3 Great Ways to Invest Your Savings (If Your Business Hasn’t Yet Made You a Millionaire)

3 Great Ways to Invest Your Savings (If Your Business Hasn’t Yet Made You a Millionaire)

So I'm here to report three great ways I've found to invest your savings that may work for you if your business hasn't made you a millionaire (yet): 1. These folks are a group of investing enthusiasts and Vanguard diehards who swear by a single investment strategy: the three-fund portfolio. Buy a house with an FHA loan or traditional mortgage; then rent it out. If you have never bought a house before, you can use an FHA loan to pay as little as 3.5 percent down for a 30-year mortgage. With an FHA loan, you have to put down only $10,500 (3.5 percent), as opposed to $60,000 (20 percent) with a traditional mortgage. So, by the time you pay off the mortgage, you’ll have paid more with an FHA loan than with a traditional mortgage. Here’s the very speculative up-side: Depending on where your home is located, renting out as much of it as possible could help you pay off your mortgage in full while you still turn a profit each month. Here’s one for all the internet-based business owners out there. If you move to Puerto Rico and establish Puerto Rican tax residency, you can apply for consideration under the Puerto Rican government's Acts 20 and 22, which reduce your income tax to 4 percent and your capital gains taxes to 0 percent. Aside from the benefits of living on a Caribbean island, you don’t need any employees in Puerto Rico to get these filings, and you can remain a U.S. citizen.

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Here’s a money-making idea you perhaps haven’t thought of: Buy a house. But don’t live in it. Rent it.

3 Great Ways to Invest Your Savings (If Your Business Hasn't Yet Made You a Millionaire)

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As business owners, we get really good at all sorts of things, like branding, marketing, sales, account and project management. But one skill many new business owners are lacking in is how to manage their finances.

Related: 7 Quick Ways to Make Money Investing $1,000

This isn’t surprising: Nearly two-thirds of us Americans can’t pass a basic financial literacy test (the kind that asks you how much 20 percent interest on a $1,000 loan amounts to). And, as the financial regulator FINRA has reported, things aren’t looking up. FINRA’s surveys of Americans between 2009 and 2015 showed our financial knowledge nationwide growing steadily worse, not better.

In short, we’re laughably bad at counting money and figuring out how to save and invest it.

I myself was definitely in that “clueless” boat when I started out. But I made up for lost time. Though not a financial advisor, I’ve since had extensive experience with investing. So I’m here to report three great ways I’ve found to invest your savings that may work for you if your business hasn’t made you a millionaire (yet):

1. Invest in the three-fund portfolio … but leave room for “fun” investments.

In honor of Jack Bogle, who passed away in January, let’s talk a bit about the Bogleheads. These folks are a group of investing enthusiasts and Vanguard diehards who swear by a single investment strategy: the three-fund portfolio. What’s that mean?

It’s a portfolio divided among just three funds:

  • Vanguard Total Stock Market Index Fund (VTSAX)

  • Vanguard Total International Stock Index Fund (VTIAX)

  • Vanguard Total Bond Market Fund (VBTLX)

The three-fund portfolio, whose funds, by the way, can be obtained through other brokerages, can be split evenly or asymmetrically. Many Bogleheads tweak the percentages depending on market conditions. Some even allocate a percentage of their portfolio for “fun” investments that carry more risk.

However you decide to set up your own three-fund portfolio, you’ll probably end up doing better than 99 percent of stock pickers, who routinely fail to beat the market and may even end up losing money. In fact, variations on the three-fund portfolio have performed very well historically, having earned investors up to 5.62 percent per year over the 20-year period ending in 2018.

The best part of this portfolio? It’s a fire-and-forget strategy, which means you’ll experience much…

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