Where To Put Your Money Instead of a Savings Account
Grow your wealth with passive income
Saving accounts don’t offer much in terms of returns. Right now I’m only getting 0.40% APY on mine.
What they do offer is security. It’s important to keep a safe amount of money in your savings account in case of emergencies or unexpected bills.
But once you’ve reached that safe amount, your money should be spread elsewhere. Adding to your savings account beyond what is needed isn’t helping your wealth grow. With what little amounts of interest saving accounts offer customers, your money loses purchasing power, especially with the inflation we are seeing today.
Here are some alternative locations to store your money that offer a better return.
Stock Market
The stock market is the best way for someone to dip their toe into other streams of income. I recommend to all my friends the need to invest.
Working and saving your money will not cut it. You need to have your money work for you.
Stocks can be daunting for some. The idea of losing your hard-earned money keeps people up at night. While there always will be market corrections and crashes, the market has recovered every time.
That’s why time in the market is better than timing the market.
The beauty of the stock market is transaction fees are now $0. You can slowly build up positions by dollar-cost averaging.
And you don’t need to be a genius to invest. If you buy a coffee from Starbucks every day, buy their stock. Stick with companies you know and believe in.
Cryptocurrency
The more I think of the cryptocurrency market, the less I like the term “cryptocurrency.” Yes, bitcoin was the first popular name and is the largest by market cap. But so many other coins do other things than just store value or make memes.
To someone unfamiliar with the crypto market, it can be even more daunting than the stock market. So many different coins you’ve never heard of and “experts” explaining their strong opinion about the good and bad of each.
The good thing about cryptocurrency is that there is a lot of material and guides recently written to help explain it all. And you don’t need to worry about all the different coins — similar to the stock market, it is usually best to focus on a few you believe in.
Real Estate
Real estate is another common way to build wealth. You often hear from millionaires that real estate is a great supplemental income source.
The median sale price of a house has skyrocketed, up 105% since 2001. Due to the pandemic, homeowners are witnessing one of the hottest real estate markets in recent history. This unfortunately means it's now tougher to buy homes than two years ago, because the price has gone up significantly.
Luckily, there are other options. Fundrise is an investment platform that allows users to put in money where they are pooled with other investors and buy real estate. Different tiers provide different options of choice, with the first several tiers limiting your choices between three different portfolios of real estate.
I mentioned in a previous article I was going to explore Fundrise, and I’m now invested with them. I don’t know nearly enough about real estate to make educated investments, so I enjoy the portfolios they construct for me. I basically provide my money and let them do all the work.
Farmland
Land is one of the most valuable resources. Its value is derived from its scarceness — we can’t simply make new land. Until we colonize Mars, were stuck with only Earth’s land, which has remained fairly constant the past thousand years, while the population has grown exponentially.
Bill Gates is the third richest person in the world. He’s also the largest farmland owner in the United States. This may change due to impending divorce, but between him and his wife, Melinda Gates, they will own hundreds of thousands of farm acreage.
If you want to be successful, find someone who has achieved the results you want and copy what they do — Tony Robbins
There are a million different ways to get wealthy, but it's easier to copy others than create your own way. Looking at Gate’s share of farmland signals the long-term value of farmland.
According to Forbes, for the past 47 years, US farmland has yielded returns of over 10%.
Luckily for us, we live in 2021, and while we likely can’t afford or run our own farm, we can easily invest in farmland. FarmTogether offers portfolios of farms you can invest in, yielding a healthy return.
There are likely other platforms to invest in farmland, but FarmTogether is the leading one I am most familiar with. I am not yet invested with them, but once I understand Fundrise and real estate better, farmland and FarmTogether will likely be my next investment area to conquer.
Start a side hustle
This option is more hands-on and not necessarily a “passive income” option — at least not at first.
A side business can be anything from writing on Medium, which can pay handsomely, to starting an actual company selling physical products. It can even be driving Uber in your spare time.
There are plenty of options in today’s society to consider. You’ll never know if you can be successful as your own boss until you try. Maybe we all have a million-dollar company inside of us, just waiting to be released.
All investments come with risk. The above references an opinion and is for information purposes only.
