5 Proven Ways to Double Your Money
Taking $100 and turning it into $200 with any level of consistency is a recipe for wealth. If you want to double your money, you don’t have to get lucky in Vegas or win the lottery. There are better, more consistent and proven ways to boost your bank account by 100%.
Here are five ways to double your money.
1. 401(k) match
If your employer offers a match for your 401(k) contributions, this can be the easiest and most guaranteed way to double your money. 401(k) matches may be a dollar-for-dollar match up to a certain percentage of your salary, so it’s literally doubling your money. Even if your employer only offers a 50% match, it’s one of the best returns on investment you’ll ever get.
The only caveat is that your 401(k) is designated for retirement. As such, there can be steep penalties for withdrawing before you reach retirement age. So, if you need to double your money and get access to it quickly, the 401(k) isn’t your best option.
2. Savings bonds
Another guaranteed way to double your money is by buying Series EE Savings Bonds from the U.S. Treasury. While the bonds currently yield a paltry 0.10%, EE Savings Bonds have a special mechanism that guarantees you double your money if you hold them for at least 20 years. After 20 years, the bonds will continue to earn interest for another 10 years.
An additional benefit of using EE bonds is that they’re exempt from state and local taxes, but you’ll still have to pay federal income tax on the interest earned.
3. Invest in real estate
Investing in real estate offers multiple ways of doubling your money. The big advantage of investing in real estate is the easy access to low-interest leverage through mortgage or other real estate loans. That means your cash investment can be relatively small compared to the asset value.
You might be able to double your money by forcing appreciation in a building through repairs and renovations. Then, you can turn around and sell it. If you live in the building for two years while fixing it up, you can also avoid a lot of taxes.
You could also double your money by finding a solid rental property and holding it long term. Not only could you generate monthly cash flow, you’d also benefit from any appreciation of your real estate asset.
4. Start a business
Investing in yourself can be one of the best ways to double your money. Starting a business doesn’t have to take a lot of money. You can get started with less than $100 if you need to.
The business doesn’t have to be big, either. It could be just a side hustle you do in your free time to supplement your income.
And you don’t have to reinvent the wheel, or even come up with an idea at all. You could be a rideshare driver: Spend $50 on gas and get $100 back in your account.
Starting your own business can also have tax advantages, but you may need to consult an accountant to ensure you’re taking advantage of everything you’re allowed to.
5. Let compound interest work its magic
Compound interest will always double your money given enough time. The challenge, right now, is finding the proper vehicle for compounding your money. Savings accounts yield practically nothing, and CDs aren’t much better. Investing in securities historically produces much better returns over time than steady interest-bearing accounts, with the disadvantage of increased volatility.
If you want to figure out how long it’ll take to double your money, you can use the Rule of 72. It’s a simple trick that estimates the length of time to double by dividing 72 by your interest rate. For example, earning 9% interest year after year will double your money in 72/9 = eight years.
Mix and match
Each of the above options has varying benefits, drawbacks, and risks. You don’t have to choose one — you can choose all or some of them in order to plot your path forward and double your money.
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