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Investing in Your 20s: A Beginner’s Guide to Building Wealth Early

02.01.2021 by admin // Leave a Comment

how to invest money in your 20s, investing money in your 20s, best ways to invest money in your 20s

Investing in your 20s is crucial for building wealth and securing your financial future. However, it can be overwhelming to know where to start. Don’t get caught up in all the hype of the latest make money quick stock or crypto. As we’ve seen in the last year, those can go down as quickly as they went up. You have decades left to reap the benefits of investing in stocks and it’s important you make the right investing decisions for yourself. This beginner’s guide will walk you through the basics of investing, choosing the right investment options for your needs and saving for retirement. By starting early, you’ll have the advantage of time on your side to grow your investments and reach your financial goals.

Invest Enough In Your 401k To Get The Full Employee Match

A 401(k) plan is a retirement savings plan sponsored by employers. It allows employees to contribute to their retirement savings pre-tax in the United States. The 401(k) contribution limit for 2023 is $22,500, an increase of $2,000 from 2021. Don’t know if you have a 401(k) plan or match? Ask your boss or look at the internal benefits webpage at your company. If you are eligible, your company will have information on how to sign up. The contribution amount you elect will be taken directly from your paycheck.

At minimum, you should always contribute enough to your 401(k) to get the full match. As you start making more money, understand how much you’ll save on taxes and begin increasing your contributions until you hit the max. Also consider your money needs in the next 5-10 years. When you’re starting out in your 20s you’re paying down debt, saving for a car and saving for a house. It’s easier to put more money in retirement accounts when you’re no longer saving for a down payment.

Even though a 401(k) can be a set it and forget it account it’s best to check the performance of your 401(k) investments periodically. A 401(k) is a great investment vehicle; however, many companies limit what you can invest in. Even if you have a 401(k) you should also open a Roth IRA account for retirement savings and investments.

Open A Roth IRA To Lock In Gains Tax Free

A Roth IRA is a retirement account that offers you a tax benefit when you retire in the United States. Roth IRA contributions are not tax deductible. You also do not pay taxes when you withdraw money at age 59 ½ +. This is different from traditional IRAs and 401(k) plans.

Make sure you’re familiar with the benefits of a Roth IRA and the Roth IRA rules first. Important rules include you can only invest up to $6,500 in 2023 pending income eligibility and you can only withdraw certain money penalty free before 59 1/2. While you don’t pay taxes on gains, you also can’t write off losses on your taxes.

At the beginning of your career, your salary is lower, your taxes are lower and you have less money. It’s harder to contribute at all to your Roth IRA, let alone the maximum. At the same time, you have the opportunity for money you contribute to grow tax free for 40+ years. In a Roth IRA you also have the flexibility to invest in any stocks, ETFs and mutual funds you want.

How do you set up a Roth IRA? It’s very easy and can be done in minutes. Charles Schwab, Vanguard and Fidelity all offer Roth IRA accounts among others.

Invest Money Through ESPP and Vested RSUs

Do you work for a publicly traded company? Your company may offer an Employee Stock Purchase Plan, or ESPP. This benefit enables you to buy company stock at a discount. ESPP is a way for you to make extra money without any extra effort. The only steps? Enrolling in ESPP and deciding when you want to sell the shares. Whether you keep the shares or sell the shares is based on your own investment and tax strategy.

Another possible benefit to take advantage of is equity compensation. Restricted Stock Units (RSUs) are a popular way of giving company equity to employees at tech startups and large public companies. RSUs are a great way to grow your wealth. If they aren’t part of your comp plan today, inquire if this is something your company offers. A company may offer RSUs to employees, but may not offer them to all employees. Sometimes employees have to perform at a certain level, or need to be at a certain level, or they are offered as part of an employment package. Whether you keep the shares or sell the shares is based on your own investment and tax strategy.

