You have a savings account ready for all your emergencies and expenses. You’re earning a sufficient salary to manage your finances, and you have debt, but only the right kind. What’s next?
Those who are looking into the FIRE movement might want to consider reinvesting. Here’s how you can do it:
Look into Franchising
The key to making the most of your money is investing early. Financial advisors recommend you leave your money in a high-interest account so that, over time, it will grow, but once it’s developed sufficiently, you can take some of the interest you earned and turn them into another source of income. If you learn how to start a business franchise and have the capital to get started, after a couple of years you will have a thriving business with good profit margins while the remainder of your savings is still earning dividends. The trick to making this work, of course, is to look at your savings and determine how much you can take out. Ideally, you’re taking out just a portion of the interest earned, so don’t do this until your principal has received a sufficient sum. Always grow your savings first.
Buy Rental Properties
Passive sources of income are great ways to prepare for early retirement. Someone in their thirties can quit their day job and live the life they want if they start investing in real estate early. One way to do it is to invest in one property, offer it for lease, and use that lease to pay for the mortgage. The mortgage you should be paying yourself can be used to invest in another rental property. You’ll have to be patient and watchful of the inflow of rental income, and reinvest them in improvements and new purchases that will grow your portfolio. Once you’re comfortably earning from several properties, you can sit back and watch them pay for themselves.
Build Your Brand
The influencers you know today are often tied to their platforms and channels in the beginning, but they usually branch out. Makeup gurus create their palettes. Influencers offer merch. This is just the beginning. Building your brand independent of your platform is a wise move considering platforms can change and collapse overnight. It happened to Vine, and it can happen again. Be bigger than your platform and reinvest some of the earnings of your business into building your brand. You’ll still have yourself, and if people know you to be a reliable entrepreneur, they have a better chance of supporting your latest ventures in the future.
Allocate Your Savings
One savings account with a considerable sum of money might feel tempting if you don’t have a clear purpose for it. Break it into chunks so that you will be more motivated to work on your goals. For instance, one account can be for your home deposit, another can be for a vacation, and yet another will be for emergencies. This way, when specific problems arise, you’ll know to use your emergency fund without taking anything out of your vacation fund and vice versa.
You’re already on the right track by having a savings account. But to reach the full potential of your money, think of reinvesting.