Everyone wants to double their money. Fortunately, there are ways to multiply your money that don’t involve get-rich-quick scams or winning the lottery.
These legitimate ways to create wealth do not require massive amounts of income to get started. While you may not double your money quickly, the rule of 72 shows it is possible with time.
The rule of 72 provides an estimate of when your money will double. For example, if you divide 72 by an eight percent rate of return, you see it would take nine years for your money to double. A higher return on investment will decrease that time.
These methods to grow your money are available to everyone.
How to Multiply Your Money
Do you want to know how to multiply your money? Or, are you looking for legitimate passive income ideas that will add money to your bank account?
*Deal of the day: CIT Bank pays .45 percent on their money market accounts. Earn 7x the national average when you open an account with just $100. All deposits are FDIC insured up to the $250,000 per depositor maximum.
Here are five simple ways you can start growing your money right now.
1. Invest in the Stock Market
When trying to learn how to double your money, investing in the stock market is the best way to increase your wealth over the long-term.
The stock market can be risky and you might lose money. However, you can also make money investing in the stock market.
The S&P 500, viewed as a leading stock market index, has had an average annual rate of return of eight percent since 1957. At that rate, you would double your investment within nine years.
What if you don’t have a lot of money to invest or don’t know where to start? You can still invest in the stock market and grow your money.
The key is to start investing immediately. The sooner you start investing, the less money you have to save overall because of compound interest.
Take reaching a net worth of $1 million as an example. Here’s what you need to save each month to reach that goal, starting at age 20.
|Age||Monthly Amount to Hit $1 Million|
SoFi Wealth is a terrific choice if you want to start investing but need help. The platform helps manage your investments for you to ensure you are on target to reach your goals.
|Sofi Wealth - start investing today|
$5 minimum balance requirement
No management fees make it easy to transfer over old 401(k) and IRA plans.
SoFi Wealth has a $1 minimum balance requirement and doesn’t charge any management fees.
If you have an old 401(k) plan or IRA, you can move those to SoFi Wealth to receive their assistance.
What About a 401(k) Plan?
Are you new to investing or prefer not to have multiple investing accounts? Your employee-sponsored 401(k) plan is a suitable alternative to investing through a brokerage like SoFi Invest.
Most employers offer a match to your contribution, up to a certain amount. This instantly multiplies your money so more will go into the market and work for you.
Many 401(k) plans have free educational resources to help you learn more about investing. Most plans also include index funds as investment choices.
This lets you track the market without paying burdensome fees in an actively managed fund.
Read our guide on how set up your first 401(k) plan if you’re new to this personal finance tool.
2. Invest in Real Estate
Many people believe the stock market is the only way to grow wealth. Thanks to crowdfunding, real estate is a viable investment option for more people. It also lets you diversify your investing to help you mitigate risk.
You used to need significant amounts of money to invest in real estate. Alternately, you needed to manage a property.
Crowdfunding lets you find real estate investments with minimal resources. It also allows you to avoid managing the property yourself.
You can now invest in real estate with as little as $10 through platforms like Fundrise. Similar to the stock market, investing in real estate can be risky. However, it offers plenty of lucrative opportunities.
|Fundrise - start investing in real estate|
$10 to start
This popular crowdfunding real estate platform makes it possible to invest in real estate with as little as $10!
Returns, net of fees, were 7.4 percent as of 2020.
A platform like Fundrise helps you find properties that fit within your risk profile. These can include:
- Commercial property
- New home construction
Fundrise allows you to invest in properties without dealing with physical management. Retirement or non-retirement accounts are available for users.
Roofstock is another good option to invest in real estate. The platform focuses on turnkey properties to rent.
No minimum balance is required to invest with Roofstock. You must have 20 percent to put down and can invest with an IRA.
3. Open a Savings Account
Savings accounts are the classic way to multiply your money. While doubling your money with a savings account will take years, they are a reliable way to grow your money without effort.
Interest rates on savings accounts used to be significantly higher in past years. Before the Great Recession, they were nearing five percent. Now, it’s hard to find anything above one percent.
Unfortunately, the current pandemic is making things worse.
Savings accounts offer liquidity, which is essential to any investment plan. Liquidity is helpful in various ways, including:
- Funding for a small business idea
- Saving money for an investment property
- Liquidity to manage business expenses
CIT Bank is an excellent choice for savings. The CIT Bank money market pays .45 percent and only requires a minimum balance of $100.
The account operates like a savings account. It is FDIC insured up to $250,000 and charges $0 in fees.
You can also use the account to make withdrawals and pay bills.
|CIT Bank - start your emergency fund|
$100 minimum deposit requirement
Open a high yield savings account or money market with $100!
4. Lend Your Money to Someone Else
One of the more unique ways to multiply your money is by lending it out to other people through peer-to-peer (P2P) loans. This is a terrific option if you have little money to invest or you want to diversify your investments.
You can loan your money to others through a platform like LendingClub.
People use platforms like LendingClub to get an unsecured personal loan. They use the loans for almost anything, including:
- Consolidating debt
- Funding a house remodel
- Refinancing a car loan
You can fund loans in increments as low as $25. You also get to choose which loans you want to fund. This helps you spread risk and maximize returns.
LendingClub claims to offer returns between four to eight percent for investors. Your rate of return depends on how well you spread your risk.
P2P loans can be risky, similar to the stock market. Be aware that the risk of default can impact your returns.
That said, P2P loans can be a good way to help someone while growing your money.
5. Pay Off Debt
Paying off debt is a legitimate way to multiply your money. People often debate paying off debt vs. investing. It’s an age-old question as to which is more important.
The answer aside, killing debt is an overlooked way to multiply your money.
Paying off debt helps you create wealth since debt is one part of the net worth equation.
When you pay off debt, you save money that would have gone towards paying interest. That money can then be used in other ways.
Debt, especially high-interest consumer debt, is restrictive. It will keep you from creating passive income streams that are vital to accumulating wealth.
If you have credit card debt, consider consolidating with SoFi. The lender offers rates as low as 5.99 percent and has no hidden fees.
This could let you slash your rate, pay off your debt quicker, and have more funds to invest.
As you begin to pay off debt, try to pair it with spending less. When you near debt freedom and have more money to invest, you can take advantage of the stock market or real estate.
This can help you double your money in eight or nine years.
Investing while paying off debt is a personal decision. You can do both simultaneously, but it will lengthen the time it takes to become debt free. Do what’s best for you and everything will work itself out in time.
Wealth creation is something most people aspire to, but believe it is difficult or impossible. Thanks to an abundance of tools and resources, it has never been easier to find legit ways to amass riches.
As you pursue ways to double your money, remember the rule of 72. Divide 72 by the rate of return and you will see how long it will take you to succeed.
While success may not come overnight, it will happen faster than you think if you are committed.
What are some of your favorite ways to grow your wealth? How do you diversify your investments?
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