Growing your wealth usually requires a lot of hard work. But not always.
There are ways to quietly build your stash of cash without doing very much at all. Once you get the ball rolling on these ideas, the cash should flow in without you hardly lifting a finger.
Here are some lazy ways to make money day in and day out.
1. Reinvest your dividends
When you invest in mutual funds, ETFs and individual stocks, you have an important decision to make: Should you reinvest your dividends?
Requesting a brokerage company to reinvest dividends means you will automatically buy additional shares of the original investment — rather than cashing them out — each time a dividend is paid out to you.
Because these purchases are automated, you don’t have to do a thing after making the initial request.
Over years and decades, reinvesting dividends can make a huge difference in terms of wealth accumulation. According to Hartford Funds, 69% of the total return of the Standard & Poor’s 500 index since 1960 has been due to reinvested dividends and the power of compounding.
2. Open a high-yield savings account
For years, savers got virtually no return on their money. Today’s higher interest rates have changed that fact for millions of people.
However, many banks still offer skimpy returns. That’s why it is important to compare rates at a number of banks, credit unions and other institutions to make sure you are getting the best deal.
So, stop by the Money Talks News Solutions Center and search for a great savings account rate. Getting 4% or more on your savings — instead of 1% or less — is a great and lazy way to build wealth.
3. Take advantage of a 401(k) match
When you sign up for a 401(k) plan at work, the odds are good that your employer will agree to match a certain percentage of your contributions. As many have pointed out, this is essentially “free money.”
The precise way this works varies from company to company, and not all companies offer a match.
However, among those that do, Fidelity notes that it is common for employers to contribute $1 to your account for every $1 you contribute up to 3% of your salary. After that, the employer might contribute 50 cents on the dollar for the next 2% of your salary.
As long as you contribute to your 401(k) account, you get the match — no other work necessary.
4. Earn rewards on a cash-back credit card
First off, it’s important to state the obvious: Spending less will increase your wealth. It’s foolish to spend more just to earn cash-back rewards on your credit cards.
But life is full of times when we must spend, whether we like it or not. During those occasions, using a cash-back rewards credit card can cut the cost of your purchases and save you a bit of money.
Just keep one very important caveat in mind: Using a cash-back rewards card rarely makes sense unless you pay your bill in full every month.
If you have the funds and the discipline to commit to paying off the balance monthly, stop by the Money Talks News Solutions Center and search for a great cash-back credit card.
5. Use cash-back shopping sites like Rakuten
Sites such as Rakuten actually pay you to shop. Once you sign up with Rakuten, you get cash back on many of your online shopping trips as long as you start them from the Rakuten website.
You also can get a bonus — sometimes as high as $40 — just for signing up.
This is another example of making the most of it when you must spend money — and even when you choose to do so just for the fun of it. And Rakuten is not the only site offering this type of opportunity.
For more, check out “51 Fast Ways to Score $1,000 or More.”
6. Rent out a garage, room or parking space
It is no secret that housing has become ridiculously expensive. You can recoup some of those costs by renting out your garage, a room in your home or even a parking space. Sites such as Neighbor.com make it easy to connect with those who are looking for storage nearby.
Like the other items on this list, renting out part of your home is largely a situation where you make an initial decision and then sit back to watch the cash roll in.
Looking for more ways to generate extra cash? Check out:
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