Can you become rich with interest or dividend? When you invest your money into savings, you will earn interest on the amount you put in and no matter how low the interest may be, it can still produce a substantial amount of passive income. It is the same with any other investment instruments like stocks, bonds or unit trusts. You choose them simply because it can give you a higher rate of return.
Making money on interest
A $10 million in the bank with 5% interest per annum will generate an annual passive income of $500,000.00 which is $41,666.66 per month. Isn’t that a lot of money? Well, most of us can forget about this option not until when we have a lot of money. You need money to make money.
Compounding on your interest and principle sum
You are also able to make money on the interest earned base on compounding. You earn interest on the money in your account, plus on the money you’ve already earned on interest earlier. It may look small at first, but over time, the results can be staggering. Use the “rule of 72” to see how fast you money will double up.
Making periodic investments
You can invest a small amount your money on a regular basis. This option is good for those who just got started working. Time is on your side and it takes discipline to work it out. Generally the employee’s provident funds and life insurances work on this concept. However you can also buy stocks, bonds or unit trusts on a regular basis to achieve the “dollar cost averaging” regardless of the market conditions, you can achieve a better returns then what the banks are offering.
Spending money is easy part; it is always tougher to save it. However small the amount may seems to be, you can choose to earn more money by learning how to put your money to work for you. The more money you have, the more options will be for you to invest and grow your money. As a matter of fact, it is true that the rich do get richer.
Every investment instrument offers a different risk and return. Savings is the safest but offers the lowest return. Bonds and unit trust may be better options for you. And if you have the stomach for risk, you can achieve very good returns investing in the stocks or options. Whether you choose, it is always wiser to do your home work first before you jump into it. It is your money that is at risk.
“Compound interest is the eight wonder of the world” - Albert Einstein
Lately there are a growing popularity in options trading .