Buy Individual Stocks in the Stock Market If You Like Risk

You want to buy individual stocks to get rich quick, but how do you know which one to buy? When starting anything, I always ask myself about what I’m willing to pay to learn. Learning anything cost money. Even if you teach yourself, you always need to buy the basics. For example buying / renting gold clubs or technology to watch how to videos on YouTube. How much are you willing to spend learning something new?

The thing about stocks is that there is a chance it could go to $0. That chance depends on which stock you pick. For example, Gamestop is a very volatile stock. If you buy a share and it comes crashing down you could lose most of your money when you decide to sell. This is why it’s good to know how much you’re willing to spend to learn something new.

If you’re willing to spend $100 to learn something new, buy $100 worth of a stock or several stocks. Say the stock goes up in value, great! If it goes to $1, you were willing to spend $100 to learn something new. Now, you’re left with $1 and knowledge about how to set up an investing account, how to buy a stock, how stock prices fluctuate, where to learn more about your investments, how to sell a stock, how to write off stock losses on your taxes and more.

When you buy your first stock consider buying a share of a company that excites you. That way, you’ll want to learn more about the company. You’ll want to listen to quarterly earnings, learn about market valuations and more. If you’re not excited about your first investment you’re less likely to spend extra time learning about investing in the stock market. Generally, stocks fall into two categories: growth stocks and value stocks.

Growth Stocks

Growth stocks are stocks that are considered to have the potential to outperform the overall market based on their future potential. These stocks usually don’t pay dividends and tend to be more volatile. Examples of growth stocks include Tesla, Roku, Square and Amazon.

Value Stocks

Value stocks are stocks that are currently trading below what they are really worth and the thought is they have the opportunity to provide a better return. Some value stocks also offer dividends so you don’t have to wait to sell a stock to get some cash. Value stocks are usually larger, more established companies. Examples of value stocks include companies like Verizon and 3M.

Both growth and value stocks have the possibility to go up in value and go down in value. There is no guarantee the stock will go up. And, if you think a stock is overvalued there is also no guarantee that stock will go down.

See Also: Smart Money Moves In Your 20s

Buy ETFs If You Don’t Want To Actively Manage Your Stock Portfolio

ETFs stand for electronically traded funds, also know as index funds. When you buy an index fund you are buying a basket of individual stocks. If you buy a S&P 500 ETF, you’re investing in all 500 companies that are in the S&P 500. The more diversified your portfolio, the less volatile your portfolio is. The goal of index funds is to match the performance of a specific benchmark.

There are fees for ETFs; however, they tend to be lower than mutual funds. Before you buy an ETF make sure you know what fees the ETF charges per year. The average fee for index funds is 0.15% according to Morningstar data from April 2019.

Keep Some Money In Low Risk Investments

As you’re getting established, it’s always a good idea to keep some money in low risk investments. This includes keeping your emergency fund in a high yield savings account, moving cash around to take advantage of bank bonuses, and buying short term Treasury Bills.

Investing Money In Your 20s Summary

No matter how you decide to invest money in your 20s it’s important you choose a strategy that works for you. Before you start investing, make sure you know the options that may give you free money to start investing. This includes things like a 401k employee match and RSUs. Other important considerations? When you’ll need the money, your risk tolerance and how much time you want to spend.

Investing money in your 20s is hard when you don’t have as much money and it’s new. Like everything, you’ll learn from your mistakes and get better over time. Even if you buy a bad stock, or sell a good stock early it’s better to learn these lessons when you have less money at stake.

Different strategies work for different people. Investing when you may need the money for a big purchase in the next 5 years is different than investing money when you don’t need money for 20 years. Different people also have different risk tolerances. If you’re going to lose sleep worrying about losing money in the stock market a lower risk, set it and forget it strategy may be more aligned to your goals.

