If you are fortunate enough to have savings or an inheritance sitting in your account, you may have thought about how you can invest that money and make it work for you.
Once you retire, especially, your relationship with money will change. We all go through it and after you stop drawing a monthly paycheck, money becomes more of a focus.
You use your cash to cover your day to day costs of living, but for the rest of it, you need a plan to put that money somewhere you can earn from it.
There are several goals that you want to achieve when you invest your money.
You should aim to have the money you need to spend there for you when you need it, you also need to deal with the fact that you may lose some cash from time to time.
The market does go up and down and you have to know that will be the case sometimes. Lastly, you need to be able to deliver enough growth to cover the costs over time, and you need to fight inflation when you do that!
You may never have thought to check out Pepperstone’s Forex Spreads before, but now is the time to explore more options for your investments.
The good news is that there are six clear ways to invest your cash and each of these options can help you to meet your goals. Not every investment you make will meet your needs, so sorting out the good from the bad, the ones that will work for you and the ones that won’t – those are all important.
With this in mind, let’s dive in and take a look!
Cash
The money you need to live on day to day is important.
You will find a lot of peace in having more than you need, and holding cash is a good way to know what it’s worth at all times. It’s always there to pay your costs as they happen but the downside is the potential loss of purchasing power because of inflation.
CDs
We aren’t talking about the music discs, but Certificates of Deposit. These are a good way to earn a little more interest than you usually would on your typical account.
The only real downside to this method of investment is that you have to pay a penalty if you want to take your money before maturity.
The returns may not be the most stellar out there, especially given that some CDs struggle to keep up with inflation.
Annuities
Annuities come with promises with the potential for a higher income immediately than one you could have on your own.
It’s a good way to add to your investment portfolio and you need to get some advice before you go into one on your own.
Premium Bonds
Bonds at the moment are low interest rates, and they play a huge role in your financial picture.
Failing to pay on a bond? Well, that can end in bankruptcy! You don’t want to end up that way. Yes, a bond is a risky asset, but it’s an asset nonetheless.
Real Estate
If you have the chance to invest in a property to rent out, you are going to be investing your money in a positive way.
Real estate is more than an asset that you can rent out to people, you can either use it to live in yourself one day, or you can sell it again and live on the profit that you get.
Hiring a rental management company is the smartest decision if you plan to have a tenant in the property, so make sure that you do your research about your investment before you go for it.
A rental property is a big job, so only put your money into it if you are up to the challenge and you can manage it.
Stocks
Stocks are an excellent way to invest your money and long term returns have been just shy of 10% annually.
Returns are not guaranteed, of course, and stock prices change often. You know already that stocks represent ownership stakes in a business, and as those companies grow their share values grow, too.
If you have much of your money in stocks, you can see it grow over time and while not all years will be good ones, you’ll still have a good return most of the time if you choose well. Get some advice from a broker if you want to get it right.
