Part 8: Start Investing

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Investing some money in the stock market can be a great way to get your finances working for you long term, as you work towards building a portfolio to supply you without another income stream. If you’ve never invested before, this might sound like a scary new thing to learn, but these days you can invest in low-risk investments with even just small amounts of money, so as long as you only put in money you don’t need (and not your entire savings), investing MIGHT be an adequate way to build up your assets and net worth further.

Part 8: Start Investing

Generally speaking, there are two types of investments that make up most of the stock market: stocks and bonds. Stocks or shares represent a small part of the company. Whoever owns shares of a company essentially owns part of that company. Shares give shareholders dividend payments at specific intervals (for example yearly or biannually) based on profit results.

Bonds on the contrary represent loans taken out by a company. If you buy a bond you essentially lend money to a company. Throughout the lifespan of the bond you will be paid interest and at the end of it you will be returned the original amount of money that the bond was issued for.

Both stocks and bonds might with time go up in value, meaning that if you decided to sell these assets you could make a bit of money. Unfortunately the opposite might also be the case: they could go down in value in which case if you had to sell them after their value has gone down, you would lose money.

When it comes to investing your money in the market, there are three main ways of doing so:

  • You can pick and choose your own stocks and bonds to invest in. Handpicking your own investments gives you a lot of flexibility and means you’re in (almost) complete control of the process: which company to invest in, when to buy and when to sell. It does of course mean you need some knowledge as to how to make these decisions.
  • A second option is to invest in mutual funds where a fund manager makes all of those decisions for you. Mutual funds often have high associated costs and fees however and therefore aren’t always the most efficient way to make money on the market.
  • A third way to invest is via index funds which is a way to proportionally invest in all the companies of a specific index. This type of investing doesn’t require you to have specific knowledge and often has very low costs. 

None of the above options are without risk: investments can always go down in value and whilst you can make money on the stock market, it is just as easy to lose money.  That said, as long as you take calculated risks and invest in relatively safe investments, putting money into the market can be good opportunity to. build your wealth.

It’s worth finding some time today to check out the investing options that might be available to you, what their minimum monthly required contributions are and what their fees or costs are. This gives you a much better idea of what investing might look like to you.

Lastly, before ending this quick intro into investing, let’s look at an investing guideline that has become known as the 4% rule. This rule is based on extensive research done by Trinity University where researchers found that if you have an investment portfolio of a certain value, and take out no more than 4% annually, your portfolio will nearly always sustain itself due to market increases, meaning the increase in value balances out the money you take out. Practically speaking this means that if your investments are worth $60,000, you can take out $2.400 each year without your portfolio going down in value. Or if you build a portfolio worth $500,000, you can take out $20,000 each year! That might even be enough to live off without needing any further income? Unfortunately, whilst the 4% rule is a great initial guideline, it doesn’t always hold up, especially not in times of a recession, so before you think all you need to do is invest and then live off the proceeds, you’ll likely need a contingency plan for when there is an economic downfall scenario.

Investing can be a great way to build and maintain your wealth, but it is also complex and there can be great risks involved. This blogpost is just an introduction to the topic. Before you go off and invest all of your savings, please make sure to educate yourself further with blogs, books and / or podcasts on this so that you don’t take any unnecessary and irresponsible risks. 

The above is an adaptation of part 8 of the 10 parts in the guidebook to Financial Independence100 Steps to Financial Independence: The Definitive Roadmap to Achieving Your Financial Dreams where you can find more details as well as action plans and guidelines to each of the 10 parts. Available in both ebook and paperback format!

Get your FREE sample of the 100 Steps to Financial Independence Book here

Coming up next: Part 9 of the Journey to Financial Independence!

Part 7: Plan Your Retirement

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One of the most important, yet often ignored, parts of financial independence, is planning your retirement. It’s often difficult to know where to start, what your options are and what you should be thinking about. But without doing so, how can you feel comfortable about your future? How are you going to know what your retirement will look like? How can you be sure you can even provide for yourself when you stop working? Part 7 of the Financial Independence in 10 bite-sized parts will walk you through the essentials of this important part of financial planning.

