When you have more money coming in than going out or even a lump sum,
you may be wondering,how to make the most of it.
1. Saving and investment are very different
Since the recent oil crash, the China v US Trade wars, Corona Virus and the oncoming recession,its natural for careful savers to want a safe place for their money where they can get at it easily or just turn to tap on for monthly income.
Clever Investors will always want their money to grow by at least inflation plus and accept that it may be tied up for some time typically 3-5 years but with always access if required.
2.Each investment has it own level of risk
Just as in life, there are usually no guarantees that you will make money or even get your money back but getting the timing right on your investments is always profitable.
3. The greater the Risk, the greater the potential for reward or Loss
They are many risks with investing your hard earned cash!
The threat of rising prices greatly reducing the buying power of your money which is even more critical , in today's increasing prices which seem to be much higher than expected.
Specific risk If you invest in individual companies or shares, there’s always a chance that unforeseen events will scupper your portfolio and create big losses or gains but its risky!
You’ll face this risk if your money is invested in stock markets outside the UK as well as political risk with the uncertainty of Brexit which just around the corner and the damaging effects may last for years.
Some fund managers may consistently beat their benchmarks, but most don't ...so there’s a huge variation in the investment performance of individual fund managers.
So why take the risk always use a good experienced IFA with high client reviews and low adviser fees like First Option for example.
4. The greater the ease of access, normally the lower the Reward
Most effective investments need to be able to run for at least 5years or more but you can have access to your money if you need to. But the longer you can invest, the more potential to have greater returns in the long run.
5.Always, Always do your research first
If you are considering investing with a Insurance or Investment company yourself then carefully research their strength, costs and ongoing charges & client reviews to establish their reputation and importantly their investment fund performances.
If you give your money to someone to invest or manage you need to be certain there is no danger of mismanagement, poor investment performance or even fraud.
6. Never risk a sum of money you can't afford to lose
Always speak to an IFA before parting with your hard earned cash! (See our article on how to choose an IFA)