How My Stock Investments Performed in 2020

01.02.2021 by admin // Leave a Comment

Up until now, I haven’t share anything on my blog about my personal investments. On occasion I tweet I own a stock in excitement. With the shutdowns, this ended up being my main hobby in 2020 so I decided, why not do a recap of how my stock investments performed this year.

Most of my top positions were actually purchased in previous years. I’ve been investing in the stock market for over 10 years, saving a large percentage of my salary, and focused on growing my career for the last decade. As a result, my portfolio was incredibly painful to look at in March. I was also able to enter new positions with cash I earned throughout the year. Below is my strategy for how I decide to invest, how each of my stock investment accounts performed, some of the new stocks I bought this past year, some of the stocks I trimmed / sold and lessons learned.

**Nothing on this blog is a recommendation to buy, sell or hold a stock. This information is a recap of my own investment performance in 2020 only.**

How I decide What Stocks To Invest In

Investment Strategy

If you’re looking for a formula on what to invest in, you’ve come to the wrong place. I don’t look at technicals unless someone tweets it. Sometimes I’ll browse their P&L or 10K but not often. I try to avoid trading during their earnings weeks but don’t do any trades on earnings. I’ll skim articles about a companies earnings call and the key points from the CEO or CFO. Mostly though, I invest in companies I believe in and companies I personally use. I bought $PTON, $PINS, $ZM, $WORK and $REAL in 2019 because I am a consumer of all of those products. I did not think at the time that many of these would be strong work from home stock plays should there ever be a pandemic.

Investing in Technology Companies

Now, what about investing in tech companies? Surely I don’t use all of these products? That’s correct, but my career is in tech. As a result, I am familiar enough with many of these companies and technology trends. I’ve worked in tech for the past 10 years and in cloud computing for the past 5 years. I also have been working remotely for several years and know what software I’ve used to stay connected. Not only can you make a good salary working in the technology sector, but it also helps you with investing.

Investing in International Companies

My strategy for investing in international companies is pretty straightforward. If I like a company in the US or believe in a trend (ex more shopping moving toward e-commerce) I’ll look for what companies are part of that trend in other countries. This past year this strategy has primarily focused on buying e-commerce sites that operate in other countries.

Investing In Companies Someone Else Recommends

Sometimes I’ll get a text or see a tweet about a company not on my radar. Back in mid- late March I would write it down and research it on the weekend. Clearly, I missed a lot of gains by waiting to research during that weekend or the following. Now, sometimes I’ll buy a stock without any due diligence. Yes, it’s risky but I buy very, very little so the downside is minimal.

On the trading platform I use I’m able to then click the stock ticker and see all of the analysis they’ve done on that company as well as recent news, dividends, earnings and share profile. It makes it easier to track the companies on my watch list in one place and have easy access to key information.

Investments Performance by Portfolio

I have a total of 4 investment accounts: a taxable account, a Roth IRA account, a 401(k) account through my employer and an account for my vested RSUs through my employer. My taxable and Roth I have an advisor for and we have a strategy for those two accounts combined. Most of my individual stock tickers I buy without consultation and then retroactively ask for their thoughts when we check in. Because I buy individual positions in my taxable, my advisor tends to be more conservative in my Roth to balance that out. To date, my advisors have made all the investing recommendations for my Roth which I approve. I also have several other accounts including an emergency fund in a “high yield” savings account.

Taxable Investment Account: 41% unrealized gain
Roth IRA: 10% unrealized gain
401(k): 18% unrealized gain
Vested RSUs: as I don’t disclose my employer I will leave this only as unrealized gains were over 42%

In comparison, the Dow had a 7.3% gain, the S&P 500 a gain of 16.3%, the Nasdaq a gain of 43.6% and the Russell 2000 a gain of 18.4% in 2020. Overall, I am thrilled with how my investments did. I had quite a bit invested in Feb / March and considering how bleak my portfolio looked in March I am thrilled with this outcome. When I did my quarterly 401k check I changed some of the allocations which resulted in a better 2020 performance. Yes, if I just invested everything in ARKK my gains would have likely been higher. However, what’s the fun in that?

