How to grow savings fast
Dear Senior Living Adviser,
I’m a 63-year-old single woman who lost everything in the housing bust. I went bankrupt about 2 1/2 years ago and had to file early for Social Security benefits. I make $800 a month and I live in my daughter’s house for about $450 a month and have no other debt. I do have a car, so I do have gas expenses and receive about $65 in food stamps. I have about $5,000 in savings from doing small jobs for the past few years and I want to know: What is the fastest and easiest way for me to grow this money? I have a small interior decorating company and am the sole employee. Thank you.
— Debra Double-Down
You’ve certainly faced a lot of challenges over the past few years. It’s nice that your daughter was able to be there for you by having you move into her home.
There’s not a fast and easy way to grow your $5,000 into something worth a lot more. If I knew how to earn money fast, we’d all be rich. To double your money in five years, you have to earn an annual after-tax return of 14.87 percent. Those opportunities aren’t easy to spot and come with a fair amount of risk.
You can take your chances investing in the stock market, but stock prices don’t always go up and you can see your nest egg decline in value if the investments don’t do well.
Put the money to work in a CD or high-yield savings account and you’ll be lucky if it keeps pace with inflation — especially on an after-tax basis. Still, keeping it in the bank is better than hiding it under the mattress, so shop yields in your market or nationwide at Bankrate.
So what’s the answer? Your best bet is to add to your savings by spending less than you make and by growing your business as best you can. That’s a hard truth to tell a woman who’s recently been through bankruptcy, is on food stamps, took Social Security at age 62 and had to move in with her daughter. But it’s more realistic than trying to pick a $5,000 investment that will quickly and easily turn around your finances.
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