Let me get this out there right at the begiingin of this article. i am in no way a professional investor. I do not follow the market trends, keep my finger on the pulse of global politics and economics or anythng like that at all.

Everything in this article is based on hearsay, my own prejudices and a few hints and tips I have picked up along the way from equally unreliable people. SO please take all of this with a pinch of salt.

The only real piece of investing advice I have for you, is that when you have money to invest, find an expert you can trust and then trust them. Don’t listen to me, your mum, your gran, that strange lady across the road who wants to sell you Bitcoin.  Do your research and trust the experts. That is all.

So , with my level of expertise clearly laid out on the table and a firm warning to you not to trust me, here is what I do know about different types of investments

Cryptocurrency

There are a lot of new investment options like cryptocurrency that are quite popular but there are a lot of risks involved and trying to anticipate those markets can be difficult.

In the last two years or so, it seemed like every man and his dog was trying to sell you Bicoin, or a share in a company that mines Bitcoin or something like that. And yet, in 2018, they seem to have gone a bit quiet, or is it just me?

The reason that cryptocurrency has been a popular investment is that some people made big money in a relatively short period. But investments with those sort of returns always come with a greater risk.

I’ve yet to meet one of the Bitcoin speculators that could adequately explain to me just exactly what Bitcoin was or exactly what they owned. They tried to explain that it was a big money-making machine that you put £10 in ad got £30 out, over and over again. But somehow i think that’s not happening any more

I’ve yet to see shops taking Bitcoin (it may come but not yet) but to be honest I would rather keep my money in good old fashioned pounds and pence. Or maybe in Euros….

If you’re trying to invest your savings for something specific in the future, like your child’s university fund, you’re better off putting it into low yield investments that will build over time, without so many risks.

Property

Image by Pexels

Property investment is very popular at the minute because people think there aren’t too many risks involved and historically the return is good.

But I don’t know about you, I look at my local area and wonder how much further property could possibly rise? Already the price of a three bedroom house and most 2 bedroom flats are way beyond the earning power of most professional couples.

Add the cost of servicing student debt, and the cost of commuting into London, and I don’t think my children will be able to buy a house in their hometown unless I move into a squat and give them all the capital on the family home.

If you are investing in property with a mortgage, be aware that interest rates have been at a historical low for a long time, and can only move in one direction.  If you are too young to remember this, take a look at the last time interest rates rose and where they got to, and see what that would mean for your mortgage repayment. If that doesn’t scare the pants off you, then go ahead.

Another possible investment is buying a holiday home abroad somewhere. Property prices abroad are likely to be cheaper than they are at home so you won’t need as much initial investment. You can also charge a higher rate for holiday home rental than you could for a normal residential property. Visit LondonLovesBusiness for more information on investing in holiday homes.

There are a few downsides to buying a holiday home that you should be aware of.

First off, you can’t always guarantee that you’re going to have people staying there all year around, it’s going to be seasonal. However, you can usually offset that because you’re charging higher rates when people are staying in the property. You’ve also got the chance to use the place yourself.

The other major downside is that you’ll have to handle all of the maintenance of the place from overseas, that means you’ll probably have to pay a property management company out there. These costs will be in foreign currency, which may fluctuate against the price of sterling, the prices could rise sharply.

Gold

Photo from Wikimedia

Gold has long been a popular investment option for people that are looking for low-risk ways to increase their savings.

I remember when I was a child my dad worked in a bank, and one day he let me see the safe with all the gold bars in it (would never happen nowadays but this was before Health and Safety, when dads working at weekends would routinely take kids into offices).  It still boggles my imagination that you could own one of those glorified metal paperweights and it would be worth thousands of pounds, but there it is – this is the world we live in.

They say that gold is as close as you can get to a perfect investment option because, although its value goes up and down a bit, it always shows steady growth over time. That growth might be slow but there is low-risk/ zero risk involved. It’s also a good investment to put your money into during times of economic hardship.

That being said, I think our local Cash for Gold Shop has closed down now – that was another fad of a couple of years ago that seems to have gone away again. so whatever people say, and no matter how safe they say it is, make sure you do your homework.

Savings Accounts

Savings accounts are the boring old workhorses of the investment industry. Simple, safe, but paying boringly low returns.

You won’t get a very big return on your money but, over time, compound interest can boost your savings by quite a bit. The key to finding success here is to move your money around. Always keep checking the latest deals on savings accounts so your money is always in one with a high interest rate.

It’s also important that you keep an eye on inflation as well. If the interest rate on your savings account is lower than the rate of inflation, your money will actually lose value in real terms (the low-risk of goods and services you can buy with it). As long as you’re moving your money around regularly to get the best deal, this is a good way to increase your savings without the risk.

Collections

If you have a hobby that involves a collection of some kind, you could turn it into a long-term investment option.

Things like classic cars, wine or art are all what are known as hard assets. These items will continue to increase in value over the years and then you can sell them at a later date if you need the money, or pass them down to your children as assets.

However, you’ve got to remember that not all of these hard assets are going to be worth something so there is some level of risk involved. Wine can perish, cars may deteriorate if they are not used, and may get damaged if they are used.  You can protect your money properly by speaking with a relevant expert and asking them for advice on which items to invest in and which to avoid.

So there you are – my views on investing.  I offer no concluding advice. Investin what makes you happy and make sure you take good advice.

Please take a look at these posts I wrote earlier

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