Saving for the future means safeguarding your assets, planning for your retirement and increasing your capital. While putting money aside every month can be a viable savings plan, you won’t earn much interest on a standard savings account. With the right investments, however, you can increase your capital, generate a substantial amount of interest and look forward to a secure future.
Of course, investments can fall as well as rise, so you’ll need to consider what level of risk you’re comfortable with. While high-risk investments offer high rewards, you could lose a substantial amount if things go wrong. By opting for low or medium-risk investments, however, you can make more modest gains but minimize the danger of losing your capital.
Many people assume that investing is only for people with a substantial amount of capital at the outset. In reality, anyone can choose to invest their money for the future. With endless opportunities available, there are a variety of investments to match all budgets. If you want to prepare for the future, take a look at these smart ways to save…
Buy stocks and shares
Trading on the stock markets allows you to invest in businesses without taking on any managerial responsibility. Although you’ll need to pay a broker when you want to buy or sell, there are relatively low-cost ways of doing this. This means the bulk of your capital can be invested, rather than being spent on unnecessarily high fees and charges.
If you do choose to buy stocks or shares in a company, you’ll need to think carefully about what businesses or industries are predicting to do well in the future. Similarly, you’ll need to consider how long you want to invest your capital for. Although you can sell stocks and shares at any time, you could lose money if you need to access your funds when prices are low.
The stock market can be a risky investment, but it can also offer high rewards. With plenty of information, guides and expert instruction online, you can even become a trader yourself and manage your own share portfolio.
Invest in real estate
If you have the capital to finance a property purchase, it can be a great investment for your future. As well as increasing in value over time, your property could generate rental income, which means you’ll receive short and long-term gains. Although property prices can fall, buying at the right time can make the investment lower risk. As property prices do tend to bounce back over time, many people consider this a relatively low-risk way to invest, providing you won’t need to realize your capital quickly.
When investing in property, it’s important to specify your goals. If you’re investing in order to finance your retirement, you may want to use a real estate IRA guide to help you plan a suitable strategy, for example. Alternatively, if you want to maximize your short-term income, becoming an expert in the rental market might be your best bet.
Purchase cryptocurrency
Cryptocurrency has been a popular alternative investment for some years now and many people have made a high return from this form of investment. However, you will need to spend some time learning more about it if you’re unfamiliar with the concept or the mechanics of it.
The value of cryptocurrencies, such as Bitcoin or Litecoin, fluctuates all the time so investors need to buy when it’s low and sell when it’s high to make a return. Of course, you’ll need to consider what trading platform you want to use to ensure security and low fees.
It’s worth noting that many jurisdictions are introducing new regulations regarding cryptocurrencies. With varying tax implications, it’s worth investigating how cryptocurrency investments are classified in your area before you decide to invest.
Try spread betting
If you want to invest in the stock market but you don’t want to buy or sell shares, spread betting might be a viable alternative. Instead of acting owning stocks or shares, you simply bet on whether their value will rise or fall. In addition to betting on individual share prices, you can bet on the performance of certain sectors or on the performance of the market as a whole.
Although spread betting seems deceptively simple, it’s advisable to be cautious. You typically bet on how far a price moves in points, so you might bet $100 per 0.1, for example. If you bet the price will rise, you’ll get a better return the higher the price rises. However, if the price falls, you’ll lose the same amount. As stock markets can rise and fall rapidly, you can potentially lose money quickly. By learning how to implement safeguards, such as stop losses, you can reduce this risk and potentially make high returns.
Peer-to-Peer Lending
Peer-to-Peer, or P2P, lending is a relatively new form of investing but it’s one that’s growing in popularity. P2P lending platforms allow people to obtain loans from a variety of individuals. If someone wants to borrow $1,000, for example, they might borrow $100 from ten lenders. You can sign up as a lender as choose to lend as much as you like. With specified interest rates, you stand to get back more than you lend, which means you can increase your capital.
P2P lending platforms have various mechanisms to reduce the risk associated with lending, so you can opt for lower interest rates with reduced risks or higher interest rates with higher risks. Depending on the level of risk you’re comfortable taking, you can make a significant amount by leveraging your capital in this way.
Furthermore, P2P lending provides a good option if you only want to invest in the short-term. Different loan terms mean you can match with a borrower who only requires short-term financing, which will enable you to get your capital back plus interest relatively quickly.
Trade in FOREX
The FOREX market is used to trade currencies and works in a similar way to stock markets. As a global marketplace, you can trade on the foreign exchange market at virtually any time, so it’s ideal for people who want to take an active role in managing their investments.
Currencies trade against each other in pairs on the FX market, so you can trade speculatively and base your decisions on economic, environmental and/or political factors. If you choose to manage your FX investments yourself, you’ll need an in-depth knowledge of current affairs, geopolitical issues and global news. However, there are plenty of communities online designed to help novice traders learn more about trading successfully on the FX market.
Become a seed investor
If you’ve got a head for business, being a seed investor might be the perfect way for you to invest your money. Startups are always looking for financial backing, which is exactly where seed investors come in. Typically, you invest in the company in return for a shareholding or equity stake. Providing the company is successful and continues to grow, you can make a significant return.
Some startups look for more than just financial backing from their seed investors. If you have professional experience in a particular industry or verifiable success in a specific sector, you may be sought out for your credentials too. Depending on your contractual agreement, your role may include giving advice, acting as a mentor or taking a role in the decision-making process that impacts the future of the company.
If you do choose to become a seed investor, be sure to examine all contracts carefully and do your due diligence. A great business idea will only be successful if the company has the right people at the helm and your agreement won’t automatically give you a right to make decisions that affect the running of the company. With the right mix of people, skills and talent, however, seed investments can be a great way to increase your capital and have fun in the process.
Investing in the Future
No matter what type of investment you choose to make, it’s important to understand the potential pitfalls you could run into. By researching the various options in detail, you can determine exactly what type of investment matches your interests and the level of risk you want to take.
In addition to this, you’ll need to decide whether you want to take an active role in making investment decisions or whether you’re happy to leave it up to a professional. If you want to invest in the stock market without buying or selling shares yourself, for example, you can invest in an established fund and allow the fund manager to determine how your funds are invested.
Alternatively, you may prefer to manage investments on a day-to-day basis yourself. If so, you’ll need to ensure you have the time and expertise to monitor the markets, predict them accurately and adjust your investments accordingly.
With the right amount of research and a moderate amount of capital, investing can be an excellent way to increase your capital and even generate revenue in the process. If you want to save for your future, finding the right investment opportunity could put you on the fast-track to success.