You don’t have to be rich to start growing your money. A lot of people hear words like investing, retirement, stocks or real estate and immediately think: “I’ll worry about that when I have more money.” But that’s exactly why we created GROW here at Savvii Savings.
Growing your money isn’t only something you do after you’ve made it. It’s something you can learn to do while you’re getting there. And you don’t have to understand everything at once.
Hi, I’m Savvii!
And if you’re here learning how to make smarter decisions with your money, you’re already on your way to becoming a savvy saver. Being savvy is something we can all get better at — finding better value, making smarter choices, and getting a little more out of what we have.
So come along, learn with me, and let’s GROW.
What Does It Actually Mean to Grow Your Money?
Growing your money simply means trying to put yourself in a better financial position over time. There isn’t only one way to do that.
You might:
• earn more money;
• save money somewhere that pays you interest;
• invest part of your money;
• build a business;
• develop a skill that helps you earn more;
• prepare for retirement;
• buy property;
• build ownership in something valuable;
• or do several of these over time.
That’s why GROW is bigger than just investing. Investing will be an important part of it, but it isn’t the entire story.
You CAN Start With What You Have
One of the easiest excuses to make is: “I don’t have enough yet.” Enough for what? If you don’t have $1,000, maybe you have $10. If you don’t have $10, maybe you have $5. If this is a particularly tight week, maybe you have $1. And if you truly don’t have a dollar available right now, you can still start by learning.
The amount isn’t the first lesson. The habit is.
There are now investment firms that offer fractional shares. A fractional share simply means buying a piece of one share instead of having to purchase the whole thing. The SEC explains that fractional investing can allow people to invest a specific dollar amount even when they cannot afford the price of one full share. Not every investment company offers this, and their minimums and rules can be different. [1]
So starting small is possible! But there’s an important difference between being able to buy something and understanding what you’re buying. That’s where being savvy comes in.
Saving and Investing Aren’t the Same Thing
You’ll hear both words often on Savvii Savings, so let’s make this simple 🙂
Saving
Saving means putting money aside instead of spending it. A savings account at a bank is one common example. Banks may pay you interest for keeping money there. Interest is money the bank pays you based on how much money you have in the account and the account’s terms.
Money in qualifying deposit accounts at an FDIC-insured bank can also receive federal deposit insurance. The standard FDIC insurance amount is currently $250,000 per depositor, per insured bank, for each ownership category. [2] That does not mean every financial product at a bank is insured. Stocks, bonds, mutual funds and crypto are examples of investments that are not covered by FDIC deposit insurance. [2]
Investing
Investing means putting money into something with the hope that it will increase in value or produce income over time.
That could include:
• stocks;
• investment funds;
• bonds;
• real estate;
• retirement investments;
• businesses;
• cryptocurrency;
• and other assets.
An asset is simply something you own that has financial value. Unlike money in an insured savings account, investments can lose value. That’s why the possibility of earning more usually comes with something else: risk.
What Is Risk?
Risk means there is a chance that your result will be different from what you hoped. You might make money. You might lose money. You might make less than you expected.
An investment could also go up for several years and then fall. The SEC explains that all investments involve some degree of risk and that markets can move up and down over time. [3] That isn’t a reason to be afraid of investing. It’s a reason to understand what you’re doing! Being savvy doesn’t mean avoiding every risk. It means asking:
• What am I putting my money into?
• How could I make money from it?
• How could I lose money?
• When might I need this money again?
And:
• Do I understand this well enough to put my money here?
Those are questions we’ll keep coming back to throughout GROW.
Why Starting Small Can Be Powerful
Suppose you begin with $5.
Five dollars probably isn’t going to change your financial life by itself.
But something else may happen. You start paying attention.
Then maybe you contribute another $5.
Eventually you understand what you own. You begin reading.
You learn what a stock is. You learn why one investment moves differently from another.
You learn what fees are.
Maybe $5 eventually becomes $10 a week. Maybe your income increases and later you can contribute $50.
The person who starts learning with a small amount may be much better prepared when there’s more money available.
That’s why we don’t make fun of small beginnings here.
Small is still a start. Plus, most things (including us) started small too!
Your Money Can Grow on Top of Growth
There’s another concept worth understanding early: compound growth. Compound growth happens when money earns a return and then future growth can occur on both your original money and the growth you’ve already earned. [3]
Here’s an easy way to think about it. Imagine something grows from $100 to $105. If the money stays invested and later earns a return again, that next return isn’t necessarily working with the original $100 anymore.
It’s working with the larger amount. Over long periods of time, that can matter. It doesn’t mean an investment will grow every year. It also doesn’t mean returns are guaranteed. But it explains why time can be such an important part of long-term investing. The SEC describes regular investing plus time as an important part of long-term wealth building. [3]
That’s also why waiting until you’re wealthy before learning about money can work against you.
You can learn while you’re building!
Don’t Put Everything in One Place!
Here’s another money word you’ll hear: diversification.
It sounds complicated. It isn’t.
Diversification means spreading your money among different investments instead of depending completely on one investment. You’ve probably heard the saying: “Don’t put all your eggs in one basket.” That’s the idea.
If every dollar you invested were in one company and that company performed badly, your entire investment would depend on that one company. Spreading money among different kinds of investments can help manage some of that risk, although diversification cannot guarantee that you won’t lose money. [4] We’ll talk much more about diversification when we get deeper into investing.
For today, just remember:
More isn’t always better. Different can sometimes be safer than all-in.