New Individual Stock Positions Started

Being at home 24/7 I all of a sudden had a ton of free time this past year I normally do not have. I was convinced we were in a dead cat bounce in March / April which really hampered my gains. Luckily I had a few friends that got into investing and so we were investing together during this time. I bought way too many new positions to list so here are my top 5 stock buys and my 5 worst stock buys. I never buy a position all at once which is why some of the buys are up significantly more than the whole position.

Top 5 New Stock Positions in 2020

$NIO – I started buying NIO in July at the recommendation of a friend. I am up over 165% but some of the buys are up over 300%.
$FVRR – I started buying Fivrr in May as it was a gig work company I was familiar with from blogging. I wasn’t sure if Fivrr or Upwork was better having never used either so I bought both. I am up over 100% with some buys up almost 250%.
$UPWK – I started buying Upwork in May. I assumed I am up over 170% with some buys up almost 200%.
$DOCU – Docusign was one of the few stocks I actually bought on March 16th. I knew business had to keep going and contracts would need to be signed digitally. I’ve used Docusign before so I was familiar with it personally and have continued to buy as I learn more about the capabilities and direction of the company. I am up over 100% with my initial buy up over 200%.
$JWN – Nordstrom is probably a surprise to most, including myself. I’ve held, and sold, Nordstrom stock in years past. I shop there albeit not often. But, I started learning about DevOps by reading this Nordstrom DevOps Case Study so I knew they had the culture to succeed digitally. The stock looked oversold to me so I started buying shares in August. I figured at that point they weren’t going bankrupt in the near term. The stock continued to go way down before it started rebounding and I sold a little to realize the losses. My full position is now up about 115%, with the top buy up over 160%. Both of these gains would be higher had I not trimmed some of my position at a loss.

Top 5 Worst New Stock Positions in 2020

At times, I have bought the meme stocks in 2020. I see a stock rocket up for no apparent reason and I want some of the action! I was caught bag holding pump and dump stocks. Another mistake was not buying stocks at their at the time ATHs back in the Spring. I thought it was crazy how much a few stocks ran up and waited for them to dip. The dips never came and they kept hitting new ATHs. I had to buy these high conviction stocks at a much higher cost basis, some of which are still at break even or at an unrealized loss in my portfolio.

$NERV – I decided to start buying biotech this year. I noticed Minerva Neuroscience came out with bad news and the stock dropped significantly one day and so I bought a few shares! Continued buying shares at other times. I was down for a while, then up and recent bad news now has this position at a -42% unrealized loss. This is currently the worst performer of my portfolio.
$INO – I also thought it’d be fun to speculate on vaccines this year! I bought Inovio Pharma and actually sold the full position at a gain of over 50%. On a drop I bought back in and bought more as it dipped. It is now the second worst performing position of my portfolio; however, if you count the previous buying and selling I’m at about break even.
$DGLY – I bought Digital Ally during the unrest in the summer and I continued buying bits. I have now fully exited this position and overall probably took a 50% loss.
$MARK – I bought Remark during the reopening back in the Springtime. I thought stores would need their equipment to reopen. At one point I may have been up 40% and at the low down 50-60%. I have started trimming this position and expect to take a 10-20% loss all in when I am fully out. There is still a chance the loss will be greater.
$TTD – The Trade Desk is a stock on many best performing stocks of 2020 lists. It isn’t really fair to include $TTD on the same list as the stocks. I’m including it here though as I learned an important lesson. I got so many texts asking if I bought $TTD throughout the year from friends that owned this stock. It was referred to at least once a day on FinTwit all year. $TTD always looked too expensive all year to me so I held off until finally starting a position in Dec at $937. It is currently sitting as an unrealized loss in my portfolio. At times, a multi-bagger to some is an unrealized loss for others. When someone says they own a stock don’t automatically assume they made a ton of money on it.

