Selling a home is one of the biggest decisions a person will make, with financial implications that could last a lifetime. Because it’s such a momentous choice there are many other directions that one might take with their money beforehand that could reap dividends in the future. Here are eight sensible choices for the earnest investor.
Investing in yourself is a financial gamble, unless one knows the advantage it will provide next time you go for a promotion or job interview. Ask your boss to help with funding for a course and apply for a grant as an adult learner. Do your research - used LinkedIn to scan the people who are vertically above you, and find out the qualifications they obtained.
May 2016 is the predicted time for an interest hike from a base rate of 0.5%, but savers have been waiting for that action from the Bank of England for years. Even if there is a raise, analysts predict a slow raise of perhaps one per cent in the next three years. That’s a small growth, but at least it’s safe and growing.
Stocks and shares are a risky but tax-efficient way of retaining your savings, but there are ways of mitigating that risk and making some serious cash. Choosing a fund, where a manager will choose a number of investments across several markets, is often a good way for the beginner to enter the arena, although many specialists recommend investing for several years.
House prices rose again in the first quarter of 2015, taking the average property price in the UK up to around £193,000. That 0.4% doesn’t sound a lot, but the more properties you have the more money you’re making in real terms, so rather than selling, try acquiring.
Placing money in a company pension is a licence to print money now that employers will be tied by automatic enrolment (providing you earn more than £10,000 a year) up until 2018. Minimum employer contributions will rise from 1% up to 3% by that year, with 5% to be contributed by the employee.
Nothing is 100% certain, but the blue chip stock of long-term companies with a financial pedigree is at least an educated gamble. When researching and scanning the blue chip indices look for independent websites that have no link to the shares they’re promoting.
Gilts and bonds
These are a low-risk investment, certainly next to common shares, although an element of loss still potentially exists. They are essentially a loan to a company for a fixed period (the government in the case of gilts), with a fixed interest rate over a set period. Premium bonds work on the basis of placing money inside an account with the chance of winning a prize decided by a monthly prize draw.
With research, knowledge and a little luck you can pick up a real bargain that simultaneously has aesthetic appeal for your lounge or kitchen. The advice is to buy something that appeals to you so you will develop an emotional interest, rather than a purely financial decision. That way you’ll enjoy learning more about the hobby.