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5 Smart Ways to Invest Extra Capital


Financial windfalls may not happen all that often, but when they do, they present an amazing opportunity. For individuals who are used to penny-pinching and sticking to a tight budget, a little extra cash can make a huge difference –– provided you know how to maximize your investments. With that in mind, today we’re going to share five savvy ways hard-working professionals can re-invest extra capital to ensure their financial standing well into the future. Check them out here:

Developing Credit

Taking out loans, utilizing credit cards, and borrowing on your line of credit are all reasonable steps to pay bills and manage your finances. Still, it can be difficult to build credit if you’re constantly struggling to pay off debts. As such, it makes a lot of sense to use any extra money you may have to settle a few accounts and boost your credit. Don’t assume that because you have bad credit now, you’ll be saddled with bad credit in perpetuity. It actually doesn’t take that much time to rebuild a credit score.


Sometimes in order to move forward, you have to take a step back. Going back to school can offer professionals the opportunity to improve their position at their company or within their industry. Whether they’re simply looking to boost workplace productivity or cultivate new skills, professionals can benefit massively from investing in their own education. While it may not seem like the most exciting way to spend a surplus of cash, the value of solid education is priceless. 

The Stock Market

Playing the stock market is an arduous task –– especially for beginners who lack the  experience of managing multiple stock options. Still, by learning to avoid a few risky stocks and sticking to a well-conceived and balanced plan, professionals can turn a little extra dough into a substantial return. (Pro tip: diversify your stocks to prevent major losses.)

Physical Possessions

Don’t feel like playing the market? Then you can always consider purchasing certain items that tend to retain (or potentially appreciate) in value. Fine wines, jewelry, and classic cars are all high-quality purchases that are generally less risky investments (if maintained) than investing in stocks on your own.

Set it Aside 

Remember, there’s nothing wrong with simply tucking away extra funds in the bank for a rainy day. You’ll still be able to gain interest on your investment, plus you can draw out extra cash whenever you need it most. It may seem obvious (and a little boring), but it’s still a great decision to put your money in the bank!

How to Prepare Your Finances for Retirement


How will you spend your retirement? Do you want to travel or simply enjoy the freedom of time at home without worrying about work? The sad reality is that if you’re like most Americans, it might not happen. 78 percent of Americans are “extremely” or “somewhat” concerned about affording a comfortable retirement. Nearly two-thirds worry that they’ll outlive their retirement savings, yet three-quarters aren’t confident they’ll receive Social Security benefits. A third of baby boomers, the generation nearing retirement, have $25,000 or less in retirement savings. The future might look bleak, but preparing today can help you secure your ideal retirement.

Choose the Right Retirement Fund

Image via Flickr by kenteegardin

Preparing for the future starts with selecting your retirement fund. Retirement funds take the guesswork out of retirement saving because they’re professionally managed by financial experts. All funds aren’t created equally though.

Some funds combine a variety of investment options, including stocks and bonds, into one user-friendly package. Users then withdraw an amount they set each month. These low-risk retirement funds don’t make a substantial profit but they’re very stable, so they appeal to risk-averse investors, especially those nearing retirement.

Managed funds provide a set monthly income during retirement. This monthly payout is typically reassessed each year, depending on the fund’s performance. There are low- and high-risk managed funds. Income-replacement funds, which pay out at a designated date, are another good retirement option.

People nearing retirement typically want security, but people planning their retirement early can afford to invest in high-risk retirement funds. These funds have a higher potential payout but may also fail. The risk is often worthwhile for people with enough time to generate more savings before leaving the workforce.

Consider how funds allocate their assets, their payout structure, associated fees, and risk to determine the best one for your needs.

Diversify Your Investments

While retirement funds provide a solid base, you shouldn’t rely on them completely. Diversifying your investments is the best way to protect your retirement savings against drops in different markets and to maximize your nest egg’s growth. Consider purchasing bonds, investment properties, and stock trading to diversify your retirement strategy. Again, the more time you have until retirement, the more risk you can take.

Create a Realistic Retirement Budget

A clear retirement budget gives you a clear goal for your retirement savings. Consider how much you’ll realistically spend on everyday expenses like groceries and utilities, as well as indulgences like travel, restaurant meals, and entertainment. If you haven’t paid off your home or don’t think you will before retirement, mortgage or rental expenses should also be factored in. Then consider your income, including retirement savings and Social Security payments. How long could your nest egg sustain you? Will you have enough to retire when you want to? And if not, what can you do to increase your retirement savings?

Reevaluate your retirement budget every year or so until you leave the workforce, as the cost of living, Social Security payments, and other factors will change over time.

So many Americans aren’t ready for retirement because they don’t plan ahead. In truth, you’re never too old to start thinking about your golden years. Put a financial action plan in place today in order to enjoy the retirement you’ve always dreamed of.