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Five Ways to Make Your Money Work for You

Here are the five ways to make your money work for you:

  • Invest in the stock market and other financial instruments (e.g. equities, bonds, mutual funds, ETFs)
  • Invest in luxury goods (e.g. art, sports cars, whisky and wine, precious stones)
  • Invest directly in business (buy into a local business)
  • Invest in starting a business
  • Invest in yourself by developing your knowledge, skills and competencies.

Have you been wondering how to make your money work for you?

You work hard, you have squirrelled away some money and you keep it in a savings account. Still, you know enough to know that your money is lazing about and not doing much. You are the only one doing the heavy lifting and this is not the way to get ahead in the money game.

Hence, the question is how to make your money work for you, up its game and start making serious profit. Yes, your money can start doing some work and in this post, I’ll tell you the ways of making your money work for you. These ways to make your money work are about investing and I hope beginners would appreciate them.

From anyone else, this may be a tad patronising. Not me.

I think I could get this one right and offer some helpful investment lessons. Do you know why?

Because until about six years ago I was an investing virgin, so to speak. My money didn’t work for me. Heck, I had no spare money to invest.

Yes, I had been paying into a pension but this didn’t really require even basic knowledge: it was a no-brainer.

Investment virgin, not making my money work, I tell you. Just like you.

Six years ago investing wasn’t even in my vocabulary. This is what happens when you grow up in a country where you saved for a specific reason and the only source of income was labour. Oh, and connection but this is a different matter.

Then I started thinking about how to make my money work for me.

I started dabbling and opened an account with Nutmeg. I started reading and researching so I learn about the ways in which my money can work for me when I sleep.

This is how I know about investing for beginners and ways to make money work for me. Last year, my overall return on investment was 6%. Doesn’t sound much but it was a bad year.

how to make my money work for me

I learned quite a bit about investing and would like to help you start as well. Today, I’ll tell you about the five ways to make your money work for you. Knowing about these is, I believe, the cornerstone of all investing.

These are:

  • Investing in financial instruments
  • Investing in luxury goods
  • Investing directly in business
  • Investing in starting a business
  • Investing in developing your competencies.

(I’m not including investing in property today. This is a specialised kind of investing that is very capital intensive and probably a stage higher than investing for beginners.)

#1. How to make your money work for you: investing in financial instruments

How to make your money work for you


Since this is about the ways to make money work if you are a real beginner, I’m not going to make it more complicated than it has to be. You’ll have to remember, however, that investing in financial instruments is a very diverse and complex affair; some would say that this is a minefield for the beginner.

For now, you need to be aware that these instruments include investing in: stocks and shares, bonds (bonds are the way for governments (and others) to borrow money from us; options, futures etc. (sorry, not even going to go there – these are fairly speculative, you really need to know what you are doing and even then…); mutual funds (these are investment strategies that allow you to pull your funds together with other investors and purchase a basket of stocks, shares, bonds and other investment instruments); and Exchange Traded Funds (ETFs) (this are basket investment instruments).

One investment instrument possibility that is exceedingly popular (and underpins many of the more complex investment vehicles mentioned above) is investing in stocks and shares.

Trading stocks and shares in on any investing for beginners list but many people are not entirely clear about what this means. When you buy stocks and shares, in effect you buy a (small) part of a company. There are three main ways in which you make money from stocks and shares:

  • Speculation. This is when the price of a particular share is going up because many people are buying it. Conversely, the price goes down when many people are selling their shares. Buying and selling in this case is subject to rumour, misinterpretation of information, emotion etc. Speculative volatility doesn’t have much to do with the value of the company. A tweet by a celebrity can have a large albeit temporary effect.
  • Company value. This is when the price of the shares is directly linked to the increase or decrease of the value of the company.
  • Dividends. This is a sum of money paid by companies (usually once a year) to their shareholder from the company’s profits.

Why am I telling you this?

Because you can do very little about speculative fluctuation except not fall prey to them. Don’t agonise over how your shares are doing and don’t check them every fifteen minutes – this will be a monumental waste of time and opportunity.

The other two, have given rise to two very different types of investing: ‘value investing’ and ‘dividend investing’.

When doing the former you look for companies that are undervalued for some reason with the expectation that their value will increase. My Rule Breakers portfolio is an example of that: I’ve bought companies that are either fairly new or have had a mishap that is being remedied. And yes, my portfolio is doing well.

Dividend investing is about buying stocks and shares in companies that pay generous dividends. I have a guest post for you on dividend investing that you could read tomorrow: I’m still learning about this one myself and have not experimented with it.

Last but not least, Robo-investors ought to be mentioned here. I’ll be writing more about these as well. You know that I have been investing with Nutmeg rather seriously (and persistently) and now I’m starting an experiment with Scalable Capital.