Growing Doesn’t Only Mean Buying Stocks
This is important! When you see GROW, don’t automatically think stock market.
There are several areas we eventually want to explore together.
Grow What You Earn
One of your most powerful financial tools may be your ability to earn money.
You might increase your income through:
• a better-paying job;
• a new skill;
• a certification;
• a promotion;
• freelancing;
• a side business;
• entrepreneurship;
• or another income stream.
If learning a $100 skill eventually helps you earn thousands more over your career, that’s growth too.
We’ll eventually break this area into things like careers, skills, side income and business building.
Grow Your Cash
Not every dollar needs to be invested. Sometimes you need money somewhere easier to access. That’s where savings accounts, certificates of deposit and other cash options can come into the conversation.
We’ll teach those separately so you understand what they do before comparing anything.
Grow Through Investments
This is where we’ll eventually explore:
• stocks;
• ETFs;
• bonds;
• cryptocurrency;
• real estate;
• and other investments.
An ETF, or exchange-traded fund, is an investment that can hold a collection of different investments inside it.
Think of it like buying one basket that contains several things instead of buying every item separately.
We’ll make that much easier to understand in its own article.
Grow for Retirement
Retirement accounts count as investing too.
A 401(k) is a retirement plan that many employers offer. It can allow employees to put part of their paycheck into an account for retirement, and some employers also contribute money to employee accounts. [5]
An IRA, or Individual Retirement Arrangement, is another type of account used for retirement saving and investing. [6]
You’ll also hear terms like:
• Traditional IRA;
• Roth IRA;
• employer match;
• rollover;
• custodial accounts;
• and accounts adults can establish for children.
We aren’t going to pile all of those explanations into this one article.
We’ll take them one at a time.
Grow Through Ownership
Ownership can also create opportunities!
That might mean:
• owning a business;
• owning part of a company through stocks;
• owning real estate;
• or owning another asset that has value.
Real estate is a large subject by itself.
Buying your home, owning rental property and investing in a real estate fund are not the same thing.
We’ll explore those differences later.
What About Crypto?
Cryptocurrency will be part of our investing conversations too. Crypto is a digital asset, and its price can sometimes move much more sharply than traditional investments such as broad groups of stocks.
That movement is called volatility. Volatility simply means how much and how quickly a price moves up and down. Something with high volatility can rise quickly. It can also fall quickly. That’s why seeing a low-priced crypto coin doesn’t automatically mean you’ve found a bargain. Price alone doesn’t tell you whether an investment is good.
We’ll eventually talk about what to look at before buying crypto rather than choosing something simply because it’s cheap or popular.
What If You Have Debt?
Debt doesn’t automatically disqualify you from growing.
Some debt can make financial progress much harder—especially expensive consumer debt that keeps charging high interest. Other debt may be used strategically. Businesses borrow money. People finance homes.
Real estate investors may borrow money to purchase property. The important question isn’t simply: “Do I have debt?” A savvy question is: “What is this debt doing to my financial life?”
We’ll dig much deeper into paying down debt under SAVE and eventually talk about strategic borrowing and planning separately.
For now, don’t assume you have to become financially perfect before you’re allowed to start learning how to grow.
What If You Already Have a Lot to Invest?
The same basic rules still matter.
Having $100,000 doesn’t automatically make someone more knowledgeable than someone with $100.
In fact, having more money can make mistakes more expensive. Before putting a large amount somewhere, questions become even more important:
• What is the goal?
• When will the money be needed?
• How much risk is reasonable?
• Should all of it be invested?
• Should part remain in savings?
• Should it be divided among different investments?
• Are there tax consequences?
• Would professional advice be appropriate?
Having more money doesn’t mean you need to make faster decisions. Sometimes it means you have even more reason to slow down.
That’s what GROW is about.
We’re building Savvii Savings from the beginning, and I don’t want this section to become a giant wall of financial information.
We’re going to build it piece by piece. Just like we do when we GROW.
Eventually, you’ll be able to go deeper into topics like:
Investing → Stocks, ETFs, Crypto, Real Estate, and Retirement
or:
Increasing Income → Career, Skill, Side Income, Opening A Business
or:
Growing Cash → Savings, Interest, CDs, Other Cash Options
But you don’t need all of that today.
Today, you only need the first step.
Your Savvy Goal for This Week: Give $1–$10 a Job!
Here’s your challenge:
Before this week ends, find between $1 and $10 that you can give a financial job.
That’s it.
It doesn’t need to be $100.
It doesn’t need to impress anybody.
Choose an amount that will not interfere with your bills, food, housing or other important needs.
Then decide what its job will be.
Maybe you:
• Save it.
• Move it into savings instead of spending it.
• Invest it.
If you already have an investment account that allows small-dollar or fractional investing, research what you’re buying first and make a small investment you’re comfortable with.
You can also use it to GROW yourself!
Put it toward a book, class, tool or other resource that helps you learn a useful skill. Or simply create a separate little GROW fund and add your first few dollars to it.
The amount isn’t the victory.
Making the decision on purpose is.
Then next week, ask yourself:
Can I do it again?
Maybe it’s another dollar.
Maybe it’s $5.
Maybe it’s $20.
You’re not trying to become wealthy in seven days.
You’re practicing the habit of giving some of your money a job besides spending.
That’s a savvy move.
I’m Savvii, you’re becoming a more savvy saver, and we’ll keep learning from here.
Start small. Understand what you’re doing. Keep learning. Keep growing. Keep being savvy.