What to do after generating an extra $5000 per month?

We’re going to go through a process to help you know exactly what the answer is in just a minute. But before I get into it I want to assure you of one thing. No matter what your situation is. No matter how much or how little money you have. Anyone from any walk of life can start building an extra $5,000 per month working a sideline hustle or home based business. I know because I did it in less than 6 months.

1. High Cost Debt

Before we worry about?buying new cars and fancy vacations, we need to take on debt.?Other than your mortgage or other special very low cost debts, you should get rid of debt if you have the money to do so. If you have $5000 and owe that much or more, use all the $5000 to pay down that debt. If you don’t have the entire $5k but do have extra savings each month, use that money to pay that debt off as you get it. Don’t wait until you save up the entire amount.

Why pay off debt first?

When you pay down debt it’s like earning the amount that you would pay your creditors. And that’s a guaranteed return.

For example, if you owe MasterCard $5000 and the interest is 9%, you make 9% by simply paying them off because you are keeping the interest in your pocket rather than paying it to them.

Let’s look at the next place to put your $5000 assuming you have no debt.

2. Emergency Fund

No matter who you are, you’re going to have unexpected expenses. You can be ready for them by having a sufficient emergency fund. I don’t abide by the old “put aside 6 or 12 month earnings” adage. The?amount you need varies based on how stable your income is, your age, health and whether or not any big changes are coming in your life. Use your PT home based business to pay off debt #1 and then start saving for an emergency fund.

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3. Savings

I am not a huge fan of savings or CD accounts because they pay almost nothing. But there is one exception. If you have short-term or mid-term financial goals, you absolutely must use savings and CDs. These “investments” don’t pay very much interest as I said but they do provide absolutely security and some degree of liquidity.

If you need your $5000 within 6 months – keep the money in a savings account. If you need the money in 6 months to 3 or 4 years, tap into the security of longer term investments either stocks, bonds, crypto or real estate holdings.

Let’s assume you’ve handled your short and mid-term needs. We’re ready to move ahead.

4. Real Estate

If you have $5000, no debt, an emergency fund and your short-term and mid-term needs taken care of, it’s time to make some investment decisions. Owning your own home would be a good start but if you already own your home and its paid off in full, you can look at rental properties as a solid option. This might require a higher level of skill or the leverage of skill from others who know the market.

The one thing that I can offer is a chance to start putting away $5,000 per month or more in royalty type passive income.

It’s the best way to have total freedom. If you just exchange time money, you will never have enough time and rarely will you ever make enough money.

You have the power to change all of that within 6 months or less.

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