You’re likely reading this because you’ve come to a point in your life where you want to make your money work for you. Saving for the future is important but it isn’t enough. Smart investing is just as significant. Investing helps you earn interest on your money. It grows your net worth and puts you in a different tax bracket (when done right). While all this is true, investing is still seen as scary or just too risky for some (especially us millennials). However, investing doesn’t have to be hard. The first step when approaching anything new is research and education. The same goes for investing. If you want to be a smart investor you have to learn from other smart investors and experts. So, congrats! You’ve taken the first step in conducting research on investing (which is how you landed on this article). Here, I’ll outline four simple ways you can become an investor and grow your income starting now. These can be implemented simultaneously (or one at a time). The key is to know what you’re doing before you dive in.
Start Your Own Business
As someone who has been an entrepreneur for over a decade, I see the benefits in starting your own business. Even if you have a full-time job, selling a product or service on the side can help you generate additional income starting now. That additional income could be invested into other business ventures or investment platforms. Before you start a business, I suggest reading books such as The Art of the Start 2.0 by Guy Kawasaki, Silicon Valley Venture Capitalist and Former Apple Executive and Shoe Dog by Phil Knight, Founder of Nike. These are two great books that will give you a full picture of how to start a business the right way (Art of the Start) and how to live passionately through your business (Shoe Dog). After reading these two books, I suggest consulting with a startup expert that specializing in business planning, financial planning and raising capital. You may need help deciding what type of business to start, how to operate the business, how to market the business and how to fund the business. QT Business Solutions is a great company that specializes in all these areas.
Partner Up with Friends, Family and Fools
Never heard of Friends, Family and Fools? Well this is the group of people that are likely to fund your business (especially if this is your first time starting one). These are also the people who are starting businesses you can invest in. Like Issa Rae said, everyone looks up (to network in business) but you should be looking across. Looking across means investing in the businesses started by your friends and family. Think about some of the well-known entrepreneurs like Bill Gates (Founder of Microsoft), Sergey Brin and Larry Page (Founders of Google) and Mark Zuckerberg (Founder of Facebook). All of them received startup capital from a friend and/or family member who believed in their idea.
Some people may shy away from going into business with family or friends. But as someone who’s done business with complete strangers, it’s nice to be able to work with people you already know and trust. That doesn’t mean it will be any less risky though. You still need to do your due diligence. I suggest consulting with an expert that specializes in business planning and valuations. Working with an expert will help you determine if the business is a viable idea.
This is exactly what I did when a childhood friend of mine decided to start the online parenting, travel, and fashion magazine and boutique, Zina Zarina (and asked me to be a partner). I met with Tina Williams at QT Business Solutions to discuss the viability of the business (and finding an offline location for the boutique). Consulting with an expert and brainstorming before implementing the business idea was very helpful for me and my friend.
Diversify Your Retirement Accounts
If you’re a W-2 employee, you probably already have some type of retirement account in place. The most popular retirement accounts for w-2 employees is the Traditional IRA, Roth IRA and 401k. However, if you plan on going into business for yourself, I suggest you consider opening a Simplified Employee Pension IRA (SEP) or 403(b) Plan. SEP plans are usually setup by for-profit business owners and 403(b) plans are for employees of certain tax-exempt organizations.
For example, I own a for-profit business and I have a SEP IRA plan. I’m also the Vice Chairwoman of a 501(c)(3) (a tax-exempt, non-profit organization) that will have employees in the near future. All of the employees of the non-profit (including myself) will have a 403(b) setup for retirement. Having different types of retirement accounts enables me to experience the tax incentives and benefits from them all.
If it makes sense for you, it’s something you should consider. To learn more, I suggest consulting with a licensed broker-dealer like Primerica Financial Services. Licensed broker-dealers can help you invest in mutual funds, stocks, bond and other investment vehicles. Primerica has licensed broker-dealer locations in your area. A Primerica broker-dealer in your state can help you setup a SEP or 403(b). Consult with your employer if you haven’t setup your 401k.
Try Your Hand at the Foreign Exchange Market
Online stock trading has become extremely popular. So has the foreign exchange market. Every other week I meet someone who wants to become a Forex trader. Since I work in the finance industry, I always get asked for suggestions on the best Forex brokers. First off, investing in the stock market and trading Forex is very risky. Just as risky as starting a business. However, don’t let that discourage you. Just about all the online stock and Forex trading sites allow you to create practice accounts so you can study and learn before investing your money into the real thing. I suggest practicing and studying the market for at least 3 months first. Many online Forex brokerages let you start with a small deposit (as low as $250). That small deposit can turn into big profits!
