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Motherly Advice And Tricks On Investing Your Money

Women, especially the stay at home moms, feel they have to choose between making an income and staying at home taking care of their kids. When done right, stay at home moms can always have a consistent passive income with little effort to maintain it. This is one of the benefits of investing, you can live off the money you make through passive income.

 

First, you have to build your pot of money that you use to invest, which is called as your principal. When you invest money, it takes time to grow. After you invest it, you must let your investment grow, and the profit that you make each month would consist your passive income.

 

It takes about 10 years of successful investing to get to a place where you can live off your passive income. Investing, whether it be real estate or another type of investing (and there are many), is something we can teach girls at a young age. If you start when you’re 17 then you will be up and going by 27. Now that’s not to say all is lost if you’re beyond 30.

 

This takes planning, but it is never too late to start. You may want to consider hiring a professional help to advise you about your money, especially if you are new to investing. You may want to take small steps with the professional advisor so you can get to know each other before making any big decisions.

 

More importantly than hiring professional help is to know what your financial advisor is doing. There are a lot of fast talkers and they will show you charts, websites, and research to prove their point. Unless you know what’s happening in the market and how that particular investment works, you’re putting your savings in someone else’s hands. The reason you’re probably hiring a financial advisor is because you don’t have the time to learn all of this on your own, but knowing the basics of your investments is essential.

 

You don’t need to have millions of dollars in the bank to create a lifestyle as an investor. You just need to create enough passive income to cover your expenses each month. Most basic expenses include rent/mortgage/home repairs, transportation, utilities, food, entertainment, clothes, medical, insurance, charity and savings. And if your partner is taking on the responsibility of these expenses with you, these expenses are divided. When you calculate how much you need to make in passive income each month, you just need to calculate how much is needed to cover your expenses.

 

Combine career breaks with a persistent wage gap, and by the time women make it to their golden years, they’re usually far less financially prepared for retirement than men of the same age. Call it the motherhood penalty, because that’s how it often starts. Mothers are more likely than fathers to take career breaks or work part-time for a few years to take care of young children.

 

It’s no surprise then that the research shows women are more likely to be impoverished in their golden years than men. A 2016 study by the National Institute on Retirement Security found women are 80 percent more likely than men to fall below the poverty line at age 65 and older.

 

So, let us start

 

One important aspect is to consider is whether or not you have the assets put into your name. Each financial relationship is slightly different and in some households the working partner doles out a monthly allowance to the partner staying home, but all other financial decisions such as investing, retirement, and home ownership is handled by the working partner. It is important that you both share ownership of the assets. This will protect you in the future. This means that both of your names should be on the deed to the house, to the cars and to major financial accounts. You are a contributing member of the family. The work you do is valuable, and you should not allow yourself to be short changed just because you are not bringing in a paycheck.

 

CDs

What are CDs and how can they benefit you? CD stands for certificate of deposit and is considered one of several good ways to invest money.

It’s a low risk investment people use when they want a small return on the investment without the worry of losing their money.

A CD is a deposit account, similar to a savings account, but with a higher yield on the interest. You might invest your money at a certain interest rate and then the bank pays on the account periodically. When they pay, depends on the length you have the investment for.

The major benefit to investing with a CD is that it’s FDIC insured as long as you are with an FDIC enrolled bank. The longer you leave your money in the CD, the higher the rate of return and there can be some penalty fees for withdrawing your money early.

CDs can be purchased through an investment broker or directly from the bank. If you are looking for the safest way to invest money, CDs are a great option.

 

 

 

Stocks

Another safest way to invest money is to diversify. Don’t put all your eggs in one basket! Stocks could be a different answer for the stay at home mom searching to find good ways to invest money.

How do you choose which stocks to invest in or how to even go about doing it? There are four major ways: 401k plans, one of the Roth IRAs, a brokerage account, or a direct stock purchase plan, sometimes called a DRIP.

Then you’ll need to decide what type of assets you might use to invest in the stocks. For example, you might invest using common stocks (business ownership), preferred stocks, bonds, money market accounts, or real estate investment trusts.

Sound confusing? It can be, but a good investment advisor can guide you to work you can best financially afford. Let’s say that you don’t have a lot of money to play with when it comes to stocks, but you are still interested in investing. Check out ShareBuilder.com. When you are looking for good ways to invest money, this site can help. It walks you through how to invest your money using on line tools.

You can set up automatic investments and buy and sell stocks in real time during the course of the stock market day. It can help set up IRAs for retirement, as well as, open checking and saving accounts, too.

 

 

 

Every stay-at-home mom knows that being on the outside of the traditional workforce does not exempt you from planning and managing your long-term financial future. In fact, it usually means you have to work even harder and know even more because you don’t have essential investments managed for you on behalf of your employer.

Even if you have a partner that regularly contributes to their own employer-sponsored investment opportunities, you may not be doing enough. You still need to take additional steps to ensure that you are financially secure now and in the future.

 

 

Long-term Stocks

Investing in stocks is a great way to pad your other investments and savings. One benefit of having a stock portfolio outside of your IRA is that you can use it without penalty if you are not retirement age. It will typically grow faster than a traditional savings account (over the long-run), so it is a better home for money that you don’t plan on touching for 10-20 years.

One of the great things about investing in stocks these days is that you no longer have to hire a stock broker to do it for you.  There are great online companies that let you manage the whole process (and most of them can also offer you advice if you end up wanting a pro to help you out). If you go this route, my recommendation is to start with TradeKing (I’ve been using them for about 8 years and have been really happy). They have some of the lowest trading costs in the industry, which means you can start out investing in really small amounts without it costing you a lot.

There are literally thousands of stocks to choose from, but you want to do your best to choose stocks that are likely to perform well over a long period of time.  I try to invest in companies that have strong, regular dividend payments that I automatically reinvest for more shares. Some investors disagree with this because you are taxed on dividend payments, but these companies are typically safe, strong, and financially secure. In my opinion, they’re the best.

 

 

 

Real Estate

Long-term real estate investing is a big undertaking, so it’s definitely not for everyone. But I do think there’s a reason that stay-at-home moms in particular should consider it – when done right, it will eventually become a source of reliable passive income.  And when you transition to a one-income household you are putting all of your eggs in one basket, so this is a great way to hedge against that.

There’s another reason this is a great option (and not just for stay-at-home moms). When you invest in long-term real estate with the intention of renting out your properties, your tenants are covering the cost of the mortgage and maintenance (not you).  You will need to make sure that you have set aside enough money to cover anything major and unexpected, but almost all of the cost will come with the setup. If you can find and hire the right people, this is a great set-it-and-forget-it investment.

 

Preparing and managing all of these investments can be overwhelming, which is why it’s important to just get started and set reasonable goals. We all know time flies, so it’s better to take advantage of that than be caught off guard by it.

 

 

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