Stock Positions Sold or Trimmed

Stock Selling And Trimming Mistakes

Below are my top 3 biggest stock selling mistakes this year. I think it’s important to share some of your mistakes whenever you are sharing some of your successes for context. I didn’t panic sell anything in mid to late March, but I did start selling and trimming in April because I was so convinced the market would crash again.

It’s easy to look at these stocks now and ask why I ever would have sold but at the time my thought was wow, I am finally breaking even again after ~6 months! I had cash available so I did not need to sell any of these to buy other stocks I wanted. All of these I added to my positions over a period of time when it dipped.

$PTON – I bought Peloton in 2019 at starting at $29 and down to $21. Peloton dipped to $17.70 at the lowest in March. I sold close to 40% of my position starting in April at $31-45. I bought back a few shares starting at $85.
$ZM – I bought Zoom in 2019 at starting at $89 and down to $64. Zoom dipped to ~$107 in March. I sold over half of my position at $111 – 202. I bought a few shares back at $345.
$SQ – I bought Square starting in 2017 starting at $38. Square dipped to ~$38 in March. Holding for several years only to break even!! I started selling most of my position at $49-63. I bought a few shares again starting at $143 so I would at least have some position.

These are all stocks I wanted for the long term, yet I panicked at how quickly the rebounded and started selling. There are other selling mistakes such as when I sold FedEx at a loss and it basically doubled within the following two weeks. I also sold my very small SHOP position at $600 and then rebought and increased my position starting at $900. It’s hard to time the market, but with the market so volatile this past year it’s really easy to look back and wish you acted 1 week sooner or 1 week later.

Stock Selling And Trimming Successes

The top two successful selling stories I have are $FUBO and $WORK. I bought $FUBO at $29 and sold at $49. $FUBO was a stock I saw on Twitter and thought, why not. Right now I can call this stock sale a win; however, it is still a possibility I miss out on future gains here if I decide not to get back in and the stock rises above $49.

I held onto $WORK throughout it all. What a rollercoaster ride that was. At times even with my DCA I was 30% down. I bought Slack starting at the IPO at $39 per share and the lowest cost basis I got was $21. It’s easy to think you’ll buy more as a stock dips but it’s hard to see a position down almost 50% from when you started buying and continue to buy more. It was really hard to hold onto this stock in general, let alone buy more. Everyone who also held this with me sold but I stayed steady. When the $CRM acquisition was announced it finally paid off and my position shot up to over 40% gains.

Investment Lessons Learned

Care More About Taxes Throughout The Year

Short term gains are taxed significantly higher than long term gains because they are taxed as income. Usually I only sell stocks I’ve held for longer than a year so I’ve never had to think much about taxes. I had a “worry about taxes later” as I was selling stocks I thought would burst for short term gains.

Come Nov I realized how not only did these stocks rise significantly after I sold, even if the stock stayed the same price it may have made sense to hold for a little longer for tax reasons. One stock I even accidentally sold 2 days before I held it a year so I now have to pay short term gains instead of long term gains. I need to really give some thought to my tax strategy in 2021.

Do Not Benchmark

One thing I learned trading stocks in 2020 is to not benchmark. If you’re going to make data driven decisions learn about the technicals, read the 10K, listen to the earnings report. Do not make decisions based on what you bought a stock for or a recent low and compare that to the existing stock price. For example I bought Peloton in the $20s. It then dropped from almost $30 down to $18! Then, quickly rebounded to $30! In my head I was like phew, it’s now doubled from the low and I am a little over break even on my highest cost basis. And I began selling quite a bit because I thought the whole market was going to crash again. We all now know now how bad that decision was.

I also made a spreadsheet of all of the stocks I wanted to buy around March 20th. But, I put in the spreadsheet what the low was in March for each stock ticker. And then, put my target at or below that price. Obviously we did not hit those lows again and I had to buy the stocks I wanted at way higher prices. I kept waiting and those lows never came!

