Five smart ways to invest your money
Once your business starts earning you a healthy profit, what next? We’re so used to worrying about not having money that we don’t consider that having more than we need may be just as big a problem!
But you do need to think about what you do with your profits carefully. Invest them wisely and they’ll continue growing for you, establishing a nice nest egg for the future, or giving you a pot to dip into if you need to expand your business.
Make a bad choice (or none and simply leave them in a low-interest bank account) however, and they’ll gradually waste away, rendering all the effort you put into earning the money in the first place futile.
There are plenty of opportunities to choose from
So what can you do? Find a savings account with a reasonable rate of interest? Investigate promising investment funds? Or is there another way to invest them? Perhaps one that ties in with a hobby or interest?
As Patrick Vernon explains, there are many more investment opportunities for your money than you may think.
Five smart ways to invest your money
There are two main types of investor – those who are happy to take an impulsive gamble, and those who research their options extensively before making a decision
Whatever type of investor you might be, here are five smart places to put your money. Choose wisely and you could see a promising return.
According to the Telegraph, if you have a casual £10,000 lying around you can start investing in wine. Okay so not everyone has that amount of money to play with – in fact many people today struggle to afford a tiny one-bed house that requires a similar priced deposit.
But you don’t have to have thousands to invest to get into wine. You can start small, buying one or two bottles of good vintage at a time until you build up a collection.
Once you have invested your money in a decent collection it’s a good idea to insure it. You will typically pay £15 per case to cover them.
Investing in the UK property market has long been considered a smart solution, and with the new Stamp Duty regulations it’s estimated that buy-to-let investors will save £50m each year in total. (Invest the money you save on Stamp Duty in enhancing your property and you’ll enjoy an even higher return on your rent!)
Never invest your hard earned cash in something you don’t understand, no matter how lucrative the return looks. But if you do your research and buy well, property can offer a lucrative return. And if you’re willing to renovate a property yourself and deal with the trials that come with being a landlord, you could see those pennies turn into pounds even faster.
Overseas property is a smart choice as people buy to rent out to holidaymakers throughout the year. Portugal is a popular destination for investors thank to its sandy beaches, great weather and delicious seafood. There are hundreds of great properties available, and with everything from modest apartments to grand villas there’s plenty of choice for any budget (you can find out more here).
If you’re an avid art fan or are fully immersed in the world of comic books there is money to be made – if you can bear to part with a great collection in the future.
If you have a good eye, buy art from graduate shows or up-and-coming young artists, and your gamble could reap a healthy profit if one of your artists emerges as the next Tracey Emin.
Similarly, if you source and invest in high quality editions of certain comics, you could see a big return in the future. For example, Flash #139 featuring the first appearance of Professor Zoom has a record sale of $8,300, while Batman #251, with the classic Joker cover by Neal Adams, has sold for $5,000. If you get your hands on these types of editions it’s a good idea to keep them sealed and put away somewhere cool and dry so they remain in good condition.
4) Gold and silver
The concept of investing your cash in gold and silver might seem a little strange at first, but it’s quite satisfying to have a physical investment actually in your home. (You can read a beginner’s guide to investing in gold here.)
However you should be prepared to pay out for insurance on such items. Vintage jewellery and home décor are the easiest investments as long as long as you know your antiques. (You can read 10 tips for investing in antiques here.)
If you have enough money to spare, then investing in a small business and helping them to get on their feet or grow could be a way of seeing a decent return. It could even take you full circle, and enable you to repay the trust an investor showed in your business in the beginning by giving another promising enterprise a head start.
To really believe in such an investment you should feel strongly about the business’s aim or product. Small business investments can be risky in the current economic climate, but with so many people starting up their own companies you should have plenty to choose from.
Consider your options
If you’re lucky enough to have surplus cash, there are a dizzying amount of investment opportunities – our five are just a tiny selection. If you’re interested in any of our five, we’ve included links with tips and further information to help you learn more. Happy investing!