Part 7: Plan your Retirement

Retirement provisions vary greatly from one country to the next so with this part, more than any other, you want to make sure you check the details of how the topics described below work in the country or state you live. In most cases, people have access to one or more of the following three ways to save up for your retirement:

Social security or state pensions are generally provided by the state after a certain amount of active working years. Both employees and employers might contribute to social security payments and thereby fund the retirement payments made to those who have reached the state retirement age. Social security conditions and pay outs vary greatly between countries. Find out what the regulations are regarding this type of retirement income to get a rough idea of how much you might be entitled to by the time you retire. 

A second way to save up an income during retirement is by participating in a workplace retirement fund via your employer. As an employee you can make regular contributions that in some case employers might even match, meaning they add in a certain amount of money up to a certain maximum too. As workplace retirement funds are often offered by an employer, it makes it easy and convenient to participate in. Examples of this type of retirement funding include 401(k) and (Roth) IRA accounts in the US. Contact your HR department or arrange a meeting with the person in charge of retirement funds in your company to find out what your options are and -if you have been participating- how much you currently have available in your retirement account. 

If either of the above isn’t available to you or is not sufficient for what you expect your retirement needs might look like, it is often a good idea to look into a private retirement fund as well. There are often many options available with banks, insurance companies or specialised retirement fund companies. Of course this requires a little more investigation and preparation work in order to find one but also gives you more flexibility to find one that better suits the needs you expect to have. If you already have a private pension fund, check out the conditions and contributions you have made to again get an idea of how much you would roughly have available upon retirement. If you haven’t got a private fund, have a look around online for some options to get an idea of what might suit you best.

Lastly the most important part is to act upon your new knowledge and plan your retirement. Try and estimate as best as you can how much money you’ll need upon retirement, which might be a lot more than currently (for example if you plan to travel a lot more) or a lot less (for example if your mortgage will have been paid off by then). Now total the predicted amount of the various retirement funds you might be entitled to (bear in mind some – especially social security / state pensions – might go through significant changes if your retirement is still a few decade away). If you have any passive income streams that you might further be receiving upon retirement (rent, dividends, royalties) then again predict how much you would get from these. Then make a plan on how to bridge the gap between what you need and what you predict you’ll receive from the retirement funds and other income streams: open a private pension plan, increase workplace retirement fund contributions etc. 

The above is an adaptation of part 7 of the 10 parts in the guidebook to Financial Independence100 Steps to Financial Independence: The Definitive Roadmap to Achieving Your Financial Dreams where you can find more details as well as action plans and guidelines to each of the 10 parts. Available in both ebook and paperback format!

Get your FREE sample of the 100 Steps to Financial Independence Book here

Coming up next: Part 8 of the Journey to Financial Independence!

Part 6: Increase Your Income

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Many people see their income as something fixed that they have little to no control over – apart from the rare moments of salary negotiations such as when starting a new job or during performance reviews. Part 6 of the 10 Parts to Financial Independence will look at how you can influence your earnings in many more ways than you might think.

Part 6: Increase Your Income

We commonly think of our income as whatever we get from our jobs. But that’s only one way to earn money, when there are actually seven different types of income streams! 

These seven different ways to generate an income are described below, along with some prompting questions and ideas to help you decide whether you can and might want to develop one of these streams further to increase your income. 

The seven income streams are:

  • Earned income from a job – money you earn through your work for a company. This income stream is generally based on getting paid for your time. 
    • To increase your income, can you increase the likelihood of a bonus by making yourself more indispensable? Can you up your earnings by doing another course or pursuing a promotion? Is it time for a new / better paid job? 
  • Profit – money you make by selling products or services as part of a business activity at a higher price than the cost price.
    • Can you start a side hustle selling things you make or offering your services? Think about an Etsy shop, tutoring or a specialised IT service.
  • Interest income – Money you get from lending money to others, such as to a bank, the government or through investments.
    • Can you increase your interest income by increasing your savings, your investment in bonds or your crowdfunding contributions?
  • Capital gains – Money you receive as a result of selling something that you acquired at a much cheaper price than what you are selling it at.
    • Can you invest more into the stock market, houses or antiques to build up a bigger portfolio and sell that later on when these assets have appreciated?
  • Dividend income – Money you get from shares if the company whose shares you own makes a profit they can pay out.
    • Can you buy more shares to increase the amount of dividend earnings at the end of the year?
  • Royalties – Money you receive on products you have made or from franchises of your brand.
    • Can you write a book, compose music, design stationary, wall paper or a new software to generate an income stream from royalties?
  • Rental income – the rent that you collect from renting out assets that you own (usually property).
    • Is buying property in order to rent it out an option for you?

