The Top Five Investing Hacks to Start Growing Your Portfolio

Updated: Nov 13, 2021

It’s Never Been Easier to Become Financially Savvy

“Teach her about how money really works, and she can change the world.” – Linda Davis Taylor

If you’re like most of the people buzzing around Hive, you spend some time thinking about investing — and you love the idea of making your money work for you — but something gets in the way of taking the next step. We hear you: Some common roadblocks to financial freedom are fear and uncertainty.

No matter where you are today, our top five investing hacks will empower you to start growing your portfolio and create a more fulfilling tomorrow. With clear strategies and a consistent plan — and enough knowledge about how money really works — anyone can break through the glass ceiling and create wealth.

Get ready to change the world!

1. Start Investing Now

Take advantage of compound interest and start investing today. The earlier you start, the faster your money will start working for you. As you may know, compound interest is the driving force behind investing. Albert Einstein is credited with saying “compound interest is the most powerful force in the universe. He who understands it, earns it; he who doesn’t, pays it.”

So what is compound interest anyhow? Picture the exponential growth curve from your high school math class — this is what happens to your money when you invest. The interest you earn each year is added to your initial investment, so you're earning interest on top of interest.

For example, let’s imagine you save $1,000 and put that money into an account with 5% annual interest. The first year you make $50, leaving you with $1,050. Earn 5% on your principal plus interest and the second year you earn $52.50 — topping your account up to a total of $1,102.50. If you leave the initial investment in your account for 30 years, your account would grow to $4,322 without adding any money. Essentially, each year you’re earning more and more money on your initial investment plus the interest you’ve accrued — $50 the first year and $205 the final year. The more you invest up front and the longer you allow your money to work for you, the more money you will make. To better understand this concept, play around with a compound interest calculator like this one at Nerd Wallet.

2. Open A High-Yield Savings Account

As you begin to clarify your investment goals, set aside some cash for emergencies — and put it away in a high-yield savings account so you can earn while you save (unlike traditional savings, these accounts can offer interest rates > 1%). Depending on your personal situation, you’ll want to have several months of living expenses to fall back on as you head out on your investment journey.

3. Set-up & Contribute to Your Retirement Accounts

Your retirement account is the honey in your Hive. We can’t say enough about the benefits of investing in a retirement plan. If you care about financial freedom, start planning for your retirement. The most common plans are IRAs and 401(k)s. IRAs are accounts you set up on your own, while 401(k)s are generally set up by your employer — though there are also options for the self-employed. Both types of retirement accounts offer tax breaks. Essentially, when you invest in a retirement account, you can save on taxes and set yourself for a healthy and happy retirement. Win-win.

When you invest in a traditional 401(k) supported by your company or a Solo 401(k) for the self-employed, your retirement contributions are deducted from your paycheck before taxes are calculated — leaving you with a lower taxable income. In other words, your investment is not taxable until you start withdrawing from your accounts. Similarly, contributions to traditional IRAs and SEP IRAs (for the self-employed) are tax-deductible, but you’ll pay taxes on the money you take out during retirement. With a Roth 401(k) or a Roth IRA, on the other hand, you pay income taxes up front, but the money you take out during retirement isn’t taxable. Regardless of the plan you choose, the money you contribute to your IRA and 401(k) accounts will grow over many years with compound interest.

4. Automate Your Investments

These days, you can automate just about anything, including your investments (it is 2021, after all). Set up your investment portfolio with a robo-advisor to automate everything from financial planning to saving for a home down payment and retirement — and track your earnings online. You’ll find yourself building wealth faster than ever before.

5. Find Community

Whether you start buzzing around the Hive or reach out to a mentor who has a successful financial history, find a way of talking about money that helps you build a new story — one that’s positive, affirming, and rich in support. Some of the most relevant and helpful investment hacks will come from your community in the forum, or from trusted sources who are at the top of their game. Pretty soon, you’ll be sharing your own savvy financial knowledge with other people looking to grow and thrive.

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