Investing is a process of setting aside some money and allow them to accumulate faster than inflation. It will enable you to develop and add value to yourself.
Investing is not like gambling, even though it involves taking risks. Most short term rewarding investment poses higher risks. Some assets can eat your stake and take you back to square one. The most important thing to note is the total return you get from the investment.
You earn differently from your investment. Some investments can earn income while others give you profit by selling it after some time. Others do both.
You should know that there is a cost of running and investment. It can be in the form of maintenance fees, brokers’ fees, or even taxes.
Below are some of the best method of investing your money:
Have Your Money in The Bank
Putting money in a bank seems safe for keeping your cash but rarely gives enough returns on the investment. Mostly the bank’s rate of interest is slightly lower than the inflation rate. It, therefore, means that your cash at the bank is losing value with time.
If you don’t like risking your cash and looking forward to a long-term plan with your money, take it to the bank’s saving account.
Banking your money in a fixed account will bar you from using the money before the stipulated time. You should also understand you risk losing your money if the inflation rate increases.
Banking money is, however, better than keeping it under your mattress.
Investing in Art, Wine Antiques, and Collectibles
Collectables are usually affordable and can be an acceptable form of investment you can make. You can invest in and learn more as you move on. Collectables don’t bring in immediate cash but depends on the person who takes them at a higher cost than you bought them.
Investing in Property
Buying your home Is the best way of investing your money. from records, the value of a house raises more than the inflation rate. Rent increases nearly every year, and you will always find a place to live.
Once you start investing in properties, you can grow to more expensive ones as your income increases. You can buy a to –let property. Such properties will allow you to earn income as it appreciates.
The disadvantage of such an investment is that they need a large money commitment and accumulate revenue.
Investing in Bonds
Companies and the government borrows money and gives I.O.U.S. In the United Kingdom, such money is called gilt. You can purchase gilts as inequities via brokers or directly. They always have a sure interest rate and the redemption dates, which another borrower buys them at a higher price.
Government bonds are called sovereign debt and are usually presumably safer than company debt. You can sell back your bonds at any time, unlike the fixed saving account. However, you should note that bonds retail at the amount the owner wishes to sell them.
Invest in Equities Shares and Stock
Stock, equities, and shares are different names but the same thing. In large companies, the shareholders earn dividends according to their equities. Similar to buy-to-let properties, equities attract income and grow in value. It is because a company grows in value and increases its dividends. You can invest a small amount of your money in shares at a time. However, if you have a lot, you can channel them to an investment unit trust or unit trust.
Conclusion
Make fair use of your money while you can. Try investing your cash and give it time to attract profits. Choose the best investment plan that works well for you.
