How Single Moms Can Invest Like a Champ

December 6, 2018

This post may contain affiliate links.

If you think investing will never work for single moms, then reconsider that belief. Thanks to the Internet and alternative ways of investing, you can prosper your family financially. Of course, I’m not talking about those get-rich-quick investment scams. Real investments take time and effort to grow over a period of years. In this post, I’ll discuss ways you can make wise investments without losing your mind.

Start with Roth IRA

Don’t wait until you get to the end of your career to think about retirement. The best time to plan for that moment is while you’re at the peak of your career. One great investment is the Roth IRA. If your employer does not offer this or if you’re self-employed, then there are online retirement accounts available. In order to qualify for a Roth IRA, you must earn less than $112,000 annually and in general, the maximum amount you can contribute over a period of years is $5,000. If you wish to withdraw from your Roth IRA, you can do so but unless you’re over age 59, you incur a tax penalty for the withdrawal. But after you turn 59, your withdrawals are tax-free. To maximize your earnings, it’s wise to contribute as often as possible.

Dividend Reinvestment Investment Plan

This is another neat way for single moms to invest even with a modest income. With this plan, you purchase stock directly from the company without having to use a broker. Instead, you can open a DRIP account at a traditional bank or with a stock transfer agent. You can establish recurring payments from your checking account each month or week in the amount you choose. One of the best things about this account is that you can reinvest all or some of your dividends in the company, leading to increased earnings. Or you might decide to have all of your dividends deposited into your checking account. There is also the concept of dollar-cost averaging with DRIP. This means that if your stock’s price isn’t high, the investment would buy more shares, but if the stock’s price is high, you wouldn’t buy as many of them.

Index Funds

Index funds are cool investments for single moms with modest incomes. Index funds are really mutual funds that do not require the use of a human manager to choose those funds for you. Instead, you have more independence concerning your investments, and they are designed to reflect the performance of well-known indices such as Standard and Poor and Dow Jones. This means that you’re not paying high fees to a traditional mutual fund manager, saving you money. In addition, it doesn’t cost a lot to get started with investing in index funds. Some good companies to purchase index funds from include Vanguard and Fidelity. Because the company does the research on your behalf, it takes the guesswork out of your investing strategy.

Build Some Passive Income

Another way of investing wisely is to seek out passive income opportunities. If you love to write, why not write short ebooks to sell on Amazon or your blog? Each time your books sell, you earn a profit. This investment can earn you profits long-term. Another good source of passive income is blogging. You can blog on a topic you’re passionate about and then you can monetize it by selling diverse goods on it.

For those who are into videography, Youtube is a neat way to earn passive income. It’s free to sign up for and you can create videos in a certain niche. You should choose a niche that you are passionate about but that is also profitable. The key is to be consistent with your videos and develop new ideas that will make your channel better. You can gain revenue through the ads that show up on your channel but you can also monetize it through affiliate marketing or through sponsored videos from different companies.

In conclusion, investing seems like a difficult task to take on but by educating yourself and working hard towards your goals, you’ll have peace of mind in knowing that your investments will be profitable.

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