The worst way to make money

It is not something that I had spent much time thinking about recently. But besides work how we earn additional income is probably not something many people think about. Before getting into the main point I want to make the fact is that having you money in the bank even if it is a high interest saver account is the worst investment you can make.

This is not to say that making use of high interest accounts is not a good idea, by all means if you have a large business and need a good amount of operating capital available then a high interest account is the best place to keep that money. However if you are relying on income from a high interest account you may be disappointed at just the comparison of what you could make even with fairly small amounts.

I have been looking at a business opportunity the last week or so, basically all that is involved in this one is purchasing a machine for roughly $10,000 plus some supplies, and really I think all up you could get all set-up for under $12,000. I was sitting there looking at every scenario trying to make the numbers come out good and pay for the machine plus give a fairly decent return in the first year. Which as many of you will know is quite ridiculous, while in this case it is possible it relies on many factors not all within my control.

Then something hit me, which quite surprised me. I decided to look at the $12,000 investment from the point of view as what would this money make me in the bank over the next year, and at the current interest rate I am getting, it comes in about $850, or $70 a month and just $17 per week. So knowing this I have taken a different view that if I decide to make this investment, I don’t need to recover it within a year I just need to make a profit of $17 per week and I am making a better return on that money then if I had it sitting in the bank.

The best bit is that $12,000 will make me $17 per week in interest @ 7%, however if I make this purchase and can make a profit of $23 per week from it, then I am actually making a return of 10%. Even a mere profit of $100 per week would actually be an unheard of return of 44%. The best bit is that all these figures profit figures do seem very small, and in fact they are. Working on this potential business full time could make the equivalent of a salary, which would be a much better return than leaving that money in the bank.

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