Investing can be an intimidating word to a lot of people because it carries an inherent risk; most people are afraid to take with their money. But there are ways to invest your money and build your wealth while keeping your risk low. Whether this is by using a broker to learn how to buy sanlam shares because they are a reliable investment or just putting your money into a savings account, there are various ways you can do this. The only problem is finding the money with which to invest, especially if you carry debt. And even if you were to find some extra money for that purpose, there’s no sense in working to earn a 7% return when you’re paying a higher percentage rate on your outstanding debt.
If you want to build your wealth by investing in the market, you have to pay off your debt first. And while that might seem like an impossible feat when you look at the numbers, bringing all your debt into one place simplifies the road to financial freedom.
Debt: The Enemy of Your Wealth
Using credit cards to make ends meet is sometimes necessary, especially when we face unprecedented times, but that way of life is not sustainable. Not only do you not have unlimited lines of credit, but there will also come the point where you must pay them off or drown under the weight of your debt. You can’t get ready for future circumstances or remove yourself from your current financial position without a plan to pay off your outstanding debt.
Instead of juggling different minimum payments and interest rates that have you treading water, consider consolidating your debt into one loan with one payment. Doing so can minimize financial confusion and get you to your goal.
It’s important to note that consolidating your debt doesn’t reduce your debt, at least in the short term. But you may save money over the long-term with a consistent interest rate and the motivation to keep chipping away at the total as you watch it go down.
Build a Rainy Day Fund
Once you have a clear path to pay off your debt, it’s time to think ahead and build a savings fund, so in times of trouble, you can draw upon that and stay out of debt. Keep in mind that you can build your rainy day fund faster when you pay down your credit cards. In the meantime, small amounts can add up, but it’s also important not to save too much while you still have outstanding liabilities.
Look at your budget and decide if you’ll benefit more by socking away a few extra dollars or whether that money will serve you better as an extra payment against your loans.
Investing in Your Future
If you find yourself with extra money to build a savings fund, you might want to use some of that cash to invest in the market. The time of coronavirus may bring an unstable market, but that’s really no different than any other time when investing. The key is to stick to companies you believe in, buy low, and stay in the market even when it’s volatile. The other important thing to keep in mind is diversification because that will minimize your losses overall.
For example, don’t put all your money into tech stocks because you’ll lose big if something happens in that market. You want to spread your investments to different markets and different companies so that when one goes down, the other may go up. Look for stable companies that have stood the test of time as well as companies whose products you use. If you’re new to the market, consider speaking to a financial advisor who can help you make the best choices for you.
Bring Your Dreams to Life
Investment opportunities come and go, and when they present themselves, you want to be ready. Georgetown Funding can help you consolidate and eliminate your debt so you’ll be in a position for those opportunities when they come around.