Millions of Americans are in this income bracket. There’s no shame in it. It’s the way life is. In fact, you can make a really good life at this level of income. Thing is, you’ll need to be smart about it. People don’t just miraculously produce amazing financial feats while working for <$15/hr. But some people do it. Chances are you even know one or two of them.
This isn’t how the financial industry is meant to work. If you don’t make a lot of money, there are plenty of companies out there that have organized themselves to take every extra bit of cash you can scrape together, and then some. People hovering above or below the poverty line are sold a consumer lifestyle they can’t afford. But they’re allowed to finance it, with plenty of credit cards and consumer goods companies accepting a monthly payment on an ever-growing balance. In some extreme situations, people will pay off a loan for 20 years, only to find they owe more on it than when they began. It’s clear that you’ll never get anywhere financially if you find yourself in situations like these, not to mention ever being able to invest a cent.
If you don’t make a lot of money, you’ve got to make some important financial decisions. One is a total elimination of debt, and a strong hesitation to take on any more. There are plenty of debt-reduction systems out there, so I won’t bore you here. But focus all of your extra resources on this debt. Make it your life mission to see it dead. When your debt is gone, however many months or years down the line, now I know you mean business. You can now start doing the important work of saving and especially investing.
Saving is a short term thing. Your money doesn’t grow much. In fact, it may be losing value when adjusted for inflation. So saving is clearly not a long term solution. That’s where investment comes in. It’s saving, plus dividends, for you and maybe even your children, years and decades down the line. Here are four investments I would recommend to people without debt, but who also don’t make a lot of money.
- Invest in Yourself. Go to a cheap state or trade school to get training that will increase your earning potential. Be willing to accept a few thousand dollars of debt, if necessary, if it means you’ll earn tens of thousands more in the years to come.
- Invest in Forex. Forex is cheap to start but difficult to learn well. You’ll be making investments based on your predicted value outcomes of related currency pairs. Use the free tutorial version that most brokers make available before you start winning and losing real money in this fast-paced investment style.
- Invest in Your Housing. You’ll pay more in housing costs during your lifetime than you will for almost any other need. If you have no debt, steady income, enough to cover a down payment, and a decent credit history, you should be able to buy. Buy less than what you can afford, and be willing to work on a fixer upper. You’ll probably save money on what you’d pay in rent, not to mention equity.
- Invest in an IRA. It’s a tax-protected investment account for the long term. Start one now for huge growth when you need it years or decades down the line.