• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Start Here
  • Work with David
  • Our Services
  • Contact
Young Adult Money

Make more. Save more. Live better.

  • Blog
  • Credit Cards
    • Rewards
    • Cash Back
    • Travel
    • Airlines
    • Hotels
    • Balance Transfer
    • Student
    • Business
  • FREE Budget Spreadsheet
  • FREE Student Loan Spreadsheet
This Just In... Check out the latest travel rewards credit card offers

5 Ways to Find Cash to Invest in the Stock Market

By David Carlson / Last updated: March 8, 2020 / How To, Investing, Make Money, Personal Finance

We may receive compensation from companies mentioned within this post via affiliate links. Read our full advertiser disclosure. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
Pin150
Share14
Tweet
Email
Buffer11
Share
175 Shares

 
One of the keys to financial independence is building up your investments in the stock market. But how can you find extra cash to invest? Here are five different ways to increase cash flow to help build up the amount you have in the stock market.A few years back a colleague and I would regularly discuss business and investment ideas.

One thing he was really interested in was real estate investing. He wanted to own a bunch of properties and rent them out, and perhaps build some sweat equity by purchasing properties that needed some TLC.

Here’s the thing: renting out properties isn’t necessarily the difficult part (though I understand the effort involved from my experience renting out an apartment the past seven years). The difficult part is having the cash to invest.

In a similar way, everyone would love to have a decent amount of dividend income. But the tough part is actually getting your hands on the cash to invest in the stock market.

The prospect of living entirely – or even partially – off dividend income can be motivating. That motivation can be used to find more cash to invest, which speeds up financial independence, regardless of whether that is from dividend income or more broadly from building up your stock portfolio.

Before we dive in, though, here are a few things to keep in mind:

  • Emergency Fund – One of the pillars of a solid financial foundation is an emergency fund. Having 3-6 months of expenses socked away in cash can put your mind at ease and helps avoid credit card debt. Be sure you have an emergency fund before investing.
  • High Interest Debt – We’ll get into the “invest versus pay off debt” debate later, but one thing that is a no-brainer is high interest debt. Debt that is in the double digits, which is typical with credit card debt, should be paid off prior to investing more money in the stock market.
  • Understand Your Cash Flow – This post truly is focused on increasing cash flow. With that in mind, it’s obviously important to understand what your cash flow is. If you don’t already calculate your income and expenses I recommend using Tiller to pull data from all your financial accounts.

Let’s dive into the different ways to find – and create – additional cash flow that can be diverted towards investing in the stock market.

 

1) Lower Recurring Expenses

 
Lower recurring expenses is a fancy, if not more specific, way of saying spend less money. Recurring expenses include things like subscriptions, housing costs, car loans, cell phone bills, groceries, and so on. The reason I think it’s worthwhile to focus on recurring expenses is because you get the savings month after month after month.

Let’s use cable as an example. I recognize many have already cut cable out of their expenses, but it’s still a good example to illustrate the value of focusing on recurring expenses (plus there is still more than 70 million who haven’t cut cable!). If you can cut out a $100 a month cable bill and replace it with a $25 Sling TV subscription with a digital antenna, you would have an additional $75 of cash flow each month. That’s an extra $75 that you can divert towards building your investments.

As I mention in my book Student Loan Solution, there are a variety of categories you can focus on cutting back on. As a general practice, you should go through each spend category one-by-one and see if there are any opportunities to cut spending. This is exactly how businesses go about cost cutting, and it can work just as well for your personal finances.

 

2) Lower the Interest Rate on your Debt

 
I want to specifically call out interest rate on debt because of what a big impact it can have. Someone with a car loan at 1.0% is paying significantly less over the life of their loan than someone with the same care loan at 6.0%. The same logic can be applied to any debt, including a mortgage, credit card, or student loans.

Student loans are a bit unique in the sense that you may want to keep higher-interest federal loans than refinance at a lower interest rate with a private company (I go into detail here on whether you should or shouldn’t refinance student loans), but other debt is more straightforward. If you have credit card debt you are working on paying down, it may make sense to shift the debt to a credit card offering a 0% APR balance transfer (the 0% APR period typically lasts 12-18 months). It also may make sense to look into refinancing credit card debt into a lower-interest personal loan.

