Building wealth is not an easy goal,
especially if you are starting from a very low base. Fortunately, part of the
American dream is that there are so many opportunities in this country to be successful,
and the path to thriving can look different than you might expect.
Securing a brighter financial future is
typically a top priority for residents of Phoenix, Arizona. Generating income
lets you live the lifestyle you desire while saving for retirement and
potentially leaving a legacy behind for the next generation.
The challenge is figuring out how to
build wealth smartly without risking your current resources. That means knowing
how to invest your money wisely. Here are some ideas for smart investments to
make in Phoenix, AZ.
Put Money in a CD
Supplementing your primary income is one of
the most effective ways to build wealth over time. Many of these supplemental
income sources can be passive, so all you have to do is find them to start
increasing your resources. A certificate of deposit (CD) is a great short-term
solution for generating some extra dollars with the money you already have
saved. Instead of having your money sit in a low-yield savings account, a CD
locks up your money for a set period such as six months, a year, or three
years, and then pays out decent returns guaranteed as long as you do not
withdraw any of the money for the whole term. The interest rates on CDs are
significantly higher than most savings accounts, so if your money is just going
to sit there anyway, it might as well earn a bit more for you in a CD.
Invest in Rental Property
If you have a lot of resources and you
want to increase your income streams, then investing in rental property can be
a great long-term solution. Rentals are a hot market in Phoenix, especially
with younger generations who are hesitant to take on mortgages. Even
vacationers who are traveling to Arizona may want a place to stay that isn't a
hotel. Either way, securing a rental property can yield consistent income from
guests or tenants that more than covers the mortgage and utility costs of the
home. You could invest in a luxurious vacation rental with jumbo loans in Arizona, or you could turn part
of your home into a separate living unit. Either way, tenants and guests will
pay to occupy the space and provide you with a solid income stream.
Install Home Solar Panels
Clean energy technology is slowly
becoming more efficient. With a source of energy on your property, you can
dramatically cut costs for electricity consumption. Although solar panel
installation can be expensive in the beginning, the long-term payoff is often
worth it. First, every month's utility costs will be lowered going forward.
Second, there are many tax benefits provided by the government for solar panel
installation, so you can take advantage of them when tax season
comes around. If you ever sell your home in the future, buyers will likely be
attracted to the fact that your home has a clean energy source, so they may pay
more. Plus, few states are as sunny as Arizona, so you will be getting plenty
of energy production from these panels.
A real estate investment trust (REIT) is
a great way to grow money slowly and reliably. The property market in Phoenix
is very healthy, with a growing job market and population. Certain firms in the
area invest in properties across the city to build diverse real estate
portfolios. They get funding for these investments from shareholders like
yourself. These are people who do not want the headache of managing a real
estate portfolio but still want the consistent dividends that can result from a
smart strategy. Plus, investing in property directly is far more expensive than
putting your money into a REIT.
Design a Home Office
The work-from-home mentality has quickly
invaded the minds of the collective workforce in the last few years. Many
workers now know their jobs can be done from home, and Arizona employers are
recognizing this fact as well. Maybe you are looking for a full-time job as a
marketing professional. Perhaps you are a stay-at-home parent who would like a
side gig. If you plan to work from home, then you need a place to concentrate,
and what better way to do so than by designing a home office? You can create a
great desk setup with dual monitors and ergonomic seating for the most
comfortable setting, all while staying secluded from the rest of the home to
avoid distractions. With a home office, you can be more productive and
successful at your job or side hustle.
Make Your Money Work Toward a Better Future
Everyone has to work to earn an income,
but your money can work for you as well. Turning that money into more money
leads to a more secure financial future. Whether you choose to put your money
in a CD, invest in rental properties, or design a home office for greater
productivity, using your resources wisely is the best way to improve your
finances going forward.
Investing in real estate entails certain risks, including changes in: the economy, supply and demand, laws, tenant turnover, interest rates (including periods of high interest rates), availability of mortgage funds, operating expenses and cost of insurance. Some real estate investments offer limited liquidity options.