College 101: Digging for Dollars
I recently heard someone on the news talking about making money from your money. What does that mean? I always thought the only way to accrue money was by getting paid. Now I am interested in learning about the different things I can do with my money. Is it possible to earn more without having to work for it? It feels like it’s too good to be true.
You’re right, just getting money from money is a little too good to be true. But what you heard on the news isn’t false, either; it is possible to make the money you have increase. There are certain strategies to do this, and you have to be smart about it.
Probably the most popular method of earning money from money is by investing it. While the term “investing” can simply mean spending your money on a product or service that will have a lasting impact, such as a really good pair of shoes or a college degree, it can also mean putting money toward ventures that might eventually earn you more money that you initially put in. One method of investing is through buying stocks. Stocks are shares in a company, such as Walmart. When you buy a stock, you own a portion of the company, and as the company makes money, so do you--and when the company loses money, so do you. While many people choose their own stocks, many others use a third party to help them. A simple way to do this is by putting some of your money into special savings accounts, such as a mutual fund or an IRA account. This allows experts in the field to buy stocks on your behalf.
Another way to get a little extra money is to put it in a savings account or a checking account. Over time, your savings will accrue interest. Basically, the bank borrows money from these accounts and then pays you back with extra money attached. Banks can also set up mutual funds, IRA accounts, and CDs for you. You should know, though, that you often need a substantial amount of money to start these accounts, and you also usually need to prove that you have a steady sort of income.
If you’re up for trying something fun and risky once or twice, you could always try gambling. Investing in stocks and new business is, essentially a type of gamble after all. Going to a casino can be a fun getaway within itself. Be careful, though; gambling is definitely risky. Take a look into state-regulated casinos, which, responsible casino owners tell us, are safer, more legal, and often give back to the community, such as directing their profits into scholarships.
Some people don’t want to take any risk at all. They don’t trust the bank system. They would rather have cold, hard cash on them all the time. You can also simply keep gold on you. While the American dollar gains and loses value, precious-metal investors tell us that one of the facts about gold is that it is more immune to the fluctuation of the market cycles and therefore a more stable method of keeping your money.
I love money. I love everything about it. I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gasoline powered turtleneck sweater. And, of course, I bought some dumb stuff, too. --Steve MartinSubscribe to The Daily Cardinal Newsletter