Most of us are stuck in this cycle: we earn money from working five days a week, spend it all on something, and then we end up twiddling our thumbs while waiting for the next paycheck. It gets tiring at times, doesn’t it? But it doesn’t have to be this way. There are many ways to increase your income and eventually help you become financially independent. All it takes is guts and careful attention on your part.
1. Put your earnings in long-term deposits.
Your money yields more when you invest them in banks as long-term deposits. The annual interest rate ranges between 2 to 3% depending on the bank, so go for those that offer higher interest rates. Term deposits also preserve your savings, especially if you’re a compulsive spender. You can only deposit but not withdraw money for a certain period.
Ideal for: Savings account holders who will not use the money for any immediate need.
Not ideal for: People who need cash immediately. In such cases, they can choose to gofor a normal savings account.
2. Set up a small business.
If you have much time, talent and capital, why don’t you set up a small business? Use your talents and hobbies to come up with a unique business that will hit with a certain market. Or get a food cart franchise and put it in a good location. This will give you an income without leaving your day job. You increase your earnings for now, and soon the business may grow and you can focus on it full-time.
Ideal for: People who want additional income and don’t mind working for it even while they continue to do their day jobs.
Not ideal for: Those who want a stable income minus the risks. They should stick to being an employee.
See also: 8 Hobbies That Can Earn You Money
3. Exchange your savings for government bonds.
Government bonds have higher interest rates than term deposits. Bonds are safe ways to invest your earnings, as well. The government always issues bonds to raise funds for its projects. Should they run out of funds, they can always get more from taxes to pay their obligations. On the downside, government bonds take years before you can enjoy the returns. These provide smaller yields compared to other investment tools like stocks. Visit the Philippine Bureau of the Treasury to know more about Philippine government bonds.
Ideal for: Investors with a window of 5 years or less. Some bonds mature after 3 years with good returns.
Not Ideal for: Investors looking for short-term yields.[crp]
4. Buy company stocks.
For maximum returns for your savings, invest them in stocks or equities. Earnings from stocks depend on the company’s performance. Most companies give dividends, which is extra income for you. Buy stocks if you have lots of capital and you are willing to take risks, since their market value changes drastically. Though stocks are risky investments, you can still get more money with the right timing, research and strategy. There are companies that offer stocks if you want to give them a shot.
Ideal for: Investors who like to take risks for high returns.
Not ideal for: Investors who don’t like risks. They should go with time deposit instead.
5. Invest in insurance companies.
Insurance companies are smarter and more sophisticated these days. Not only do they provide funds in case of your demise, but they also offer opportunities to grow your funds and enjoy them anytime you want. Those who don’t monitor the stock market often go to insurance companies. These companies have fund managers who ensure their returns on investment. Most are big players in the stock exchange so it’s safe to put your money in their hands. Talk to financial advisors to know the advantages of investing in insurance companies.
Ideal for: People who want long-term investments.
Not ideal for: Investors looking for short-term yields.
With the rise in everyday living costs, there may be times when your income won’t be enough to cover your expenses. There are many sources of passive income to pursue if you take risks and think outside of the box.
Featured image by Sanja Gjenero via FreeImages.com
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Kim is a 24-year old writer. She reads books of varying genres and even Japanese manga. You'll have a food trip and travel buddy with Kim. She dreams of traveling around the world and writing her magnum opus someday.