Go through the above income streams and work out how much you are receiving from each of them each month. Then decide which one(s) of these you can further develop on the short-, mid- and long term to increase your income to keep progressing on your path to Financial Independence!

The above is an adaptation of part 6 of the 10 parts in the guidebook to Financial Independence100 Steps to Financial Independence: The Definitive Roadmap to Achieving Your Financial Dreams where you can find more details as well as action plans and guidelines to each of the 10 parts. Available in both ebook and paperback format!

Get your FREE sample of the 100 Steps to Financial Independence Book here

Coming up next: Part 7 of the Journey to Financial Independence!

Part 5: Boost Your Savings

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Now you’ve started paying off your debts and are (however slowly) working towards becoming debt-free, your next stop on your journey to Financial Independence are your savings, with the aim to increase these little by little.

Part 5: Boost Your Savings

If you’ve already put together your emergency fund with (the equivalent of $1,000 which we looked at in Part 3, now is a good moment to saving together a second fund: a Three-Months-Expenses fund. As its name suggests, this fund should have enough money in it to cover 3 months’ worth of expenses. See this as a safety net should you ever decide to take an unpaid leave for up to three months or find yourself without a job for a while. In this way you have at least three months covered before you need to replace your income. Calculate how much you need for this fund, then plan how and when to start making contributions.

Another valuable step when looking at your savings more detail, is to work out your savings rate, which is the percentage of your income that you save monthly.

If you have a net (take home) pay of $1,500 and you save $150 every month, your savings rate is 10%.

This is important for two reasons: if you increase your saving rate, you not only save more money, you also need less time to put your Three-Months-Expenses fund together and will need less in your retirement fund as well as any other future savings target, since you manage to live of less.

If you take home $1,500, save $150 and spend the rest each month, you need Three-Months-Living fund for $1,350 x 3 = $4,050. With a monthly saving of $150 it will take you 27 months to get this fund together. If instead you increase your savings to $300 a month, you need just $1,200 x 3 = $ $3,600 in your fund and with $300 a month you save this in only 12 months.

Calculate your savings rate today and find ways to increase this ever so slightly to see the effects of it on your Three-Months-Expenses Fund.

A third task to complete when looking at your savings is to commit to keeping 50% of any extra money that you make. This means that if you get a bonus, extra holiday pay or a reduction in your mortgage payment, that instead of going out to celebrate and spend all the money you just got, you instantly set aside 50% of your money in order to improve your net worth and financial situation: putting it in a savings account, using it to pay off debt, making an extra contribution to your retirement fund or investing it in the stock market. After you’ve done that you’re free to use the remaining money to spend as you like 🙂

Lastly sit down for a moment today and define some of your savings goals, both short-, mid- and long term and determine how much you need for each goal and when you’d like to achieve them by. Examples of short-term savings goals could be a new phone or a holiday in summer: they are usually goals you aim for within the next two years. Mid-term goals take about three to ten years to achieve and might include a downpayment for a new house, planning for future children or buying a new car in cash (i.e. without a loan). Lastly the long-term goals take more than ten years and can include your retirement or saving up for your child’s college fees. Identify a few goals in each of those categories, but know that you don’t have to start working towards all of them at the same time. Some might stay “dormant” for a few years before you’re ready to start saving up for them.

Find some time today to look at the tasks above to complete to keep progressing on your path to Financial Independence!

 

This post is an adaptation of part 5 of the 10 parts in the guidebook to Financial Independence100 Steps to Financial Independence: The Definitive Roadmap to Achieving Your Financial Dreams where you can find more details as well as action plans and guidelines to each of the 10 parts. Available in both ebook and paperback format!

Get your FREE sample of the 100 Steps to Financial Independence Book here

Coming up next: Part 6 of the Journey to Financial Independence: Your Income.

Part 4: Tackle Your Debts

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In part 4 of the 10 Parts to Financial Independence we’ll be looking at what for many people can be their biggest financial worry: debts. Whether you’ve got thousands of dollars in outstanding loans, or just a small amount, the most important thing you can do is to take action now. This post looks at how to deal with your current debts and avoid building up any more.

