With the financial diversity in this country, it’s difficult to classify anything as “common” or “uncommon,” but there are certainly some uses of personal loan money that are less common than others. Some are actually techniques for becoming debt-free faster.
For prosperity purposes, each of the items on this list are ideas for taking your personal loan money and doing something positive with it—whether that’s building wealth for yourself or taking care of loved ones. Think of these as investing, not simply spending your money.
Bright idea #1: Buy property or a second home
Okay, a personal loan typically won’t give you enough cash to fully buy a second home, but you can make a down payment on it. As for property, empty land is cheap in certain parts of the country. Buy a plot now and plan to build something on it later.
Bright idea #2: Build something on your land
And here it is. Remember that piece of property we recommended that you buy? Perhaps you had that idea yourself a few years ago. Now’s the time to use your personal loan to build something. It doesn’t need to be extravagant. Maybe just a small house to start with.
Bright idea #3: Take a college class (or two)
Student loans are a big commitment with serious consequences if you default. Small personal loans can cover a class or two and get you closer to earning a degree. Keep the amounts under $5,000, pay them off, then do it again. You’ll be a graduate before you know it.
Bright idea #4: Pay someone’s medical expenses
This is a philanthropic solution, so the benefit is purely spiritual. Pay for someone’s medical bills if they can’t afford to pay themselves. This is often done with family members or aging parents. In some cases, you can take out a line of credit to cover long-term medical expenses.
Bright idea #5: Open a new business
Okay, so you know that business idea you’ve been toying with? Go for it. If it works out, you can create an income stream that will pay off the personal loan for you, then everything after that is pure profit. There are online business opportunities for people with all skill and education levels.
Bright idea #6: Buy someone else’s business
Maybe you don’t have the motivation to start your own business. That’s okay, I haven’t moved from my couch since I started writing this article. But you can always buy into someone else’s business if you have the means. You don’t have to purchase the entire business. Just invest your money and take a piece of it. This can be done privately as a partnership or by purchasing stock.
Bright idea #7: Invest in Bitcoin
This is a very 2021 suggestion. Bitcoin had a net gain of 500% in 2020. It was going up at the rate of 200% per year before that and is expected to continue increasing in value. It’s a gamble, but chances are you’ll make more than what you pay in loan interest. If cryptocurrency is supposedly the future, why not get involved now?
Don’t be afraid to use your imagination
These are just a few ideas to help you get the creative juices flowing. Use your imagination. You could pay off all your credit cards—that’s always a good idea. Can you think of any others? When you have money, you can use it to make more money. Or spend it on something with a long-term benefit. Your choice.
By Kevin D. Flynn, a former fintech coach and financial services professional. When not on the golf course, he can be found traveling with his wife or spending time with their eight wonderful grandchildren and two cats.