Now we’re getting to something with real wealth building power! Here’s a chart showing the worst decline in the past 25 years for the overall stock market vs. While stocks tend to fluctuate wildly in price, the price of bonds is much more stable by comparison. Investors typically enjoy bonds for the stability of their fixed payments and the stability of the underlying price of the bond itself. But in general, you can expect bonds to yield anywhere from 1-4%. Interest rates obviously vary significantly, depending on your type of bond and the current interest rate environment.
Interest Paying Bondsīonds are basically IOUs from businesses to investors. And while you might not even beat inflation at those rates, CDs are FDIC insured up to $250,000, so they’re risk free. In today’s low interest rate environment, you’re lucky to find a CD paying any more than about 2%. Welcome to the world of investing, little Money Wiz. Man, did I feel like the coolest 16 year old around with my “retirement acccount.” I’ll never forget that intoxicating feeling of getting paid money just because I had money. You like CDs because they pay higher interest rates than cash in a savings account.Ī 6-month, $500 CD paying 5% interest was actually my first investment ever.
(Yes, you’re getting old!)Ĭertificate of Deposits are like savings accounts, except your bank won’t allow you to access your money for a certain amount of time without incurring a penalty.īanks like CDs because they get to keep and use your money for a longer amount of time, without having to hold your cash on hand in case you get a wild hare to buy the latest infomercial special. Of course, we’re just getting started… 2. Unfortunately, most people never get past this stage in their investment journey. While these two both pay slightly higher interest rates than a regular ‘ole checking account, you’re still gonna be hard pressed to make any meaningful income from these ultra-safe choices. Probably the most basic income producing asset in the world, and also one of the least profitable. Savings Accounts or Money Market Savings Accounts The result? Your investment tracking becomes almost as easy the money you’re getting from all your income producing assets.
Their free software automatically tracks the performance of your income producing assets, including monthly cash flow, annual return, and even free fee analysis. Oh, and before we get too deep into this, no matter which asset you’re invested in, I continue to recommend Personal Capital. Multi-family Rental Properties (Duplexes, Triplexes, and Quads) The Official Money Wizard List of Income Producing Assets.(yet!? maybe!?) So, in case you’ve got more money laying around than you know what to do with, allow me to introduce… The Official Money Wizard List of Income Producing Assets Unfortunately, I don’t have unlimited cash to invest in all these possibilities. Over the years, this little fascination has left me with more ideas than I know what to do with. But transforming yourself into a business mogul, with money flowing in from all your different successful ventures? Now that’s winning the money game…
Sure, working your way towards a really high paying salary is cool, I guess. I don’t know why, but any time I hear of somebody making money in some oddball way, my eyes light up, and I file it under “Great idea! Life Goals…” I’ve always had a special fascination with idea of money flooding in from all directions. There is the investor class and the people who have to work for a living.” There is no lower, middle, or upper class. Instead, let’s look into spending our money on the ultimate status symbols: income producing assets. So if you’re still tied to your day job, and you’re serious about reaching financial freedom, then ditch the cars, jewelry, and luxuries. 65% of them have at least three income streams, and nearly 1/3 have 5 or more income streams. At least that’s what millionaires will tell you.