“Do not work for money. Let your money work for you.” 

Surprised..! But, you read that right. Your money is capable of working round the clock and doesn’t have to keep a 9 to 9 schedule. Make your money work for you when you’re sleeping and even vacationing. Why, you ask?

WHY TO MAKE YOUR MONEY WORK FOR YOU?

1. It will free you up.
2. Unlike us, money can work 24×7
3. It will reduce your Business & Salary dependency.
4. You will build wealth over time.

 Why we do Business or a job? To earn money. What happens when we need more money than we are already earning? We expect high profits or a pay-rise.

As the years go by, our expenses go up due to inflation. Moreover, it’s also human psychology to have desire to improve once standard of living. It means, expecting high profit in business or a pay-rise in job is inevitable.

This is where the problem begins to become bigger. The more money we need for ourselves, the more we are becoming dependent on our work life.

If you are one of those people who love to continue the way your doing now, there is no problem. You will work harder, and the expected pay-rise will eventually come.

But if you are like ones who wants to generate passive income, they must learn to how make money work for themselves. Why? Because it will make them less dependent on the income from business and job.

The harder the money works for you, more free you become from work life. Moreover, money-working in parallel to your job can also build tremendous wealth for you.

HOW TO MAKE MONEY WORK FOR YOU?

There are only two ways to make money work:

1. Buy assets – which generates income.
2. Buy assets – whose value appreciates with time.

In both the cases you will note that one has to “Buy assets” to make money work.

How the money works? By generating an alternative income source, or by making the invested capital appreciate with time.

But this is not anything new, right? ‘Income generation’ and ‘capital appreciation’ are concepts which we all know. But knowing the concept is not enough. Probably this is the reason why less people can claim that “they know how to make money work for them”.

Where is the problem, why even after knowing the concept people are not able to make their money work for themselves?

Following are the assets to buy for income generation:

1. Fixed Deposit: Fixed deposits can also generate monthly income. Start an Fixed Deposit(FD) with a standing instruction of crediting the interest in savings account each month.
2. Mutual Fund with Dividend Option : These are monthly dividend plans offered by mutual funds. One such mutual fund scheme is HDFC BAF, these funds can pay monthly/quarterly/annual dividends as directed.
3. Annuity: It can generate guaranteed income after retirement. How one can automate the process of annuity purchase? By investing each month in a pension plan.
4. Real Estate(Commercial Property): Commercial Property can generate monthly income and capital appreciation.

Following are the assets to buy for Capital Appreciation:

1. Pay off your debt: How paying-off debt can generate capital appreciation? Actually it cannot. But what it does is perhaps better than capital appreciation. Paying off debt slows down the rate of growth of our debt. This bigger and costlier will be the debt, more will be the associated expense. By paying off such debts, the expense can be drastically reduced.
2. Invest in Equity & Debt Mutual Funds: These are mutual funds which has a good portfolio diversification, and can generate above average returns when held for long term like 10+ years. Start a SIP in such a mutual fund and keep contributing till eternity.
3. Real Estate(Open Land): Investing in open lands and leave it for long can create healthy wealth over long period of time. As there is say " Land never depreciates".

CONCLUSION

In order to make money work for your, start with saving a big chunk of your income. Once enough saving is accumulated, Do this to start accumulating more and more assets. These assets in turn will generate income, or will fast-appreciate in value.

Income plus capital appreciation is turn will build wealth. This is the most practical version of making money work for you.