Many people get stuck in the rut of thinking that funding retirement means squirreling money away in a 401(k). It’s time to ditch the herd mentality and start thinking creatively.
Following are some ideas to help you ponder how to put existing money and resources to work for you to create more money:
- Apply Savings to Debt. For example, instead of depositing emotional/emergency money into a savings account, park it into a HELOC (home-equity line of credit). Consult with Alan or Peter on the power of this idea: (801) 292-1099.
- Turn a Non-producing (or Low-producing) Asset Into a Producing Asset. One example of this is money that you have deposited into an IRA or other qualified self-directed retirement fund. The money may be sitting there earning a modest amount or it may even be losing money, so it’s probably not wise to put all your long-term savings into such programs. These are “stagnant” types of long-term programs. Investing some of your money into real estate or
equipment that can be rented or used over and over again is a better way to get your assets to produce more money for you. - Spread Out Your Investments. Consider various investment options based on how these options are taxed, their risk level, capital appreciation, and so forth. Use a software that allows you to play “what if” scenarios with your money, such as the Money Mastery Master Plan software available to registered Money Mastery members (www.moneymastery.com).
- Increase Your Return on Investments: While it’s important for people with large debt loads and little savings to be quite conservative early on with their investment habits, as they get their spending and borrowing under control and begin to watch their wealth accumulate, it may not be advisable for them to leave their money in low-return investment programs like passbook savings and certificates of deposit. You should consider what savings need to be converted to higher yielding investment plans. Use all means to accelerate down bad debt especially when investments are yielding less than the cost of debt.
- Examine the Ways You Can Make Your Current Investments More Valuable. Can you convert real estate space into rental income property? Do you need to study the market and trade investments where more lucrative prospects lie? Can you use the equity in your current real estate holdings to purchase additional properties to begin a “rolling” real estate investment?
- Examine How You Can Turn an Idea, Hobby, Piece of Property, Skill, Equipment, Knowledge, or Other Untapped Resource Into a Money Making Machine. Many people have great ideas, but they don’t necessarily develop them into a small business that can be used to generate more income. Do you have equipment that
others need and you could lease out? Do you own a large piece of property that could be subdivided or rented out? Do you have a particular skill or knowledge base (such as biochemistry or physics, writing talent, farming, mechanics, computer knowledge, etc.) that you could use to generate new income or provide a service to others for which they are willing to pay? - Consider Using Lender Monies to Purchase Real Estate to Produce Positive Cash Flow. Invest in revenue-producing property by using bank loans (sometimes up to 100 percent).
- Apply Tax Refund to Debt. Ear-mark your tax refund at the beginning of the year for paying off debt, or adjust W-4 withholding so you get less of a return and use the difference to apply to debt.
- Establish a Business Line of Credit. This allows you to stock more inventory, buy more product, increase advertising in your business, etc.
- Consolidate Credit Card Debt and/or Vehicle Debt Into a HELOC. This will allow you to lower interest rates and provide the possibility of converting the loan into tax-deductible interest.
- Hard-money Lending. Loan money to individuals or businesses on a secure basis for a short term at high-interest rates and fees.
- Real Estate Syndication. Consider teaming up with others to purchase and manage a specific real estate project. Caution: This option is not recommended without spending and debt plans.
Let your imagination run wild, but get thinking. There’s a whole world of resource, skills, equipment, and knowledge at your fingertips ready to be utilized if you begin thinking more like the banks and lending institutions and less like a person who has been bound by unbridled spending and mountains of debt.
