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9 ways to make your money work for you

Key takeaways

  • Managing money isn't just about spending vs. saving. The right moves could also help make your money work for you without much effort.
  • Investing appropriately could boost your wealth more than keeping money in safer places, such as a low-interest-bearing savings account.
  • Many investment strategies take time to pay off, and there could be consequences for withdrawing your money too soon.

Just as plants need sunlight and water to thrive, the right conditions could help make your money work for you. That could mean investing in certain kinds of accounts, being a careful budgeter, or trying these 9 suggestions that could help make your money grow.

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1. Keep money in an account with the potential to earn higher interest or returns

You might as well stash your money under a mattress if you're not holding it in a high-yield savings account, investing it through a brokerage account, or having it in another account that could come with higher earnings. Sure, keeping your money in cash gives you more control over it, but it reduces the chances of it growing. High-yield savings accounts, for instance, offer more interest on what you put in than a traditional savings or checking account would. Cash management accounts, which could offer many of the same benefits as a checking account, such as mobile check deposit and ATM debits, also tend to offer competitive rates. And over time, returns from investing in the stock market tend to be higher than what you could earn in a traditional savings or checking account. Still, past performance doesn't guarantee future results, and you could lose money in the stock market.

2. Give money enough time in the market

You can't expect your investments to grow exponentially overnight. In fact, you might not see any growth from day to day, particularly with lower-risk investments. A whole lot of nothing happening in the short term might tempt you to cash out.

But over the long term, you might benefit from compounding, or when earnings on your money also earn money. That's why it's about time in the market, not timing the market to predict when it's best to sell or buy: The longer you're invested, the longer compounding has a chance to do its thing.

Cashing out early is a possible growth stunter for another reason. Not only does it limit the time your money has to potentially grow, but some investment accounts and types of investments—such as 401(k)s and certificates of deposit (CDs)—could come with fees and/or tax penalties for withdrawing money too soon.

3. Don't give in to volatility

When you invest and the market goes up, your portfolio might follow. If the market goes down, your portfolio might be down too, and it could make you want to pull your money out. But heading for the exits too early could hinder long-term growth.

Bear in mind Wall Street history: Bull markets, when the market is going up, tend to last longer (median 42 months) than bear markets (median 19 months), which is when a market index falls by at least 20% from recent highs.1 Historically, stocks have expanded more often than contracted, and during those upswings, markets rose an average of 15% per year. They've even grown 1% per year during recessions.2

While volatility can be unsettling, being uninvested could be worse for your wealth. Some research has shown that missing just 5 good days in the market between 1980 and 2022 could have reduced portfolio returns by as much as 38%.3

4. Don't let taxes cut into profits

Your investment strategy could impact your taxes. For example, if you buy a stock through a taxable brokerage account and then sell it, profits from that sale are taxable capital gains. How much you'll pay on those gains depends on factors like how long you've held the stock and what tax bracket you fall in. But there's a strategy called tax-loss harvesting which allows you to sell investments that are down, replace them with reasonably similar investments, and then offset realized investment gains with those losses. The end result is that less of your money goes to taxes and more may stay invested and working for you.

There's also something called asset location investing, which takes into account where you hold investments (as in, the account type), as well as what you're holding. Certain accounts, including health savings accounts (HSAs) and Roth IRAs, allow certain tax-free withdrawals; and you're exempt from paying federal taxes for selling certain investments. (Municipal bonds are generally federally tax exempt.)

5. Intentionally set aside money for investing

If you don't purposefully save money, then you're likely to have less of it to invest that could potentially grow. Budgeting could help, especially if you build investing into your plan. Since there's less of a chance you'll spend money you don't see, consider signing up for your employer's retirement plan or HSA, and automating savings into those accounts, aka redirecting funds from your paycheck or perhaps a checking account to an investing or savings account.

6. Rebalance or diversify your portfolio

Let's say you planned for your portfolio to have X% in stocks and Y% in bonds. Then as the market rose and fell, your portfolio got out of whack, making you over-index in one of those asset types. There are 2 ways to get things back on track and help limit risk: Rebalancing is when you buy and sell holdings to change the ratio of how much you have in stocks, bonds, and cash to align with your goals. Diversification is another tactic. It's when you keep a mix of investments that don't usually move in the same direction. That way, when some investments drop, other parts of your portfolio might rise. Not making these changes as your portfolio changes could cause your money growth to slow.

7. Look at total comp packages before accepting a new job

Salary, title, and responsibilities might command most of your attention when evaluating a job offer, but don't neglect a new role's total compensation package. That would include your employer's contributions to health and disability insurance costs, and whether the company offers a retirement plan, HSA, tuition assistance, student loan repayment assistance, and employer matches to any accounts. These offerings could help you save more money more quickly, and some could even spare you some taxes. Other possible offerings, like equity, restricted stock units (RSUs), and stock grants, are a way to get into investing without having to front your own cash to do it.

8. Calculate the cost of leaving a job

Some companies require you to be vested, or at the job for a certain amount of time, before you get to keep, say, the employer match to a retirement plan or stock options granted as part of your compensation package. Make sure you run the numbers to see if leaving is worth it before you give up anything, or check if your new company is willing to pay those out as an incentive for you to join.

9. Never abandon accounts

Americans forfeit $1.5 trillion in retirement savings a year when switching jobs, according to Portability Services Network.4 Whether you have a 401(k), IRA, or other investment account, explore your options when you leave a job. And if you haven't done so in the past, search for unclaimed funds you may have inadvertently left behind. According to the National Association of Unclaimed Property Administrators, Americans got back more than $5 billion in forgotten money from bank accounts, insurance payments, refunds, safety deposit box contents, CDs, paychecks, and security deposits in a single year.5

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1. "Dalbar QAIB 2022: Investors are Still Their Own Worst Enemies," Index Fund Advisors, April 4, 2022. 2. This is based on the cumulative percentage return of a hypothetical investment made in the noted index during periods of economic expansions and recessions. Index returns include reinvestment of capital gains and dividends, if any, but do not reflect the impact of taxes, fees, or expenses, which would lower these figures. This return information is not intended to imply any future performance of the investment product. Past performance is no guarantee of future results. It is not possible to invest directly in an index. All indexes are unmanaged. Source: Bloomberg, S&P 500 Index total return for 1/1/1950–12/31/2022. Recession and expansion dates are defined by the National Bureau of Economic Research (NBER). Your own investment experience will differ, including the possibility of losing money. 3. Based on hypothetical growth of $10,000 invested in the S&P 500 Index 1/1/1980-6/30/2022. Source: FMRCo, Asset Allocation Research Team, as of June 30, 2022. Past performance is no guarantee of future results The hypothetical example assumes an investment that tracks the returns of the S&P 500® Index and includes capital gains and dividend reinvestment but does not reflect the impact of taxes, fees, or expenses, which would lower these figures. 4. "Portability Services Network launches nation's first solution to move workers' retirement savings when changing jobs,”, November 27, 2023. 5. "Unclaimed property programs returned over $5.4 billion to its rightful owner from July 1, 2022 – June 30, 2023,” National Association of Unclaimed Property Administrators,, 2023.

Investing involves risk, including risk of loss.

Past performance is no guarantee of future results.

Diversification and asset allocation do not ensure a profit or guarantee against loss.

The S&P 500® Index is a market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance.

Be sure to consider all your available options and the applicable fees and features of each before moving your retirement assets.

This information is intended to be educational and is not tailored to the investment needs of any specific investor.

The third parties mentioned herein and Fidelity Investments are independent entities and are not legally affiliated.

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.

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