Investing in the stock market can help you earn a lot of money over time, and it’s not as difficult as you might think to generate a substantial amount of wealth.
However, it’s important to ensure you are investing in the right stocks. With the wrong investment, you could possibly lose more money than you gain. But with the right investment strategy, you can double your money relatively easily. Here are three simple ways to achieve that goal.
Earn employer matching 401(k) contributions
Contributing to your 401(k) is one of the smartest and easy ways to start investing in the stock market, and employer matching contributions can help your money grow faster. Please note thaht Not all employers offer matching contributions, but if you are eligible enough, they’re an a greatway to double your savings with zero effort.
Say, for example, you’re earning $100,000 per year, and your employer will match your 401(k) contributions up to 3% of your salary. That comes out to $ 3000 per year in matching contributions, and whatever you contribute up to that point will be doubled by your employer.
To make the most of your 401(k), it’s a good idea to contribute good enough to earn the full match. Otherwise, you’re leaving free money go.
Reinvest your dividends
Dividend-paying stocks are investments that pay you to have them. Some companies opt to pay a share of their profits back to shareholders every quarter or year, and that payment is called a dividend.
When you receive dividends, you can either use that money right away or reinvest them and buy more of that particular stock. It may be tempting to cash out to receive your money immediately. However, reinvesting your dividends is mostly a smart long-term strategy.
The more you reinvest, the more you can potentially earngoing forward. Reinvesting your dividends will allow you to own more shares of stock. Assuming company and stocks keep growing in future, the more shares you own, the larger your future dividend payments will be. Reinvest that money again to buy even more shares, and the cycle seems to be logical .
Reinvestment of your dividends can help you grow your portfolio without investing additional money from your side. Then once You start getting a decent amount of money in dividends, you can start cashing them out to have a source of passive income.
Effect of compound interest work its magic
Compound interest is what helps your money grow over time. You’re essentially earning interest on your interest, so the more time you have to save, the more you can potentially earn.
for example, if you are investing $100 per month and earning a modest 7% annual rate of return on your investments. Here is approximately how much you would have saved depending on how many years you let your money grow:
Number of Years Total Savings
Your funds will grow exponentially when it has more time to compound. In this scenario, your total savings double roughly every 10 years . By starting to invest now and sticking with it over the long run, compound interest can do its job and help your money grow faster.
It’s very much possible to double your money by doing stock market investment, even if you lack share market experience. By taking advantage of any of these strategies, you can earn more online money than you may think.