This week’s newsletter has a top-secret tip on how to grow your money 🤫, a newsworthy story on stocks you’re going to want to check out 😉, and the savings account Taylor is currently swooning over 😍. Read more to get the priceless tea!
🤫Let’s fill you in on the secret
The idea of money growing is foreign to most people. The average American family has under $12,000 in savings, and many of them don’t even know how to manage their own finances. This means that many people are missing out on huge opportunities for growth that are available through compound interest and other financial strategies. In this newsletter, I’ll show you some simple ways to make your money grow!
Saving money is the best way to make your money grow because it’s the only way to earn interest. That’s why you should start saving as soon as possible. Here are some great things that you can do with your savings:
- Pay off debt
- Buy something you want, like a car or house
- Invest in stocks or mutual funds (a good way to diversify your portfolio)
Back up Your IRA With A Health Savings Account
This is a great way to make your money grow. An HSA is a tax-advantaged account that allows you to save money for future healthcare costs. This can be used in conjunction with an IRA in order to maximize your savings because you can use the funds from both accounts when it comes time for retirement.
You’ll need a high deductible health plan (HDHP) in order to be eligible for an HSA, but if this describes your current coverage or if you’re looking for new coverage, there are many options available today that offer HDHP plans at affordable prices.
Pay Yourself First
It may sound counterintuitive, but paying yourself first is actually one of the best ways to grow your money.
This means setting up an automatic transfer from your checking account to savings so that you have money in savings before you even receive your paycheck. You can also set a goal of saving a specific amount—like $2,000—and then automatically move that amount into a separate savings account every time you get paid until it’s reached. This has a few benefits: It helps prevent you from spending that money frivolously on things like new clothes or dinners out with friends; it keeps you disciplined by reminding you what’s important; and it gives you more financial freedom if an emergency arises (for example, if someone gets sick).
It’s important not to have credit card debt when paying yourself first because otherwise, this strategy won’t work as well because of interest charges and late fees
Stick to an emergency fund.
You should aim to save enough in your emergency fund to cover six months’ worth of expenses. That way, if you lose your job or something unexpected happens (like a car breaking down), you’ll have enough money to cover the gap without going into debt. The best way to do this is by saving automatically from each paycheck—you won’t miss what you don’t see.
If a financial emergency does arise and you need to withdraw from your fund, try not to take out more than five percent at once. If it’s truly urgent and unavoidable, there are ways around this rule depending on the situation (for instance, if there’s an emergency home repair). But the general guideline is that withdrawing too much money can put undue strain on your savings account or even leave it depleted altogether. You might also consider taking out smaller amounts over time rather than one big withdrawal; this will help spread out any negative effects with respect to interest earned on other investments in which those funds could have been invested instead of being withdrawn prematurely.
In addition (or alternatively), make sure that if you don’t already have an emergency fund set aside for yourself—and certainly if it isn’t large enough—then start building one now! An easy way is by saving up small amounts from each paycheck in a dedicated savings account until its balance reaches six months’ worth of expenses for things like rent/mortgage payment(s), utility bills (including heating oil), food shopping costs including groceries plus household supplies like soap/shampoo/laundry detergent, etc., transportation costs for getting around town every day as well as commuting back & forth between work every weekday morning & evening so that nothing gets left behind accidentally when leaving home very early in morning darkness before sunrise when most people sleep soundly through their alarm clocks ringing loudly while they dream happy dreams while others wake up feeling rested ready for another day ahead filled with exciting possibilities waiting just outside their front door where everyone lives happily ever after forevermore together
Understand the Effects of Inflation.
Inflation is the rise of prices over time. Inflation makes money worth less, so it makes sense that you want to avoid it if possible. The best way to do this is to try and make your money grow faster than inflation. But how?
Inflation works because people like things that are good or useful and they have more of these things in their lives when there’s more stuff being produced and sold with each passing year (lately, this has been called “the internet”). Larger supply means lower demand for each individual thing—hence higher prices all around due to what economists call “supply-and-demand”. The reverse also holds true: If less stuff is being produced and bought (as with a recession) then fewer goods are available on the market, which means that those same goods will be more expensive since there’s simply less supply compared with demand at any given time during an economic downturn!
