- February 9, 2021
Where Should You Put Your Income?
Most people don’t start a business expecting to make much of an income early on in the venture. They focus on making the business as robust as possible, and take the time to slowly build the company and number of customers up. At some point, however, you’ll hope that you make a profit and may decide to draw some money out as part of a salary or just simply have a surplus of cash.
Rather than having this money just sitting there, it’s a good idea to look at putting the money to work in one way or another. In this blog, we’ll look at some of the best places to put your income.
Back Into Your Business
You can use the money to shore up your business. In your business plan, you’ll have allocated funds to the areas that positively need to have some cash, but they’re not the only things that will benefit your company. They’re just the essential areas to invest money. If you have some surplus money, you can use it to invest in aspects of your company that may not have been the priority when funds were low but which you know will be useful. For example, you might decide to transform your office so that it’s more in line with your branding or bring onboard a third-party company that specialises in areas of business that you don’t have the skills/time to do well.
The better you are, the better your company will be. When you first started your venture, you’ll have had enough education and experience needed to get the business off the ground. But that might not be enough to see you through some of the more challenging aspects of running a company that’ll present themselves once you achieve more success. For example, you might know your product/service inside out, but do you know how to manage a team of staff? If the answer is no, then you could take a management course that’ll give you the skills you need. Many entrepreneurs mistakenly believe that they’re the finished article when they start their company, but that’s never the case. Some things you’ll learn on the job; others, you’ll need to seek out the knowledge you need from elsewhere.
In the Stock Market
If you’re looking to build a long-term income, then the best options are through the stock market and real estate (which we’ll discuss later). If you have no experience in the stock market, then it can seem a little daunting – many newbies believe it’s akin to betting your income on roulette. In practice, it’s not like that (or shouldn’t be). There are plenty of ways to safely invest your money in the stock market (though remember that there’s always a risk). You won’t become an overnight millionaire, but rather, you’ll create a platform that’ll key your money in a secure place and which will bring a handsome reward. If you’re going to go your own way when you’re investing, then it’s a good idea to do as much reading as you can. There are a tonne of useful blogs, websites, YouTube channels and more that can put you on the right path.
If you don’t feel confident investing in the stock market, or you don’t have the time to dedicate to learning the right methods and so forth, then you can look at using a robo advisor. This is pretty hands off, and, as such, you can only expect modest returns on your investment – but there’ll still be a return coming your way.
One business trick is to look at the companies that have had exceptional success and then look at copying their tactics. You can’t always do this, of course, but you’ll find that there are plenty of useful lessons to be learned from the people at the top. And the number of high-level companies and people invest in cryptocurrency means it’s worth paying attention to. Tesla just invested $1.5 billion in Bitcoin, for instance. Crypto is risky, and it’s extra important that you’re doing significant research before committing your money, but if you’re a believer, then it could prove a suitable place to put some extra cash.
Investing in Real Estate
Of course, the problem with cryptocurrency is that, at the moment, it exists only as an idea. That means that it has extrinsic value, rather than intrinsic value; when people start using crypto as a method of payment, rather than just as an investment, then it’ll have intrinsic value. One thing that has always had, and will always have, intrinsic value is real estate. Until we all leave earth and move to mars, people will always need people to live, work, and run their businesses. So if you’re looking for a historically stable investment, then take a look at real estate investing. Real estate is broad, and can involve investing in properties, apartment complexes, office space, or commercial premises, but if you get it right, you’ll find that you’ve made an investment that can bring a handsome return.
If you’re looking for a conservative way to invest your money, then you could look at government bonds. You will not get rich through bonds, but it’s highly likely that you’ll get your money back with a little extra thrown on top. Why’s it so stable? Because it’s tied to a country. If you invest in United States bonds, for example, then you can be reasonably confident – something would have to go terribly wrong for those bonds to become worthless. There can also be tax incentives to investing in government bonds, too. Many investors have some government bonds as part of their portfolio because they’re so stable.
Don’t keep your money just sitting there! Whether it’s investing in your business, investing in yourself, or putting the cash in places where it will steadily develop over time, it’s a smart way to ensure that your money is put to work.