Part 4: Tackle Your Debts

The first step in becoming debt free is to understand how expensive it is to have debts. When you take out a loan, be that on a credit card, a mortgage, student loan or car loan, you pay interest on the amount you’ve been lent. Over time, this interest quickly starts to accumulate as your interest is calculated over your outstanding amount as well as over any previous interest that was added.

This compounding interest means that a loan of $10,000 at a 14% interest rate and a monthly payment of $188 will have cost you $5,707 in interest after the 7 years it takes you to pay off the loan!

There are many free interest calculators available on line, so as a first task go and find one that seems easy to use and of all your debts calculate how much they are truly costing you in interest over time.

The next thing to do now that you have a better idea of how expensive debts are, is to avoid taking on any more debt. Make a mental note -or even better: a physical one and stick it on your fridge or in your agenda- to not buy anything on credit anymore, unless it is an asset that you believe will appreciate (increase in value) over time. A second tool to help you stop accumulating more debt is to make sure to finish building up the emergency fund you started in part 3. That should help you not having to go into debt for any important but unexpected expenses that come up. 

Once you’ve built up that emergency fund, use any money that you have lying around, from a yard sale you might be able to organise, or from your limit-one-expense challenge to start paying off ONE of your debts. Choose the debt with either the biggest yearly interest rate or the one that is smallest in total outstanding amount (whatever you think would make you feel more motivated) and start making extra contributions to this debt. Even if they are small amounts, you’d be surprised how much of a difference this can make over time!

On a debt of $1,000 at a yearly interest rate of 18% and a 3% monthly payment plan, paying just $25 extra a month on top of the 3%, means you pay off the debt in 31 months instead of 118 months and your total interest paid goes down from $779 to $221!

Lastly, make a commitment to yourself, your family and your future to become debt free. Treat this as one of your mayor financial goals to focus in over the next few years. Once you start working towards this, it will gradually become easier even if at the beginning this might feel like a daunting or impossible goal to achieve. Set a target date for when you want to be debt free.

Find some time today to look at the tasks above to complete to keep progressing on your path to Financial Independence!

This post is an adaptation of part 4 of the 10 parts in the guidebook to Financial Independence100 Steps to Financial Independence: The Definitive Roadmap to Achieving Your Financial Dreams where you can find more details as well as action plans and guidelines to each of the 10 parts. Available in both ebook and paperback format!

Get your FREE sample of the 100 Steps to Financial Independence Book here

Coming up next: Part 5 of the Journey to Financial Independence: Your Savings.

 

Part 3: Check your Expenses

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Now you’ve decided on your goals for Financial Independence and have also determined your starting point of what your finances currently look like , it’s time to continue with some practical steps  in order to begin your journey to achieving your financial dreams. In the next 7 parts we’ll be looking at one of the main areas of personal finance in turn, starting with your expenses. 

Part 3: Check your Expenses

In order to get your expenses under control and ensure you don’t have more money going out than you have coming in, the first step is to start a budget and thereby consciously decide where your money will go each month. A budget can be as detailed or general as you’d want it to be, as long as it helps you spend your money on those things you actually want to spend money on. A useful guideline in budgeting is to use the 50/20/30 rule: use 50% of your money for the essentials (such as rent /mortgage, groceries, utilities), 20% for net worth improving expenses (including paying off debt, saving or investing) and 30% for the fun stuff: holidays, eating out and your hobbies.

Once you’ve set your budget and as a challenge to yourself, choose one expense to try and limit as much as possible for the rest of this month. This can be anything from your coffee on your way to work to your utilities bills. Keep aside any money you save from the limit-one-expense challenge for the rest of the month.

This money will be the start of your emergency fund that you are going to build up over the next few weeks / months. Your emergency fund will be your financial cushion for those moments you need to pay for something that is unexpected but crucial in the moment, such as a plumbing expense, car repair or  washing machine replacement. By having this emergency fund you avoid having to go into debt or eat into your savings in order to pay for it. Aim for around $1,000 or the equivalent in your currency.

The last task in the expense part of your financial awareness path is to become aware of the power of lifestyle inflation and take measures to prevent this from happening to you. Lifestyle inflation is the perceived devaluation of one’s lifestyle, resulting in an increase in expenses every time your income increases , in order to live more comfortably: the more you earn, the more you automatically spend, almost without noticing. Think about the last few years when you’ve maybe had a pay rise. How much of the extra money do you end up spending without even noticing? Can you identify where this money is going? From here on try and automatically save (or invest or pay off debt) 50% of any extra money that you get. In that way you avoid spending everything immediately and instead allow yourself to focus on your long-term financial goals.

