Maximise Your Money with these Tips and Investments
There is no shame in admitting that what you have is not enough to see you through your future. Most people need more money to feel financially secure going forward, so that their lives will be safer and more comfortable as they age. The fact of the matter is, what you do today with your money in order to improve your future life will pay dividends when the time comes. If you compare it to exercise, you understand that if you exercise now, you will reap the benefits in terms of your health as you get older. You will be more able to deal with illness and disease, for example. The same goes for your finances. If you are clever and are able to put some money away now, in some sort of investment portfolio, when the time comes and you need the extra money, it will be there ready and waiting. There is absolutely no reason not to invest. It is up to you how to do it, but having funds simply sitting in a savings account makes no sense.
Okay, so with that in mind, here are some ideas on how to maximize your money.
Get out of debt and budget
The absolute first thing you need to do is get rid of those pesky credit card debt, loans, catalogues, etc. The more debt you have, the less the money you earn from your employment can work for you. You should not be throwing money away to creditors every month. There are the numerous amounts of fees you have to pay, not to mention the interest. There is also the stress of debt because it weighs heavily on your mind. This can actually cause you to spend more money on things that are not going to help, such as alcohol as a coping mechanism. It’s a vicious cycle. Anyway, it may be worth your while consolidating all your debts into one, having the conversation with the debtor to see if you can reduce the interest rate, for example. Then look to pay it off as quickly as possible. As long as you have debts, you will not be able to maximize the income you earn. In addition, learning how to budget is an absolute must. If you are going to have anything in the future, you have to live within your means. Most of us have a life expectancy of around 80 years. You do not want the majority of those years worrying about debt. So, learn how to say no to the inner devil that tells you to spend and waste money.
There are many different types of investment, and you need to do a little research and discover which ones are best for you. You can have long term or short term investment, high risk or low risk, for example. Common types of investment, include shares, bonds, funds, Government bonds, property, land, setting up your own business. There are also collectable items, including artwork and wine. However, when you decide on the type of investment you want to work with, you need to ensure that you are in possession of all the facts. You need to understand the investment, do not allow yourself to become bamboozled by clever jargon from a well-trained broker. Always think about what you want to do, never make a spur of the moment decision, and ensure you diversify your investments. When it comes to investment, there is no such thing as a sure thing, so you need to understand that what you risk you could lose. But, if you have spread your money around, then if the worst does happen to one investment, at least you have a plan B, C, D, and F.
The stock market
When people think about investment, they usually think about the brokers on Wall Street at the stock exchange buying and selling in a room full of excitement and emotion. The fact is, the stock market is a great place to invest, and some people have been extremely lucky and have made a fortune this way. You buy shares in a company when they are low, and sell them when they have increased in value. Simple. Or is it? It all depends on the severity of the risk. Risk can be mitigated, however, if you are prepared to do a little research. You can spend time learning about the companies you intend on investing in by reading their press releases, their goals and visions. What is the future of the company? Read what experts say about the company. What are the reviews like? You cannot purely determine the future health of a share by viewing the value of the stock over any period of time. The risk also depends also upon the amount you intend to invest, and the length of time you intend to invest it over. Monthly dips and variations in share value are not too much of a concern if your plan is to hold the stock for thirty years. Even recession is mitigated here, obviously if the company survives it. In addition, if you do intend to hold the stock for that long, a company with a high dividend value is something that would make sense. You will usually get a return, once, twice, or four times a year. Occasionally a company will pay irregular dividends although this is not common. You may want to invest in a company which speaks to you ethically and morally. It’s up to you, but the stock market is a way to make your money go further.
A fund is another form of investment where the money is pooled together from many different investors in a diverse portfolio of investments, including the stock market, bonds, countries, debt, etc. They are controlled by a specialist money manager who you purchase units from. The fund consists of many units. The money manager allocates the funds assets in an attempt to drive a profit. If you were going to go down the fund route, you will need to pay a fee, called a ratio to the manager. The pension pots for most companies is in a fund.
Financial spread-betting is another way to make money off the stock exchange. However, the difference with this type of investment is that you do not actually buy shares. Spread-betting is, kind of what it says on the tin, it is more like a bet, but it is a bet that can be much more informed if you are prepared to do your homework. It works by you looking at the market value of a particular share at that moment. Then you place a bet on whether or not you think that the share price will rise or fall. Again, this will involve a lot of research, but it is possible to make a lot of money this way.
Savings account and ISA
Bank accounts such as ISAs are a relatively safe way of making your money work. You can add £20,000 a year into an ISA, and when the interest is added, it is tax-free. There are many different forms of ISA, such as an ordinary cash ISA, or a stocks and shares ISA. Do a little bit of hunting around and find out the best interest rate.
Property and land
Investing in property is always a good option. The house prices are doing well, and these days there are plenty of opportunities to buy land to build on. In fact, there a government initiative that was bought in on 1 April 2016, called the right to build legislation, which makes the process of building your own home far more straightforward than it used to be. Local councils have to help you. We all need somewhere to live, and the UK property market could be an excellent investment if you have the capital. There are opportunities to buy homes to let out. This can make a lot of money, as you can make money from each room if you intend to let is out as a shared house, for example. There is always buying cheap and selling on quickly if the owner is desperate for a sale. You should set up alerts from the property websites, so you know when a house asking price has dropped. You may be able to make a good return on a house that needs a lot of DIY. Obviously, ensure you get the home thoroughly investigated first.
Start a side hustle
If you are entrepreneurial minded, it is definitely worth your while having a go at starting a side hustle, alongside your day job. There are many ways to do this, and you may have a passion that could work for you if you put your mind to it. Are you creative and could sell artwork? Could you sing for a band? A side hustle could not only put a bit more money in your back pocket, but it could fulfil something in you that you have denied yourself.