You can see how this works now: When something becomes scarce (like oil) its price goes up because people need it but don’t want their own personal consumption levels affected too much by rising costs from outside forces like global weather patterns affecting crop yields worldwide—which could happen if someone decided he wanted too much land owned by others before selling them out themselves instead!
Invest in dividend-producing investments.
Dividend-producing investments are a great way to grow your money because they will pay you dividends, which are a share of the profits of the investment. These investments can be used for retirement or other areas that require liquidity such as paying off loans.
The more dividends you reinvest into buying more shares, the faster your money will grow.
Look at the power of compound interest.
You’ve probably heard the term “compound interest” before. It’s a fancy word that describes how your money grows over time. The concept is simple: You put your money into an investment vehicle and it makes money on its own. That money is then reinvested to earn even more profit, which in turn generates more profit down the line, and so on—hence the compound interest.
This can be very beneficial to your bottom line if done correctly, but it can also be dangerous if you’re not careful or don’t understand the basics of investing. So here’s what you need to know about compounding returns and how to make them work for you:
Your money can grow if you help it along.
The best way to help your money grow is simply through saving. If you save $10,000 and invest it in an index fund at the end of each year for thirty years and earn 8% per year on average, you’ll have over $1 million by the time you retire.
📰 In the news
Major U.S. equity indexes rose to start the week, Wall Street awaits earnings from the market’s biggest players.
The yield on the 10-year U.S. Treasury crossed above 4% for the first time since 2008, adding to a relentless climb last week that saw it briefly touch a 14-year high this month.
When the market is up, it means that the value of stocks has risen. This can be because of several factors, including increased demand, poor performance by rival companies, or an increase in the overall economy.
The stock market is often considered one of the best indicators of how well a country’s economy is doing and can also indicate how healthy businesses are within that country. If people feel confident about their financial future (or if they see opportunities for making money), then they’re likely to invest in stocks as a way to protect themselves against risk or make more money. In other words: when stocks are rising rapidly (i.e., when you’re making lots of money quickly), then people tend to feel more optimistic about their futures — which makes them more likely to spend now instead of later so as not miss out on any potential gains!
🧰 This Week in Taylor’s Toolkit
I am OBSESSED with the Yotta savings account! With economic concerns, financial experts recommend 6-9 months of expenses in an emergency vs the typical 3-6 months. You can bucket different savings like a specific emergency fund and if you’re like me, you’ll love the fact that it has automation! This means money can be directly transferred into different savings buckets you set up. And to make it even better this savings account earns more than the national average!
Link to sign up and get free tickets: https://members.withyotta.com/register?code=TAYLOR25
❓ Ask the Expert
This is a new section of the newsletter where you can ask me anything about finance, money, buying a house, personal finance tips, etc and I’ll be sure to help you out!
“What do I do if I have a lot of debt and cant afford to pay it off?”
If you have a lot of debt and can’t afford to pay it all off, there are three ways to handle the situation:
1. Make minimum payments on all your debts
2. Pay off the debt with the highest interest rate first
3. Consider consolidating your debts If you have multiple credit cards with small balances, it might make sense to consolidate them into one card with a lower interest rate and one payment each month. This will simplify your finances and ensure that you aren’t paying more in interest than necessary. You may want to also consider paying your debt off with the avalanche method or snowball method. The avalanche method is great if you have high-interest debt, like credit card debt. In this case, you should focus on paying off credit cards first, because they have the highest interest rates. The snowball method is best if you have low-interest debt, like student loans. However, if your student loans have higher interest rates than your credit cards and you can’t make payments on both at once, then go with the avalanche method instead.
Your finance friend,
Ask your question here!
📎Links we love!
- The Yotta savings account! https://members.withyotta.com/register?code=TAYLOR25
- Stock market news! shorturl.at/ioBR9
- My latest video! (will add upon posting)