Its OK to Buy at All Time Highs

I first found out about $LVGO from a fun stock picking contest Dividend Farmer ran on Twitter back in May. $LVGO was up an insane amount every time a contest update was posted. I finally threw in the towel and bought a few shares even though it was at a ATH. And then the next day it hit another ATH and the next day another ATH! You get the trend. So, I started buying it in bits after learning more about the company during the weekend and every new buy was pretty much a new ATH for the stock. Even though I always felt unease buying at an all time high it kept rising and those initial buys were still at great prices.

Don’t Sell Your Winners

Why, why, why did I sell so much of my Peloton, Zoom, and Square shares? Some of those shares would now be up ~500% from when I sold!!! I believed in these companies way before there was even a pandemic and the pandemic accelerated their sales. I continued to believe in them and buy more shares while they dipped 20%+ in 2019 while there were a ton of naysayers out there. Flawed logic convinced me these stocks would struggle in the short term, the market was going to crash again and I could sell and get back in at a cheaper price. Then, I didn’t want to buy back because I had sold at a lower price. Expensive mistakes.

Don’t Time The Market

This is advice given everywhere, but I tried to time the market with some of my winners and failed miserably. It’s been a good reminder to keep my day job and not try to become a day trader. Moving forward I will not sell positions I really believe in with the intent to get back in when they drop.

And that is a wrap on my investments returns in 2020. I’d love to hear how you did and what your favorite tickers are for 2021 and beyond!

2023 Passive Income Opportunities: 10 Ideas to Boost Your Earnings

05.17.2020 by admin // 2 Comments

Ways to make passive income, passive income ideas 2020, passive income 2020, top 10 passive income investments

Passive income is a great way to earn money without having to actively work for it. Whether you’re looking to supplement your current income or achieve financial freedom, there are many opportunities to earn passive income in 2023. From earning interest through high yield savings accounts to participating in Employee Stock Purchase Plans (ESPP), the options are endless. Below are the best passive income ideas for 2023, each with the potential to help you boost your earnings.

Use A Cash Back or Rewards Credit Card

One very easy way to start a passive income stream is to get a cash back or rewards credit card. This doesn’t mean spending additional money. What it does mean is to generate dollars, or rewards points, from the money you are spending anyways. If you need extra cash in your pocket, choose a rewards credit card that allows you to redeem points for cash. If you don’t need the cash, the credit card can help reduce your spending because you can now use points to buy things. Instead of spending more money, save the money you would have spent.

Put Your Emergency Fund and Savings In A High Yield Savings Account

Every dollar you save, whether for investing or for an emergency fund, should be generating additional income for you. Any money you have saved for an emergency fund or for investing later should be held in a high yield savings account. While the high yield interest rates don’t yet match inflation rates, most interest rates are now at or above 3.30% APY. Not sure where to put your money? Nerd Wallet shares the top 10 best high yield savings accounts.

Buy Short Term Treasury Bills

A Treasury bill, also known as a T-bill, is a short-term debt obligation issued by the U.S. government. Treasury bills have different maturity time frames including 3 month, 6 months, 9 months, a year and longer fixed timeframes. Treasury bills are considered some of the safest investments because they are backed by the U.S. government. Short term treasury bills are easy to buy are now above 4.30% APY.

Open Up A New Bank Account And Get A Signup Bonus

Bank bonuses have finally started returning. Usually there are conditions like a minimum deposit amount, setting up direct deposit or holding the money in the account for a set amount of time. Make sure you understand the terms and conditions when deciding what new accounts to open. Money Crasher’s has a list of 31 bonuses banks are running now, with bonuses up to $300!

