‘Ok so the Money Tree Man has told me how I can be rich and happy by planting Money Trees. I have some spare cash now and not one more penny can fit under my mattress, so how do I get to start growing my own?’ Well, good sir, my answer to that question is build yourself some passive income streams. ‘Passive income streams’ is a fancy way of saying, ‘go on an’ plant yo’self a Money Tree!’ and it is basically an asset that pays you while you do very little (or sometimes nothing) to keep that cash coming in… indefinitely!
Now this may sound like those ‘Make millions working from home’ adverts, but as you are about to see there is nothing quick and easy about planting Money Trees; the fruit of which are the rewards of long-term planning and commitment to your own financial goals.
Below I have summarised some of the best types of Money Trees out there (in my experience), because I’m just that awesome. Enjoy…
There are many four letter words that can hurt a person, but not many of them can break families, destroy marriages and literally kill people; debt. Debt does this. But it doesn’t have to be that way. While debt has absolutely no place in the Money Tree lifestyle (this includes your mortgage!), it is in fact a huge opportunity for some big monetary gains! Debt – or rather paying off debt- is the sole investment out there that can give you income FOR THE REST OF YOUR LIFE – GUARANTEED.
I once had a £2000 overdraft*. It was interest-free, and I was a student so I went nuts. Before long, the interest-free honeymoon period ended and left me financially knocked-up paying £29.16/month. I did the maths and found out that was a 17.5% rate they were hitting me with. The swine! After a brief period of struggling with Little bitch syndrome, it hit me; this is the best return on investment I could ever dream of finding and it was a return that was 100% guaranteed! With all symptoms of Lil’ bitch syndrome now gone, I proceeded to clear this debt and now I have £29.16/month more than I used to, and that will last forever! Best. Investment. Ever.
‘I’ve been debt-free for years, Money Tree Man, and all that paying off debt stuff is beneath me!’
Well what if I told you that there was a way you lend random strangers your hard-earned money, and they will pay you back with interest? When I first heard about this, I immediately looked into it and, after ensuring that it was not a Nigerian Prince delivering me this information, I was fully on board. The way it works is that a company matches your willingness to lend with those willing to borrow and you sit back, grab a tea, and hit F5** once every few weeks and literally watch the returns roll in.
There are many p2ps out there but I can only speak for the two that I have used, and they work admirably! There is Zopa, which splits my deposits into various £10 loans and lends each tenner to whatever punter wants to get their eyes lasered out or whatever. For example a £2000 deposit becomes 200 different money trees that each get added to various other people’s £10 trees and loaned to the guy down the road that wants a loft conversion. The other p2p I can vouch for is Lendinvest. A p2p that matches your cash with people looking to buy/renovate/build property. The returns are always pretty badass here too so I literally go nuts every time I get an email from them with a new investment opportunity!
Stocks and shares
Whenever I hear people talk about the stock market, they seem to have this idea that it’s all Wolf on Wall Street; people running around like headless chickens, screaming their throats out on the phone and throwing a dwarf or two onto a giant dartboard. While I will admit that it is very much these things, it is very much NOT these things for you. My FTSE100*** holdings are some of my most high-yeilding assets to date. Like clockwork, companies spit out dividends throughout the year and, like clockwork, I am there ready to gobble said dividends up – and you can too! More on how I pick shares later, but the point is that it is a lot easier than films, TV shows and books. make you think it is!
I personally buy shares through the Hargreaves Landsdown Fund & Share Account. HL are a very well established stockbroker with rather high fees relative to the competition. Unlike the competition however, their customer service is simply top draw – which was very important to me when I started out on the path to plant a forest of Money trees. I have called them to ask them every idiosyncratic question possible, and they have only been too happy to answer me which has saved me making mistakes that would have cost me far more than the amount they charge me to trade with them!
So there you have it. MTM’s quick guide on how to start growing your own money trees today!
*I actually completed paying off this bad boy this month – yay me!
**⌘R for all you Mac twats.
*** Don’t know who decided it was a good idea to name our stock market footsie…