Looking for a way to make your money grow? There are many investment options that you can look into. Here are some of the most common forms of investment briefly explained.
Savings accounts are the most secure and stable way to invest your money. Interest rates can vary from 0.05% to over 3% – it’s best to try and find a saver with a higher interest rate so that you make a bigger return. Other investment options may be able to earn you more. However, for those that want to avoid risk, a saver is the best option.
Bonds are loans given out to companies or the government. The majority of bonds are very secure and stable and you’ll make more of a return than you would by placing your money in a saver. Withdrawals may require you to pay tax in some instances, unlike many savers.
Buying stocks involves buying a slice of a company’s ownership and profits. It’s riskier than savers and bonds, but potentially more profitable. With today’s range of brokers and trading apps, it’s now easy to get involved in stocks with as little as £1. Most people trading stocks make about a 10% return per year. Investing in riskier companies could make you bigger returns, but also potentially bigger losses.
Trading forex involves buying foreign currencies and then selling them when they rise in value. When carried out successfully, forex trading can make you a return of over 10% per year, but like stock trading it has its risk. Many people use ECN brokers to help get the best price. Forex trading usually requires larger minimum investments upfront.
Crypto trading involves selling digital currencies (known as cryptocurrencies). The most famous of these is Bitcoin, but there are many others. Like trading foreign currencies, you make money by buying a cryptocurrency that then increases in value. Crypto is more volatile and therefore more risky than forex, but has the potential to generate larger returns. You can trade crypto via a crypto exchange.
If you’ve got a lot of money to invest, you could consider putting it into property. You could rent out property or you could buy property and sell it for a profit (this is called ‘property flipping’). Property investment tends to be more hands-on than other investments and it has its risks.
Commodities include things such as oil, gold and silver. Such commodities could rise in value over time, making you a profit. You get to own something physical without having to be hands-on as you would with property. That said, commodities can be a risky investment.
Many rare items can become valuable over time as they become sought after by collectors. This includes a whole host of things such as wine, antiques, toys, vinyl and old coins. Investing in collectibles can be a hobby as well as a source of investment.
Your Own Business
Starting a business is probably the most hands-on form of investment and it definitely has its risks. You may also have to invest a lot of money upfront. However, a successful business could be the most rewarding investment of all the investments listed above.