#2. Making your money work for you: investing in luxury goods

how to make money work for you

Photo by Arie Wubben on Unsplash


This is about investing in things like art, wine, jewellery and vintage cars. In principle, investing in the ‘finer things in life’, particularly investing in wine, is fun. In practice, it needs a lot of specialised knowledge because every time you buy a piece of art you are betting that its value will increase. Only people who understand art have an eye.

You want my advice on this one? Stay out if you don’t have the eye for, and encyclopaedic knowledge about, a particular class of objects; thought this investing can surely spice up your portfolio.

#3. Have your money make money: investing directly in businesses

This is the investment I’m really keen on and with, what I believe are rather good reasons.

You see, risk is the bane of any investing and the biggest reason why people don’t do it. What is not very well understood by most everyday investors is that our perception of risk is correlated with our level of control. Simply put, this means that the less control we have over something, the higher risk we perceive it to be.

Don’t believe me? Let me ask you: would you be worried about nuclear war if you controlled the switch? No, you wouldn’t.

It is the same with investing. We worry about losing our money on the stock market because we have very little control over what is happening. Frankly, it many cases we have imperfect information as well never mind how hard we try to keep abreast.

When you invest in local businesses directly the risk-control seesaw swings.

You have more control and hence the risk is lower. This is why we bought 50% stake in a local MOT and car service garage.

Can you fail? Of course, you can. At the same time, if you follow some fairly simple rules for selecting the businesses you invest in you have to be a real klutz to fail big time.

#4. Make your money work harder: start a business

This is usually the big, scary one that hides in the cupboard and every time it tries to come out you kick the door shut.

Yes, I get it. It is scary to start a business and branch out on your own. You’ll have complete control over how the business develops but the flip side to that is there is no one to blame for anything.

At the same time, investing in starting a business is one of the most satisfying and profitable investments you’ll ever make. Take my case, for instance. When I started dabbling in online publishing I forced myself to see it as a hobby; this way it was less pressure. Now my websites are a very neat side hustle; I have no doubt that were I to take the plunge and focus on these full time they will become a nice, proper online business. What started as a pleasurable way to spend 10-15 hours a week (writing and talking to you) may turn out to be my ticket to fulfilment and location independence.

To start a business you need ideas and the grit to realise them. Of these, coming up with ideas is the easy part. Here are, for example, 150 ideas on how to make money.

Acting on ideas is much harder. But it can be learned.

Starting a business, including an online business, is not all flowers. It is still so much worth it!

#5. Make your money work for you: invest in yourself

how to make your money work for you

Finally, a way to make your money work for you is through you. What I mean is that it is always worth investing in yourself, in gaining new and varied competencies.

These can range from cooking and baking to coding and public speaking. Investing in yourself can be spending money to develop a healthy habit; or get rid of a very unhealthy one.

Do you know that the £250 I spent in 2006 on a stop-smoking workshop is one of the better investments I’ve made? To start with, I have not smoked for over ten year. Let’s, for simplicity sake, say 10. Are you surprised that by investing £250 for the workshop I’ve saved over £20,000? I am. And my lungs have recovered so my health has benefited. You see now why this is a cracking investment.

Remember also that education always pays off. And I’m talking about education, not degrees.


These are the five ways to make your money work for you everybody should know. Now it is time to stop reading and start doing. Open a stocks and shares ISA account, book a course to upscale your skills and brainstorm business ideas.

Either you work for your money or your money works for you: it is all in your hands.

I know this is too much to take if you are just starting out. If you think this will help bookmark this post and see it as the skeleton on which we’ll be putting more muscle. Eventually, we’ll get to the skin and even make-up; have some faith.

Is your money working for you? What have you invested in? (Please don’t be shy and share; we can all learn from each other.)

7 thoughts on “Five Ways to Make Your Money Work for You”

  1. You’ve talked about your garage business a few times so apologies if you’ve answered this somewhere already but where can you find opportunities to invest in and buy a share of a business?

    • @AI: A good question (and probably needs a full post) and I’m not sure I have answered this properly before. I’ve written about spotting opportunities couple of times. I reckon one could use a directory of businesses for sale. I don’t do that. My best investments so far have been buying a website (through a broker I trust) which returned the capital in eight months and the garage. In the first case I know the business and just had to spread the word that I’m looking. In the second, I know (and trust) our partner – he is in the motor- business (buying and selling, servicing, mending and driving; generally the guy’s passion are cars) and this opportunity came about through his connections. In both cases, I’ve used local (or personal) knowledge and connections.

  2. Thanks for sharing this article. I think that it is important that we invest to start a business. I think that by doing this we will be able to have a lot of income more and hopefully if the business will succeed, we’ll be able to save a lot of money for the future.

  3. Hi, I can purchase shares with my company which then doubles the number I purchase. The price right now is at one of the lowest they have ever been which could be a good thing for me as my colleges paid twice as much as they are now. Having never done this before my question is what would you do ?

    Much Appreciated.

  4. Yes, I totally agree with what you said. I think that when you invest to business you will have a better finances and secured future. I also think that when you have a business you will have a lot of income. Thanks for sharing this article.


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