Since this post is about finding cash to invest, inevitably the pay down debt or invest debate will come up. I tackled this in Student Loan Solution, where Erin Lowry of Broke Millennial shared that in the research for her book Broke Millennial’s Guide to Investing she found that there was a general consensus that 5% was the benchmark. If your interest rate is less than 5% you should invest instead of pay down debt, and if it’s above 5% you should focus on repaying debt before diverting additional dollars towards investing.

 

3) Increase Income at your 9-5

 
Increasing income at your 9-5 is easier said than done, I know, but it is a way to find extra cash to invest in the stock market (potentially a material amount). Think of someone going from $40k to $50k, or $55k to $70k. If lifestyle inflation is avoided there is potential to invest an additional $5k-$10k in each situation after taxes are taken into consideration.

There are many factors that come into play here, and I recognize that not everyone is able to increase their income at their 9-5. They may be new to their job, have compensation tied to experience (i.e. teachers), or work in an industry that is more difficult to move around in. Due to life circumstances it also may not be the ideal time to ask for an increase or to look for a job externally.

With that being said, a couple ways to increase your income at work is to ask for a raise or move into a new job. A few tips:

  • Use Salary Data as Support – There are sites like Glassdoor and Payscale that provide crowd-sourced salary data for various positions at companies all across the United States. This can be good data to leverage when asking for a raise. Here’s how to find and compare salary data.
  • Be Open-Minded about External Opportunities – Some companies pay more money than other companies for similar jobs. It’s always been that way and always will. Glassdoor can help you identify higher-paying employers in your area. Leaving an employer is never easy and it’s tough to know whether the company culture will be better or worse, but I would suggest at least keeping an open mind to taking an external offer. I also would recommend having an idea of how much money and what sort of job it would take for you to leave for an external employer. An external employer looking to bring you in is more likely to meet your demands than your current employer.
  • Keep a Record of Accomplishments – In our world of once-a-year reviews, it’s important to keep a running list of what you accomplish on a monthly or weekly basis, if not daily. This will make review time easier as you will be able to quickly pull together a list of examples of achievements the past year.
  • Regularly Look at Job Openings to Identify Trends – Even when you are not looking for a new job, it can be beneficial to look at job postings. Why? Because you can get a sense of what soft and hard skills employers are looking for, and then spend the next few months developing those skills.

Ultimately not everyone is going to be able to increase their income at their 9-5. If you are in that situation – and even if you are not – consider starting a side hustle.

 

4) Start a Side Hustle

 
A side hustle, or in other words any way to make money above and beyond your 9-5 job, has so much upside. The most obvious benefit is additional cash flow that can be used to pay off debt, invest, or take a well-deserved vacation. But beyond that it helps diversify income streams, potentially creates a new full-time job or business, and in general opens you up to additional opportunities. If I hadn’t started my blog seven years ago my life would look much different and I would have never had been given some amazing opportunities.

I want to be clear that a side hustle is not for everyone. If you work sixty hours a week at your 9-5 and come home exhausted each night, a side hustle generally isn’t a good idea. Thankfully there are a wide variety of side hustles. Some people need cash flow, and they need it NOW. A traditional part-time job may be the best situation. Others may have dreams of building a business that would allow them to leave their 9-5 job one day. They may not make much – if anything – off their side hustle at the beginning, but it can result in a windfall of cash down the road.

If you are interested in starting a side hustle and want to find the best one for you, here’s 50+ online and at-home side hustle ideas and here’s 10 ways I’ve personally made side income.

 

5) Get a Higher Interest Rate on your Cash Savings

 
This last idea will only have a material impact if you have an established emergency fund you keep in a savings account. Even those who don’t have an emergency fund most likely have it as one of their top money goals.

My wife and I built an emergency fund a few years back, and it was one of the best moves we made. Knowing there was cash in the bank if we needed it helped significantly with any stress we had around money. We made one dumb mistake for a number of years, though: we kept the cash in a savings account at a local bank.

Our interest rate? 0.01%.

We were basically getting zero dollars in interest, despite having a significant amount of money sitting in an account at the bank. Once you factored inflation in, we were basically losing money.

Switching to a high-yield savings account at a different bank gave us more than $500 in additional cash flow each year. That’s an extra $500 that we are able to put towards investments. All we had to do was take the time to open a savings account at CIT Bank (which pays 2.20% APY at the time of this writing) and shift our savings over to it. Excluding the time and effort it took to establish an emergency fund (which was hard work), switching banks and making an additional $500 a year was one of the easiest ways we’ve made money. And it repeats year after year.

