“Make your money work for you” is such common personal finance advice that it borders on being cliché.
But what does it actually mean? And more importantly, how can you do it?
There’s no simple answer — or a single way to do it. In fact, almost everyone can find at least one way to put their money to work. Below, Business Insider rounded up eight methods to get you started.
Open a high-yield savings account
Sean Gould, a wealth strategist with Waddell and Associates and a certified financial planner, explains that before sending your money off to do the heavy lifting, you'll want to have an emergency savings account of about six months of living expenses stored in cash.
A smart place to keep it is in an FDIC-insured high-yield checking or savings account, where it can generate more value as it waits.
A typical savings account offers an interest rate around 0.01%, and a typical checking account is the digital equivalent of putting your money under the mattress. However, high-yield checking and saving offer interest rates that exceed 1% -- 100 times what you'd get otherwise.
These accounts are usually available at online banks, which keep costs down by forgoing brick and mortar locations. NerdWallet provides comprehensive lists of high-yield checking and high-yield savings.
Develop streams of passive income
Passive income is the term colloquially used to define any money earned with little to no effort expended, according to Investopedia.
Once you've set it up, passive income streams earn you money while you sleep. Sounds too good to be true, right? But fear not -- it's not a get-rich-quick scheme. Creating any streams of passive income requires an investment upfront, whether of your time or money, but can lead to huge payoffs later.
Common forms of passive income include real estate investments or silent partnerships in businesses, but it can also be generated by anything from making YouTube videos to using affiliate marketing on your blog.
Store it in superannuation
Retirement accounts are investment accounts, meaning your savings are invested in the market and have the potential to grow exponentially.
'The key is to get money in to your super,' says Gould. 'Save as much as possible to have your money work for you tax-efficiently and to get money in the markets. The first bucket outside of the emergency fund is the super up to the match (if your employer provides one). You don't want to give away free money.'
Invest it in the market
If you maxed out your super, next is an investment account, Gould says. 'The key is participating in the markets.'
Being in the markets is not the same as trying to time the markets: Pulling money in and out to take advantage of favourable fluctuations and minimise the loss when the market dips is a strategy most experts advise against.
Over time, Gould says, worrying dips in the market should even out, resulting in an overall gain. To take advantage of this effect, though, you have to leave your investments alone.
And, he advises, 'Don't have more than three to six months sitting in cash. People like the comfort of money in cash because they're burned from 2008 and 2009, but inflation will eat away at your cash. Sitting in comfort is not a good way to make money.'
Choose credit cards with rewards you'll actually use
Using a credit card might not feel like putting your money to work, but choosing a card with rewards appropriate for your lifestyle (read: airline miles cards aren't great for people uninterested in travel) means each dollar you spend on your cards is doing double duty.
'As a financial planner, we don't like debt, but if you have the cash flow and predictability in your budget and you can pay off your bill every month, there are great credit cards out there,' says Gould. (See some of the best credit cards for every lifestyle.)
If you have credit card debt, this strategy isn't for you -- the key to making your money work with your cards is being able to pay off your bill in full every month.
Become a silent partner in a new business
Starting your own business can be a risky move, but if everything goes well, it can certainly pay off. Another way to reap the benefits of a successful new startup without the stress of getting a company off the ground is to become a silent partner who invests capital but doesn't handle any of the day-to-day operations.
The prospect comes with pros and cons. You won't have any say in how the company is run or the daily decisions active employees make. But you'll earn a cut of any profits the business makes without putting in any long hours.
However, you still run the risk of financial loss if the venture tanks.
Invest in real estate
If recent history has taught us anything, it's that housing isn't a guaranteed investment. That said, if you have the available cash and risk tolerance, investing in residential or commercial real estate may be a good fit.
Investing in real estate is two-pronged: You could consider buying a single home to live in to be an investment, or you could invest beyond your home, into land to sell or stores or homes to rent. Branching out beyond your own home 'depends on your market and the appetite for rental real estate,' Gould says. 'In most markets, if you can handle the headaches and there's room, it's an option.'
But in the spirit of diversifying your assets, Gould says to bear in mind that many homeowners already find real estate to be the largest asset in their portfolio, and cautions would-be real estate investors to be wary of weighting their portfolios too heavily toward one kind of asset.
Pursue a professional degree or certification
Another way your money can work for you is by increasing your worth on the job market. 'If you have time and money to invest in furthering your education, you can make yourself more marketable to become a higher earner,' Gould says.
That doesn't only mean sinking tens of thousands of dollars into grad school. Making yourself more marketable as an employee or professional might be as simple as joining a workshop to improve your public speaking or taking a class to master Microsoft Excel.
If you're looking to increase your skill set but don't have the money to help you do it, there are even tons of great free business classes available online.