We are in the midst of a fascinating time in the financial and economic world. The global pandemic initially shook the investment markets, causing severe drops across most stock exchanges. In addition, millions of people were forced to file for unemployment and many are way behind on their mortgage payments and rent. And yet, with all the turmoil and gloomy news, stocks and investments have come roaring back to show higher gains. It’s becoming very clear that in this financial downturn, the winners are the people who are well-off and have ready cash. Those losing their place in the world are the wage earners making less than $20 per hour. Their jobs have been decimated and many feel that a lot of those employment opportunities are not coming back. Clearly, this a moment in time when the investor is triumphing.
Start Up a Side Gig and Pay Off High Interest Credit Cards
One of the biggest drains on your monthly cash flow is high interest credit cards. If you want to improve your financial situation and have money to invest, you’ve got to get out from under those payments. Even with variable rates it’s common for credit cards to charge you annual interest rates of 18 to 20 percent. Given that interest rates are at historic lows and the prime rate is far less than 5 percent it’s like you borrowed money from a loan shark. It pays to create a side gig that brings in extra money each month. You should dedicate all the extra money you make with your new venture to paying off the credit cards. It’s very likely that in your new business you’ll be meeting with customers or suppliers by Zoom video conferencing calls. To assure that you have a record of the call you can use a transcription service that can convert a Zoom mp4 to text in seconds. This service will save you time and allow you to be more productive.
Refinance or Use the Equity in Your House
The current interest rates on new mortgages or home refinance loans are extremely low. It’s possible to leverage these attractive rates and increase your cash flow or pull equity out of your home. If your existing mortgage rate is several points higher than today’s rates, consider refinancing your home to lower your monthly payments. If you purchased your home at a time when house values were lower, you can pull equity out of your home with a home equity line of credit or a refi against the new assessed value of your home. In both of these cases, this will give you additional cash or cash flow to be used for prudent, high-return investments.
Move into a Smaller House
If you would like to take a more aggressive approach to building your portfolio funds, then consider selling your home and moving into a smaller dwelling. There are attractive options out there that can provide lots of comfort and elegance in a smaller footprint home. With the sale of your big house you can get a new place to live and pocket lots of cash from the sale to use for investing. In addition, with a small house you will greatly reduce your monthly expenditures, which will free up extra cash each and every month. Smaller dwellings cost way less to furnish, take less time to care for and save you money on utilities. If you take this path, you’ll find that you’ll be able to grow your investment portfolio significantly.