Find some time today to look at the tasks above to complete to keep progressing on your path to Financial Independence!

The above is an adaptation of part 3 of the 10 parts in the guidebook to Financial Independence100 Steps to Financial Independence: The Definitive Roadmap to Achieving Your Financial Dreams where you can find more details as well as action plans and guidelines to each of the 10 parts. Available in both ebook and paperback format!

Coming up next: Part 4 of the Journey to Financial Independence: Become Debt 

Part 2: Define Your Starting Point

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After setting your goals to Financial Independence, the next part of your journey is to determine your current starting point. With those two things together, i.e. where you want to get to and where you currently are, it’ll be a lot easier to plan out how to achieve your goals.

Part 2: Define your Starting Point

One common obstacle to achieving financial independence is consumer debt. Most people have some type of debt they have to deal with and pay off, such as student loans, credit card debt, car loan and / or a mortgage. The first step in determining your starting point is to list all of your debts with their current outstanding amounts (i.e. what you still owe) and then total those amounts to get an overall amount.

While debts represent the negative side of a financial picture, most people also have a positive side: their assets or possessions that are worth something. This can include anything from a house to a savings or investment account as well as antique or art of a certain value. Do the same as what you did with your debts: list anything you own along with its estimated value and total those amounts.

With these two numbers you can now calculate your net worth: a very useful indicator of how healthy your personal financial situation is. Simply take the total value of all your assets, then subtract the total amount of debts you have to find your current net worth. Note that this might be a negative number!

Lastly as part of determining your starting point, it’s a good idea to get a solid overview of your current expense patterns. Not only does this help to see where your money is going, it will also come in useful when you start setting goals later on in your journey for the various financial areas we’ll be looking at. Start logging your expenses on a daily basis to get a good idea of what you spend your money on.

Find some time today to look at the tasks above to complete to keep progressing on your path to Financial Independence!

The above is an adaptation of part 2 of the 10 parts in the guidebook to Financial Independence100 Steps to Financial Independence: The Definitive Roadmap to Achieving Your Financial Dreams where you can find more details as well as action plans and guidelines to each of the 10 parts. Available in both ebook and paperback format!

Coming up next: Part 3 of the Journey to Financial Independence!

Part 1: Set Your Financial Independence Goals

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When you start your journey to financial independence there’s a lot to consider and go through. There might be many new things you’ll end up learning about or just points you had never really thought about before.

To avoid you feeling overwhelmed and to provide some structure to your path to FI, I’ve divided the many topics into 10 smaller parts, to help you get started on your journey to Financial Independence.

Part 1: Set your Financial Independence Goals

Before you set out on any new adventure, it’s often helpful to take a step back and think about why you are embarking on that new mission. What are you trying to achieve?  What aspects of your current situation are you not as content with and would you like to change? How would your life change for the better? Once you know why you are starting  this new journey, it’ll work as a motivator to get back on track anytime you find yourself veering away from it.

Once you know your reason, it is equally important to define what your new situation would look like when you get there. What is your end goal? What are some of the milestones that you would need to achieve before reaching that final destination?

It often helps to state your objectives as clearly as possible and to visualise exactly what that would look like. Instead of thinking you would like to have more money, define why you want that money, how much you want, what you would do with it and picture what your life would look like.

Here is an example of what that might be:

“I want to have more money so I can spend more time with my family being outdoors. In particular, would need X amount of money to buy a small condo in the mountains. During holidays and for long weekends we can just drive up to our second house and enjoy our time together out in nature.”

Lastly, an important aspect of part 1 of your journey is keeping track of your progress to financial independence and motivating yourself to stick to your targets. You can do this by creating a vision board with your goals, by creating a tracker of your progress as well as by celebrating each time you reach one of your smaller milestones along the way.

Find some time today to look at the questions and guidelines above and then note down some of your answers to them to get you started on your path to Financial Independence!

The above is an adaptation of part 1 of the 10 parts in the guidebook to Financial Independence100 Steps to Financial Independence: The Definitive Roadmap to Achieving Your Financial Dreams where you can find more details as well as action plans and guidelines to each of the 10 parts. Available in both ebook and paperback format!