 
At the end of the day, these are all good things to consider looking into regardless of what situation you are in. Extra cash doesn’t have to be used for investing in the stock market – it can be used to pay down debt, invest in real estate, save up for a vacation, build an emergency fund, and so on. Whatever your goal may be, increased cash flow doesn’t hurt.
 
 

Check out some of our favorite personal finance resources:

Are you getting the best credit card rewards? Check out the top cash back credit card offers (updated daily)

Make extra money: 15 ways to make money from your computer

  • Get our FREE Automated Budget Spreadsheet and our Student Loan Spreadsheet

Get the First Chapter Free!

Student Loan Solution Cover - 3D

Join our online community and get the first chapter of the book Student Loan Solution absolutely FREE!

Pin150
Share14
Tweet
Email
Buffer11
Share
175 Shares

David Carlson

David Carlson is the founder of Young Adult Money. He is a nationally recognized speaker and the author of Student Loan Solution (2019) and Hustle Away Debt (2016). His opinions have been featured on such media outlets as The New York Times, The Washington Post, Cheddar, NBC's KARE11, and more.
Connect:

Comments Policy

Comments, responses, and other user-generated content is not provided or commissioned by this site or our advertisers. Responses have not been reviewed, approved, or otherwise endorsed by this website or its advertisers. It is not the responsibility of advertisers or this website to ensure that all comments and/or questions are answered. With all that being said, please comment away!

Reader Interactions

Comments

  1. Leonardo Candoza says

    My personal bias is that starting a side hustle is the best way, but the most important thing is to be actively focusing on funneling more money into investments – that is how the real wealth is built!

Primary Sidebar

Credit Cards

  • Best Travel Rewards Cards
  • Best Balance Transfer Cards
  • Best Cash Back Credit Cards
  • Best Business And Side Hustle Credit Cards
  • Best Student Credit Cards

Start a Blog:

How to Start a Blog that Makes Money
 

Top Posts

  • 15 Ways You Can Make Money From Your Computer Right Now
  • When You Should and Shouldn’t Refinance Student Loans
  • How Much Money You Will Need to Make $1,000 in Dividends

Free Spreadsheets & Downloads

  • Free Automated Budget Spreadsheet
  • Student Loan Repayment Spreadsheet
  • The Ultimate Personal Finance Checklist
  • 401k Spreadsheet to Analyze your Options
  • Wedding Budget Spreadsheet
  • 52 Week Money Challenge Spreadsheet and Printable

First Chapter Free!

Join our online community and receive the first chapter of Student Loan Solution absolutely FREE.

If you don't see the email in your inbox, please check your spam folder.

Connect:

Categories:

Search:

Get the New Book!

Student Loan Solution: 5 Steps to Take Control of Your Student Loans and Financial Life is available on Amazon by clicking here, or by clicking on the graphic below.

Make more. Save more. Live better.

Site Directory:

  • About
  • Contact
  • Advertise
  • Recommendations
  • Finance Tools
  • Credit Cards
  • Insurance
  • Banking
  • Investing

Disclaimer | Privacy Policy

Feedback? Questions?
Contact us and let us know what you think.

Connect:

Search This Site:

Copyright © 2012–2024 Young Adult Money, LLC / All Rights Reserved
Designed by LizTheresa.com / Developed by Nuts and Bolts Media

Manage your privacy

To provide the best experiences, we and our partners use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us and our partners to process personal data such as browsing behavior or unique IDs on this site and show (non-) personalized ads. Not consenting or withdrawing consent, may adversely affect certain features and functions.

Click below to consent to the above or make granular choices. Your choices will be applied to this site only. You can change your settings at any time, including withdrawing your consent, by using the toggles on the Cookie Policy, or by clicking on the manage consent button at the bottom of the screen.

Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Statistics

Marketing

Features
Always active

Always active
Manage options Manage services Manage vendors Read more about these purposes
Manage options
{title} {title} {title}
Manage your privacy

To provide the best experiences, we and our partners use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us and our partners to process personal data such as browsing behavior or unique IDs on this site and show (non-) personalized ads. Not consenting or withdrawing consent, may adversely affect certain features and functions.

Click below to consent to the above or make granular choices. Your choices will be applied to this site only. You can change your settings at any time, including withdrawing your consent, by using the toggles on the Cookie Policy, or by clicking on the manage consent button at the bottom of the screen.

Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
Manage options
{title} {title} {title}