The Easiest Way to Make Cash and Start Investing

Do you want to invest but don’t have the cash? Start saving, collect points, and use the cash to invest in this strong dividend stock.

| More on:
A close up image of Canadian $20 Dollar bills

Image source: Getty Images

New investors may question how they can even start investing. This comes at a time when everyone is pinching pennies to try and come up with rent, never mind attempting to invest in stocks. And it’s really unfortunate, because, honestly, now is the time to buy!

The TSX is still down today, as are so many valuable stocks to pick up. And yet because we’re all trying to get our cash flow under control, we’re missing out on the opportunity.

Today, I’m going to recommend the easiest way to start saving and start investing.

Cancel your credit card

I don’t think people realize the opportunity being missed by ignoring your credit card. On the surface, I totally understand. Using your credit card is like constantly putting yourself into debt. Or so it can seem. But if you simply create a weekly alert to pay off your card, it can be a huge way to save money.

First of all, I would replace the credit card you have. Honestly, I don’t really care which card it is; I would still recommend replacing it. Why? Because there are so many deals out there! These deals can save you money by providing you with an annual fee rebate. They can also provide you with bonus reward points in the tens of thousands. Do you know how long it would take you to collect those points?

And those points are super valuable. They can be used to pay for pretty much anything. You can use them to pay off your credit card. But I would use them to purchase gift cards. You get a way better deal this way and can buy more items you need.

Use it for everything

The next step is to use your credit card for everything. I seriously mean that. Did you buy a coffee? Put it on the card. Did you buy groceries? Put it on the card. Gas? Chips? An ice cream for your kid? I don’t care how small it is; everything adds up. Even if you go the route to keep your credit card, this is the way to create more rewards points that can help you save money.

What’s great about this is you’re not spending more than you normally would. One of the best ways I collect rewards points is paying bills on my credit card. If there’s an option, take it. If you’re not sure, call. This can create thousands of points every month from payments you make anyway.

Start investing

So, now you’re using your points to pay off your card or to buy gift cards to pay for items you need. You should now be able to start investing, because you’re finally saving some cash flow! An ideal amount is between 5% and 10% of each paycheque, so do whatever you’re comfortable with. And even if you can only invest $5 per month, that’s $5 more than you would have had. And it’s $60 more at the end of the year.

Finally, you’ll need a strong stock to invest in. Right now, I would recommend a company like Slate Grocery REIT. It has stable cash flow through its grocery chains and continues to expand. It’s cheap, trading at 5.91 times earnings, and it has a substantial 8.03% dividend yield. So, you can turn that $60 into an extra $5.25 in dividends guaranteed.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Increasing yield
Dividend Stocks

3 TSX Stocks With High Dividend Yields

These three high-yielding dividend stocks would be excellent additions to your portfolio in this volatile environment.

Read more »

Payday ringed on a calendar
Dividend Stocks

New Investors: 3 Top TSX Dividend Stocks That Pay Cash Monthly

Canadian investors looking for monthly dividends have plenty of options on the TSX. Here's three of my favourite stocks for…

Read more »

woman data analyze
Dividend Stocks

These U.S. Stocks Are No-Brainer Additions to Your Portfolio

Buy these two no-brainer U.S. stocks if you want to gain exposure to international stocks in your self-directed portfolio.

Read more »

Value for money
Dividend Stocks

1 Value Stock Every Canadian Investor Should Own

This value stock not only has a solid present, but a stable future at incredibly cheap and even oversold prices!

Read more »

sale discount best price
Dividend Stocks

Passive-Income Alert: 2 Great Canadian Dividend Stocks Trading at Cheap Prices

TFSA investors can now buy top TSX dividend stocks at discounted prices for a portfolio focused on passive income.

Read more »

Growing plant shoots on coins
Dividend Stocks

Long-Term Investing: 2 Top Dividend-Growth Stocks to Power Your Portfolio

While many growth stocks remain under pressure in this environment, here are two top dividend-growth stocks to buy now and…

Read more »

edit Safety First illustration
Dividend Stocks

2 of the Safest Dividend Stocks on Earth Right Now

Royal Bank of Canada (TSX:RY)(NYSE:RY) is one of the safest stocks on earth, historically speaking.

Read more »

TFSA and coins
Dividend Stocks

TFSA 101: How Retirees Can Earn $407.50 Per Month Tax Free for Decades

Retirees can buy top TSX dividend stocks at cheap prices right now for a TFSA focused on passive income.

Read more »