Coming up next: Part 2 of the Journey to Financial Independence: Define your Starting Points

Book Release: 100 Steps to Financial Independence

1541328964After almost three years of having been “in the making”, the 100 Steps to Financial Independence Book is now almost here! This action-oriented, easy-to-follow and motivational book will be your number 1 go-to-guide to start pursuing Financial Independence now and live the life you truly want!

Sign up to get your free copy now and be one of the first ones to receive it straight to your inbox or mobile reader device as soon as it’s released. (Expected release date: October 2018).

7 Ways to Invest Some Extra Cash

7 Ways to Invest Some Extra Cash

Last month I received a small bonus from work and after the initial excitement of having some extra money as well as the appreciation and recognition for a job well done, I needed to decide what to do with it, as I didn’t want to blow everything in one go.

How could I make the most of it and allocate it in the best way possible to get bigger long-term results from it? Should I save it, use it to pay off debt, invest it or invest it in myself or my company to generate more income with it?

Here I’ve put together some key points that I hope will be of use to you for when you too find yourself with a little bit of extra money – maybe due to a (small) pay rise, a present or just because you’ve perfected your budgeting skills.

Here are some of the advantages and disadvantages of what you can do with some little extra cash:

Build an emergency fund

What: Save together $1,000 (or the equivalent in your country).

Pros: An emergency fund will allow you to pay for unexpected events without having to go into debt or eating into your savings. I also recommend to build a 6 months living fund with time to cover your expenses for up to 6 months if you find yourself without a job for a prolonged period of time.

Cons: Don’t put more than needed in this savings account, as it will likely not be making you any money due to low interest rates, so once you’ve hit your target amount, put any extra money elsewhere.

Pay off debt

What: Make an extra payment towards your debt, such as a credit card, mortgage or student loan, especially if you have any debts with an annual interest rate over 5%.

Pros: By reducing your outstanding principal, your interest charges go down and so will the long-term effects of compounding interest. The long-term goals of becoming debt-free also means more independence and peace of mind.

Cons: Paying off debt reduces your expenses in the long run, it doesn’t create more money. If you only have outstanding debts with a fairly low interest rate (4% or less), you might get a higher return-on-investment in other ways, such as investing it or generating another income stream with it.

Save

Save money

What: Put the money in a savings account to generate interest.

Pros: It gets you a little closer to your savings goals and it will make you some extra money over time due to interest and most importantly: compounding interest.

Cons: Interest rates are extremely low at the moment and below most inflation rates which means that not only will that money sit idly without making you much money, with time it will also lose value.

Contribute to you pension

What: Make an extra contribution to your private or workplace pension plan.

Pros: By adding more to your pension you’ll not only increase your pension fund, it also allows for it to grow even faster due to increases in returns and its compounding effects.

Cons: Any money invested in your pension plan will not be available until your retirement, you essentially lose access to that money for a long time (or you might be able to take it out before but will need to pay hefty fees.)

Invest in a brokerage account

Invest in the stock marketWhat: Invest the money in your own private investment account to generate interest and dividends.

Pros: Increase your investment funds, as well as the amount of dividends and interest generated to compound without losing access to this money.

Cons: You likely won’t benefit from the same tax advantages that pension funds give and you have to manage your own investments.

Invest in yourself

What: Invest in your individual capital by spending the money on a course, attending a conference or buying books to gain new knowledge or develop your skills.

Pros: Can be tailored to your needs and interest, and can have a long-term effect on your employability, professional development and / or earnings.

Cons: This strategy can be time consuming and prove difficult to see direct financial effect.

Invest in another income stream

Generate another income streamWhat: Set up a company, write a book, buy a property-to-let or find a different way to create another income stream with time.

Pros: Can provide you with a reliable, steady stream of income on the side.

Cons: Can be expensive, hard work, uncertain and unsuccessful.

Which of the above options you ultimately choose depends on your current circumstances: your dreams, plans, job, how much money you have to spend, the risks you want to take, how much time you can and are willing to invest, your family situation and many more. I hope however that the above helps in giving you a better idea of the various options to help you make a decision!

In addition to using your money wisely, if you feel you want to also enjoy a little bit of that extra money now and not just invest it in your future, consider sticking to the 50% rule: invest 50% and keep the rest to spend freely on whatever you want now. Or adapt this to whatever % you want: invest 70% and keep 30%, invest 20% and keep 80%..Whatever you feel happy with!