Open Up A Certificate of Deposit

A CD (certificate of deposit) locks up your money for a set period of time but guarantees a return. If you’re just starting out and have fully funded your emergency fund a 12 or 18 month CD is a good place to start (assuming the rates are higher than a high yield savings account). It’s good investment to start with as you get to learn about illiquid investments but you know when you’ll be able to take the money out and it won’t be held for long. Don’t have a preferred bank? Here are the best rates for CDs right now.

Invest in the Stock Market

Stocks are a way to build wealth passively. Stocks are a type of investment that represents ownership in a company. Investors buy stocks that they think will go up in value over time. Investors don’t make (or lose) money until they sell the stocks they buy. There is no guarantee that the stocks investors buy will go up in value. This is true in any market, although it is more often talked about when there is a lot of market volatility. Don’t worry if you only have a little amount of money to invest. You can open up a trading account on Robinhood with $0 and can buy fractional shares of a company. Starting June 9th you can buy fractional shares of top companies on Charles Schwab with as little as $5. If you’ve never invested in the stock market before learn how to start investing.

Invest in Dividend Stocks

Dividend stocks are stocks that offer a discretionary distribution of profits. When researching stocks you’ll know if a stock is a dividend stock if you see a yield greater than 0. Dividends are paid out on a monthly, quarterly or yearly basis. Investors need to own the stock on the ex-dividend date in order to receive the dividend payment. Stocks that pay dividends typically provide stability to a stock portfolio but do not outperform high quality growth stocks according to Investopedia.

Invest in Real Estate Investment Trusts (REITS)

Think of a REIT like a mutual fund for real estate. REITs is a type of company that allows investors to pool their money to invest in real estate. In order to be considered a REIT, the company is required to pay out at least 90% of their taxable income back to their investors. That is what usually makes REITs a great investment to generate passive income. It’s important to be aware that in these tough times tenants may not be able to pay rent so before you invest in a REIT know who their top tenants are and what risks they may have in their portfolio. Already several retailers have announced bankruptcies such as J.Crew and Neiman Marcus. Investors should understand if the REIT they are investing in has exposure to these businesses or other retailers that may be at the brink of bankruptcy. Learn more about investing in REITs here.

Participate In An Employee Stock Purchase Plan (ESPP)

ESPP is a benefit offered by some publicly traded companies to their employees. ESPP is the ability to purchase company stock through payroll deductions at a discounted rate.

The effort required is minimal and requires enrolling in ESPP and selling the shares to realize gains (or losses). You have a guaranteed return if you sell the day you receive the shares. If you decide to hold the shares for longer, and the shares increase in value, it will help you accumulate wealth. Companies can offer a maximum discount of 15% on company shares. With current savings accounts interest rates at best at 1.3% APY, and average stock returns at 5-7% a year, but not guaranteed, this is a great deal.

Participate In A 401(k) Company Match

A 401(k) company match isn’t money you’ll be able to touch until you retire, but it’s another way to generate income without extra effort. 401(k) plans are retirement savings plans sponsored by employers that allows employees to contribute to their retirement savings pre-tax. Many employers also offer to match or partially match employee contributions. Learn more about 401(k) plans including tax benefits, employee company match and accelerating funding your retirement.

Invest in Startups

According to Fortune, while the number of U.S companies continues to grow, the number of U.S. companies that are traded on stock exchanges has plunged 45% since peaking 20 years ago. Additionally, new companies have been completely disrupting traditional business models but many of these companies aren’t yet public. If you only invest in public companies, you are limiting your investment options more so than previous generations.

Additional Ways to Increase Your Income

Often you’ll see blogging, investing in real estate and flipping items on eBay referred to passive income streams. Yes, these are all ways to make more money. However, all of these options require a lot more time and effort to see the payoff. Becoming a landlord isn’t just buying the real estate, getting a tenant and collecting a check. A passive income stream is truly a set it and forget it. If you’re willing to put in more effort, learn about how to make money fast with a side hustle.

What are ways passive income ideas you’ve used in 2023?