One silver lining in the disaster that has been COVID is that nurses are being paid an unprecedented amount of money for their expertise. In general, travel nurses are making 2-4x during covid. Are you making this money work for you? Has your lifestyle inflated and eaten up all of your extra income? Here are a few avenues to consider when these large paychecks are rolling in.
Pay off Debt
Debt is absolutely the number one wealth killer. It has become part of American culture to incur debt at an early age and stay in debt until well after retirement. An astounding 80% of Americans are in debt. The most insidious consequence of debt is called “Opportunity Cost”. Being in debt shackles you to past purchases and often bars you from investing money in opportunities as they arise. In the long term, these costs can represent six and seven figures. Debt is absolutely the number one wealth killer. It has become part of American culture to incur debt at an early age and stay in debt until well after retirement. An astounding 80% of Americans are in debt. The most insidious consequence of debt is called “Opportunity Cost”. Being in debt shackles you to past purchases and often bars you from investing money in opportunities as they arise. In the long term, these costs can represent six and seven figures.
The great thing about paying off high interest debt is that it is a guaranteed return on your money. Paying off that boat loan at 12% represents a 12% return on your money, guaranteed. In my opinion, all debt other than your house should be completely paid off before you start investing. My wife and I were very fortunate to snag some great crisis contracts and pay off $106,000 in debt in 8 months! We made sure not to inflate our lifestyle and paid 70-80% of our income to debt. It feels so good to start with a clean slate and no debt in our 20s and 30s.
Real Estate
This is one I have been eyeballing pretty hard lately. The real estate market is in a strange place right now with an unprecedented number of foreclosures coupled with a large shift from urban to suburban/rural living due to covid. Real estate is the tried and true long term investment. Purchase a house, rent it out (to a travel nurse?), and let them pay your mortgage. Do this just a few times during your nursing career and you have a solid retirement portfolio. There are plenty of excellent resources on beginning real estate or starting that Airbnb empire!
Stock Market
The stock market is a rabbit hole you could spend years on, but there is one piece of advice I hear repeated over and over again for long-term passive investing. Put your money in an index fund and leave it. The S&P 500 has actually outperformed 85% of actively managed funds over 10 years and a whopping 92% over 15 years. This is good news for you, having such strong numbers available through an extremely passive investment. vanguard.com and robinhood.com are two great places for no fuss, simple passive investing.
401K with match
If your agency happens to have a 401K match program, this is essentially free money. The issue with 401K match with travel nursing is the vesting schedule. Most of these programs have a 5 year vestment, meaning that the matched amount is only 100% yours after five years. This takes away your freedom to switch agencies and could cost you quite a bit of money in the long run. Recruiting agencies love to use this and health benefits to anchor you to their company. Once you are there, they are far less incentivized to give you top dollar pay. I personally would opt for an IRA that gives you freedom and mobility.
Invest in Yourself!
My personal favorite, the side hustle! I know most of us are working extra hours during the pandemic, but creating a business and going all in has the potential to be the most powerful wealth accelerator. In 2018 on a lark, I started selling a product on Amazon. I honestly just thought it would tank (most products do) but I would learn about ecommerce from it. I spent a lot of time learning how to source the product, market the product, and deal with quality issues and the logistics of shipping. But after an initial investment of time, I now only spend about 1 hour per month “running the business” and have enjoyed an extra $3,000-$5,000 per month from it!My personal favorite, the side hustle! I know most of us are working extra hours during the pandemic, but creating a business and going all in has the potential to be the most powerful wealth accelerator. In 2018 on a lark, I started selling a product on Amazon. I honestly just thought it would tank (most products do) but I would learn about ecommerce from it. I spent a lot of time learning how to source the product, market the product, and deal with quality issues and the logistics of shipping. But after an initial investment of time, I now only spend about 1 hour per month “running the business” and have enjoyed an extra $3,000-$5,000 per month from it!
There are hundreds of thousands of ways to make extra income. A good place to start is always what you are good at. You have a unique skill set and just need to find the right angle to turn that into extra income.