The quickest way to double your money is to fold it in half and put it in your back pocket. — attributed to Will Rogers
We’d all love to double our money. Even billionaires, presumably, would love to double their money. It might seem like a hard thing to do, but there are several ways to go about it. Here are a few to consider.
1. Grab a 401(k) match
Let’s start with an easy way to double your money — as long as you have a 401(k) plan available to you at work. If you do, there’s a very good chance that your employer offers matching dollars, according to a particular formula. An example would be matching 100% of worker contributions up to 4% of salary. So if you contribute 4% (let’s say that you earn $100,000 and that amounts to $4,000), your employer will kick in another $4,000. That’s free money, and it’s also pretty much guaranteed.
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There are other formulas, some more generous, some less so. A common one is matching 50% of contributions up to 6% of salary. So if you contribute 6%, you’ll get 3% chipped in by your employer. Aim to never leave such money on the table. Note, too, that contribution limits for 401(k) accounts are very generous. For 2020, you can contribute up to $20,500, and if you’re 50 or older, you can add another $6,500 to that.
2. Invest more effectively
Another strategy is simply to invest more effectively. Many of us, myself included, are guilty of just leaving some money invested somewhere in some account. Maybe you chose a few mutual funds for your 401(k) account’s contributions, or for your brokerage account. If you haven’t kept up with them and assessed how they’ve been performing for you, you might be in for a sad surprise.
Similarly, if you’ve just been stockpiling dollars in a bank account (which I did for several years in my youth), earning very little, they could be working harder for you invested in more effective places.
Do keep short-term money — money you expect to need within five (or 10, to be more conservative) years — out of stocks and in accessible places, such as money market accounts or certificates of deposit (CDs). But park your long-term dollars where they’re likely to grow best for you. For most of us, that’s the stock market.
You might invest in stocks simply, via a low-fee, broad-market index fund, or you might study companies and pick some individual stocks in which to invest. (…….