It is nice when you are recognized at work and it’s even nicer when you get a bonus. Whilst it is tempting to blow your bonus on a new TV or a fancy dinner and an overnight stay out of town, you need to think about practical ways you could use your bonus such as reinvesting that money to help grow your savings account or your portfolio as the case may be. Here at Jayhawk Advisors, we are committed to helping clients grow their wealth, so without further ado here are 7 ways you can re-invest your bonus, and boost your financial health!
1. Re-invest in yourself, via your employer
If your business thrives, then you keep your job. Depending on the company you work for it may or may not be publicly traded, as such if it is publicly traded then you should consider purchasing stock in your company. Stock options are a great way to boost your income and help you save some money for the future. When it comes to buying stocks remember this, buy low; sell high!
2. Buy CD’s or bonds
If you are not brave enough to weather the storm that is the stock market, you can approach investment in a passive way by buying CDs or bonds from your local bank. The rate of return on investment is not that high so many people avoid bonds or CDs. most CDs offer 1 and 1/2 to 2% on return on investment at the time of the bonds maturity.
3. Put the money into a high yield savings account
Again, if you are someone who prefers a passive investment then a high-yield savings, account would be perfect for you. With high-yield savings accounts you have to have a large deposit sometimes over $1,000 to see the rates of return that you would expect from a high-yield savings account.
4. Use the money to get out of debt
Sometimes the best investment you can make in yourself is paying down your debts. When you pay your debts down, you free up more capital and will have the money you need to buy stocks or open a savings account or do whatever you can to grow your wealth and protect your family from financial instability.
5. Buy into a business or a franchise
Not knowing how much your bonus is we can only speculate and offer a wide range of options of things to invest in. A great money maker is franchising or buying into an established business. Now you would have to have a sizable bonus in order to buy into a franchise most franchises including restaurants like Burger King ask for an investment of $50,000 but there are groups that go in together to buy franchises and there are many websites out there that will connect you with startups or franchise owners looking for investors.
6. Put the money in an IRA
Consider putting the money into an IRA or if you already have a retirement account see how much you need to put into Max it out for the year. Remember the IRA account to tax-free, so you can maximize your current IRA account.
7.Invest in your home
Consider using the money to invest in your home and make some energy-efficient changes such as solar panels. Solar panels or other energy-efficient upgrades to your home can add thousands of dollars to the value of your home. Also, you will save money in the long run from lower energy bills. In fact with solar power, you can make money by selling your unused energy to the power company.
As you can see, there are many things you can do to reinvest your end-of-year bonus but what you can do will be dictated by how much the bonus is. Even if the bonus is $500, then that is still enough to make substantial savings or investment depending upon what you want to invest in. Managing money is difficult but with Jayhawk Advisors, you can find the Financial Freedom you need on your own terms.