How to invest money to make money?

At 925 Millionaires, we focus on the principle of Money should make money while you sleep.

That is the ultimate passive income model where the money keeps multiplying without we trading our precious time or hard work for money.

When you start saving money, you need to be thinking of investing it in the right places so the money will keep multiplying. 

Lets break that down in this post and see how to invest. 

Stage1: Investing $100

In this stage, let’s look at the investment options when you have $100.

Theme: Investing in self – Skill Building

With only $100 to invest, I would put that in skill building.

Knowledge and skills are the biggest assets. The more you acquire them it is going to give massive ROI in a long run.

Invest on a blog

A blog is the best investment in terms of building skills and also starting a side business. 

We are moving towards the digital economy. People are consuming all kind of information online.

The blog also helps build communication skills. In order to write you need to read and more you read smarter, you get with all the information.

Whereas writing helps you become a better storyteller. You will be able to organize your thoughts better and communicate well with your audience.

Given that, it is one of the lowest investment with a large potential gain.

If you are interested. Here is the tutorial to Start a blog.

Invest on learning

In this stage, you should learn as much you could.

As you practice more you will get used to the habit of learning. 

It is important to have the habit of learning. No one ever succeeded without learning new things everyday.

Using the $100 buy as many books you need or signup for book lending services like audible.

Click the image below and get 2 free books from Audible.

Stage 2: Investing $1000

As you learn more things and start blogging. Making $1000 is easy, if you are aggressive you could make it in a week. 

If interested join the 5 days crash course here –> 1K Course

Theme: Playing around with money, learning to take risk.

When you get to $1000 range, you have little bit more room to play around with the money to test ideas, investment opportunities and spend more on building new skills.

You also get a feel for how to work with money. 

Start an eCommerce Store

Most of the people are transitioning from physical store to online shopping.

There is a huge opportunity to start an eCommerce store to start selling physical products.

Especially with the dropshipping model it is so easy to start one and run a huge online store with a little investment.

The best part is, your blog and the store could compliment each other and have 2 streams of income with overlapping effort.

See this post if you want to learn how to start a dropshipping business?

Learn about buying and selling products

Additionally, you can also leverage marketplaces like eBay and Amazon FBA to sell physical products.

Selling physical products is fairly easy compared to digital products. Learning to sell products teaches you many skills, like running ads, conversion optimization, and upselling products. 

Invest on a Course

As I mentioned earlier, education is the key to success. More you learn the better you get. 

Your value and portfolio are directly proportional to your skills.

Whenever you get an opportunity to learn from someone don’t miss it.

Courses are a great way to look from the perspective of the experts. Even  a few new ideas or tips that could accelerate your business is worth it.

Stage 3: Investing $10,000

With a blog and eCommerce business, you should be easily making 10k.

In case you are still not there, it could only because you have not acquired the skills yet.

Keep it simple, leverage other people skills, continue to learn and takes risks. 

You would be easily at 10k range in no time. 

Theme: Learn to plan your finances

When you get to 5 figures portfolio, you should start planning your finances.

Start understanding the cost of you monthly expenses. Where the money is coming from, taxes you pay and other financial commitments.

As you look into these numbers and learn about your finances, you will be able to take many informed decisions.

It is a tricky phase because as you see some money getting accumulated, many will loosen up and get into a fancy car loan or luxurious vacations.

Suddenly, you are back into stage 1 and all your hard work is ruined. 

Keep track of the numbers, even if you want to spend on fancy stuff. Make sure your portfolio is not reversing.

Start investing in stocks and mutual funds

Start small with investing in equities.

Investment could mean different things to different people. Define what it means to you. 

Bottom line any investment should have a return and sometimes it could be a dip in the beginning and then come back with good returns.

Understand the nature of the investment before you go deeper. 

Pick right Stocks

Start your equity investment with solid stocks. The ones which have less potential to fail.

When investing in the stock market. The first thing to remember is not to lose money.

Choose stocks that are low risk and could potentially grow big in long term.

Like if you bought Amazon or Apple stock before 10 years you would have seen up to 4000% growth now.

These types of stocks keep showing up but it is hard to identify them in the early stages without in-depth analysis of the companies.

I recommend leveraging experts in this field to help guide us.

Services like Motley fool gives you the recommendation on stocks that have huge potential. Check out their service and see if it works for you.

Click the image here to learn more

Mutual funds with low cost expenses

There are tons of mutual funds and many claim high returns but when you look at their cost structure it could be eating up a lot of profit. 

Then comes the tax implication of the funds that are managed by the broker.

With all this in mind, many experts including Warren buffet recommends index funds.

They are low cost funds and they use a wide variety stocks that is proven to perform better in a long term. 

You can go wrong in any of these index funds. 

Start investing in these funds and plan to leave it for a long term.

Run at least 1 Active small business

The best investment is always a good business. Especially, a small business that helps solve problems for certain niche.

You should also have a small niche based business. If you have already started a blog or an eCommerce store then you are good to go.

If you are still on the fence to commit on a blog, then you can start with freelancing first and scale from there.

Stage 4: Invest $100,000

If you are diligent and following the investment best practices. You would have accumulated $100k before you know it.  

Theme: Diversify and play safe

When you are at the 6 figure range, managing money is a totally different game. 

It is no more testing or playing around anymore. Any stupid move you could lose big.

At this stage, you should be careful with the investments you make. Often that means investing on asset that might not have a large returns but safe. 

It also means diversification, spread your investment in multiple investment opportunities to balance the risk. 

Invest in Real Estate

Real estate is a great opportunity when you have enough money to put in for down payment. 

Real estate offers many new ways to invest and grow your money. 

• Rental Property – Buying a property to rent it out. 
• Flip houses – Buy a property at low cost and quickly sell it for a higher cost by adding more features to the house.
• Vacation Rental/Short term rentals – A new space where you can rent your house or a room in your house for a short-term rental.

Based on your comfort, pick one of them and start growing your portfolio.

Real estate is a fairly less risky investment and if you pick the right property it could be really the best investment.

Learn to hire people

I call it as multiplying your time.

You only have 24 hours a day and can do only a limited amount of work on your own.

You only grow when you can get more things done.

Allocate money to hire people to do the work for you. When you learn this skill, delegate almost all the noncritical work to someone.

You can find experts in each field who can help you for a reasonable cost. 

Once you understand this hiring process, expand your business or add a new business that could potentially grow your portfolio exponentially.

Buy Successful Businesses

The easy way to start a business is buying the one that already works. 

When you buy the business try to buy it along with the people who are running it. 

For example, if you are buying a local grocery store. Try to not change any people in the store and do it in a way that it is seemless so the business would continue to run successfully. 

Devise Long term and Short term strategies

As part of diversifying learn about short term investments vs long term. 

Many make the mistake of holding something long term that should be a short-term investment like some stock options.

Some investment needs to held for a long term like real estate or index funds.

Create a portfolio and stick to it. If possible hire someone to keep track of this so you won’t take emotional decisions.

Where are you investing your money?

Now it is your turn to tell me your investment ideas. Not all the portfolio is the same. 

As long as your worth is growing in a consistent basis you are doing good. If you are not able to predict where you will end up in 10 years, it is a sign that you need to do something right now.

Share your thoughts in the comments.