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Friday 31 July 2015
Friday 31 July 2015
Friday 31 July 2015
Friday 31 July 2015
With interest rates offering little to get savers excited, now may be a good time to explore other options.
If you’re a first-time investor, it’s natural to feel nervous about taking the plunge. The good news is there are a range of low-risk investments to help you take those first steps into the world of investing.
You’ll Still Need Some Cash (So Make It Work as Hard as It Can)
Having cash to hand provides a buffer against life’s ups and downs. How much cash you need depends on your personal situation. Many people aim to keep a couple of months’ salary as an emergency fund.
That said, it’s always a good idea to make your cash savings work as hard as possible.
From this autumn, ISAs (Individual Savings Accounts) will become more flexible. You will be allowed to withdraw and replace money as you wish, as long as your net contributions remain within the annual ISA limit.
This essentially allows you to use part, or all, of your ISA allowance as a standard savings account. The key benefit is that you can receive interest on your savings without paying tax.
Look at Government-Backed Schemes
From time to time, governments introduce schemes to encourage saving and investing.
Currently, first-time buyers saving for a house deposit may benefit from the Help to Buy ISA, due to launch this autumn. In simple terms, for every £200 you save, the government will contribute £50, up to a maximum of £3,000.
The government also recently introduced a popular Pensioner Bonds scheme for over-65s. While this scheme is currently closed, its overwhelming success makes it possible that a similar initiative will be reintroduced in the future.
It’s always worth keeping an eye on government-backed schemes as they often provide unique incentives for savers and investors.
Make Your Investments Match Your Needs
There is a vast range of investment products available. Instead of labelling them as “good” or “bad,” focus on whether they are appropriate or inappropriate for your situation.
Start With Your Current Situation
Before you begin investing, it’s important to take stock of your finances. If you have high-interest debts, for example, you may be better off using any spare cash to reduce them before considering investments.
Plan for Your Goals and Risk Tolerance
Once you’re ready to invest, think carefully about your short-, medium-, and long-term goals. You’ll also need to consider your attitude to risk.
You’ve likely heard the phrase, “the value of investments can go down as well as up”. This is true, and different investments carry different levels of risk. Some people are comfortable with higher risk for the potential of higher returns, while others prefer a safer, steadier approach.
A balanced strategy might involve dividing your investment funds between products with varying degrees of risk.
Diversification and Dividends – The Two Pillars of Investment
You’ve probably heard the phrase, “don’t put all your eggs in one basket”. This applies to investing too.
Putting all your money into high-risk investments increases the chance of significant loss. On the other hand, focusing only on low-risk investments might mean missing out on potential high returns.
The Importance of Diversification
By spreading your money across a mixture of investments with varying risk levels, you can balance safety with the opportunity for growth.
The Role of Dividends
Investments can focus on growth, income, or a combination of both. Many publicly listed companies pay dividends to their shareholders. Dividends can either be reinvested to generate more growth or taken as income, depending on your goals.
Final Thoughts
By understanding your financial situation, planning for your needs, and balancing risk through diversification, you can begin building an investment strategy that works for you.
THE VALUE OF INVESTMENTS AND THE INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.
With interest rates offering little to get savers excited, now may be a good time to explore other options.
If you’re a first-time investor, it’s natural to feel nervous about taking the plunge. The good news is there are a range of low-risk investments to help you take those first steps into the world of investing.
You’ll Still Need Some Cash (So Make It Work as Hard as It Can)
Having cash to hand provides a buffer against life’s ups and downs. How much cash you need depends on your personal situation. Many people aim to keep a couple of months’ salary as an emergency fund.
That said, it’s always a good idea to make your cash savings work as hard as possible.
From this autumn, ISAs (Individual Savings Accounts) will become more flexible. You will be allowed to withdraw and replace money as you wish, as long as your net contributions remain within the annual ISA limit.
This essentially allows you to use part, or all, of your ISA allowance as a standard savings account. The key benefit is that you can receive interest on your savings without paying tax.
Look at Government-Backed Schemes
From time to time, governments introduce schemes to encourage saving and investing.
Currently, first-time buyers saving for a house deposit may benefit from the Help to Buy ISA, due to launch this autumn. In simple terms, for every £200 you save, the government will contribute £50, up to a maximum of £3,000.
The government also recently introduced a popular Pensioner Bonds scheme for over-65s. While this scheme is currently closed, its overwhelming success makes it possible that a similar initiative will be reintroduced in the future.
It’s always worth keeping an eye on government-backed schemes as they often provide unique incentives for savers and investors.
Make Your Investments Match Your Needs
There is a vast range of investment products available. Instead of labelling them as “good” or “bad,” focus on whether they are appropriate or inappropriate for your situation.
Start With Your Current Situation
Before you begin investing, it’s important to take stock of your finances. If you have high-interest debts, for example, you may be better off using any spare cash to reduce them before considering investments.
Plan for Your Goals and Risk Tolerance
Once you’re ready to invest, think carefully about your short-, medium-, and long-term goals. You’ll also need to consider your attitude to risk.
You’ve likely heard the phrase, “the value of investments can go down as well as up”. This is true, and different investments carry different levels of risk. Some people are comfortable with higher risk for the potential of higher returns, while others prefer a safer, steadier approach.
A balanced strategy might involve dividing your investment funds between products with varying degrees of risk.
Diversification and Dividends – The Two Pillars of Investment
You’ve probably heard the phrase, “don’t put all your eggs in one basket”. This applies to investing too.
Putting all your money into high-risk investments increases the chance of significant loss. On the other hand, focusing only on low-risk investments might mean missing out on potential high returns.
The Importance of Diversification
By spreading your money across a mixture of investments with varying risk levels, you can balance safety with the opportunity for growth.
The Role of Dividends
Investments can focus on growth, income, or a combination of both. Many publicly listed companies pay dividends to their shareholders. Dividends can either be reinvested to generate more growth or taken as income, depending on your goals.
Final Thoughts
By understanding your financial situation, planning for your needs, and balancing risk through diversification, you can begin building an investment strategy that works for you.
THE VALUE OF INVESTMENTS AND THE INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.
