(Newswire.net — June 10, 2020) — The term “fortune” can mean different things to different people. For Bill Gates or Jeff Bezos, a small fortune is going to be a lot more money than it would be to an unemployed college graduate. For our purposes, let’s say that you have enough money that all of your expenses are paid and you are investing regularly in your retirement – and you have a nice chunk of cash left over. How do you turn this small fortune into a big one?
Small Fortune Into Large Fortune – The Fast Way (High Risk!) and the Slow Way
There are no guaranteed ways to turn a little bit of money into a lot of money quickly – that needs to be said right off the bat. If there were, anyone could do it. Growing money quickly requires taking a significant risk. The greater the risk, generally the greater the reward. Think of betting big in Vegas. If you win, you win a lot. If you lose, you lose a lot.
There are some more dependable ways to transform a small fortune into a larger one, though – they just take more time and effort. Think of starting a business. There are so many options here, ranging from starting a micro lending company to a lawn care business. You may have to get a loan, spend multiple years working on it, and are still not guaranteed to get rich. But you are more likely to be successful than betting in Vegas.
Let’s look at a few options in both the fast money and slow money categories. Here are some of the faster ways you could possibly make your small fortune big, and some slower ways that are more likely to grow your money over time.
Fast Money – High-Risk Ways to Win Big
1. Day trading
It takes a lot of guts and a high tolerance for risk to successfully play the stock market, but it can be done. You can learn how to do it and learn how to do it well enough to possibly make good money. There are numerous people who have started with a small fortune and made it into a big fortune in stocks. Of course, it is just as easy – actually, easier – to lose your money here than it is to make more of it, at least if you are trying to win big quickly. Low-risk stock trading doesn’t make money quickly. It is only by taking big risks that you can rapidly increase your capital.
2. Cryptocurrency trading
Some smart (or lucky) crypto investors have made fortunes trading cryptocurrency. Bitcoin, Litecoin, Ether and other currencies are available on special exchanges – where you can spend money to buy coin and then hold onto that coin or trade it. There are more than 3,000 cryptocurrencies out there right now, but you can quickly find out which ones are the most popular and stick with those for simplicity’s sake. This is another area where you can be bold and potentially make a fortune. But for all those traders who made big money trading crypto, there were many, many more who lost their money.
3. Trading commodities
Silver, gold, livestock and other commodities are an area where you can make a lot of money – if you don’t lose all of your money, first. You can use exchanges like the Chicago Mercantile Exchange to invest in metals, for instance. Many times your investments will be based on futures contracts. These are agreements made between buyers and sellers for transactions that will happen in the future at a predetermined price. However, they can fall through and leave you hanging, so you need to be risk-tolerant.
Slow Money – Lower Risk Ways to Transform Small Money to Big Money
1. Start a business
If you have a good business idea, a desirable skill set or a service that you excel at, you could start a business with your small fortune. Some businesses take more money to start than others, so you might still need some investment to get your venture off of the ground. But if you are careful and smart about your business – like creating a sound business plan to test the viability of your business idea – you should be able to pour your energy into the business over the long term and succeed. Businesses do fail, so this option is still not a guarantee of wealth building, but it’s certainly a safer option than Vegas.
2. Invest in a diversified portfolio
Investing does not have to be a high-risk endeavor. One of the main recommendations for wealth building for the average person is to invest in a diversified portfolio and stick with it long term. When you invest in a truly diversified portfolio, one that covers thousands of companies, you are betting that over the long term these companies will be successful. Not all of the companies, of course, but most of them. And the data shows that you would be right. Those who invest like this see positive returns over the long term – the key is to avoid cashing out early when you are worried that the stock market is doing badly. It may do badly, but it will probably recover and you will be better off if your money is still in it.
3. Get out of debt
If you are lucky enough to come into a small fortune unexpectedly, one of the best things you can do for yourself is to get out of debt. Debt is a drag, both literally and figuratively. You are paying interest on that debt every month and that interest can really add up over time. You will likely be better off if you pay that debt off using your small fortune so that you can get back to level. Then, you will have a clear road ahead of you to build a bigger fortune.
If you do come into a lot of money, be sure to hire a financial manager and get some knowledgeable advice about what will be the best way to put your financial house in order.