risk is the long-term way to go. If you don’t know how to do this by buying individual companies, look for a brokerage firm that offers many commission-free ETFs that give you exposure to the market as a whole.
4. Invest in yourself
Finally, consider investing in yourself. Finance guru Warren Buffett says it’s the best investment you can make, and he’s absolutely right. If you develop your skills, you can increase your earning potential and you will have those new referrals for life.
By making any of these four investments with your money, you should be setting yourself up for success, regardless of the future of the economy.