Contributed Post October 2, 2017
tree in the forest

You’ve all heard the phrases ‘money makes the world go round’ and ‘money doesn't grow on trees’ - well they are both true and not true. Most people can agree that money isn’t the most important thing in the world, but it is the thing you need and stress over so that you can afford to live. It is the thing that allows you to have any luxuries and to go travelling. And money technically does grow on trees - unless you’re from the UK where paper notes are being fazed out. But it is true that money doesn’t just appear in the place of your crab apples.

But there are ways to grow your money.

The term ‘investing’ encompasses a varied list of actions you can take, but with the same end result of making a profit - hopefully. Smart investments should reap a profit, however, parting with your money is always a risk, which is why it’s a better idea to spread your money out rather than lumping it all on one enterprise. The rewards will be smaller, but any losses will be small too.  You can invest in material things, or hop onto the stock market - however you choose to invest your money remember only to do so if you are sure and have done the research. You can't blindly throw your money at things unless you are incredibly lucky, you will lose it all.

Cash

Using a savings account or a cash ISA is technically a form of investment. The interest rates on the accounts ensure the growth of your money. The only way this process won’t be beneficial is if inflation is higher than your interest rates. The way to combat this is to choose your account wisely and keep an eye on the economy - if things seem to be moving out of your favour, then take action to stop it. You won't lose money, as it is secure in your account, but your savings won’t gain as much interest. When opening a savings account, choose one with a fixed interest rate. And make regular deposits of a set amount. The more you deposit on a regular basis, the more your interest rate works in your favour.

Bonds

A ‘bond’ is when an individual lends a company or the government an amount of money for a set amount of time. Usually, the company’s physical assets are used a collateral damage. A corporate bond is considered riskier than a government bond, so the interest rate set on a corporate bond is almost always higher than a government loan. This is how you make your profit. It is wise to take advice on giving loans from a financial advisor until you are skilled in this area - if the company goes bust then there is no guarantee that the assets will compensate your loss. Which is why government loans are less risky - they can’t go bust, but they can fail in the enterprise you have invested in.

Shares

The stock market is a confusing, but profitable thing. Done right, you can make millions. Again, you should confer with an experienced professional before you get the hang of it. Buying stock means to buy a share (or shares) of a business. The shares you own will either go up or down in value and will continue to fluctuate. The idea is to sell your shares while they are still high in value, but you can make a loss if a company fails or if you hold out for too long. There are many things that affect the stock market including other companies, sales, politics and natural disasters. If you get involved in the stock market you need to do one of two things; the first is to become immersed in the shares world and track the goings on for yourself. The second is to hire someone you trust to do it for you.

Real Estate

Buying property is a really good investment. If you are buying a house to live in, then any improvements you make over your time there will be an investment for when you eventually sell. When selling any property make sure you are selling at the right moment - the real estate market fluctuates between being better for the buyer and being better for the seller. Keep an eye on the market and time it right. You can also make a real estate investment by buying property to rent. This way you see a return on your money sooner and, over time, you can even make more money than the property is worth. This way is more of a commitment, and you are responsible for whoever leases the property from you and any damage that occurs during their tenancy.

Art

Investing in art can bring in major money. But, as with any investments in collections, it takes time, and you need to know what you are buying in the first place. You may find the next Pablo Picasso, but remember that Picasso’s work was worth nothing until after he died. Art is particular and down to personal preference, so get advice if you don’t know enough of the industry to make an educated buy. Also, you need to make sure you are buying the real thing. Don’t buy art online, and only buy in an auction if you are positive that it’s the original, not a replica. If you find something that you think is a genuine classic painting, be careful; if it isn’t signed, chances are it’s worth very little.

Wine

Wine is another thing that can take years before it becomes profitable - this is because if you are buying an old bottle of fine wine, you are likely to be paying cost price, and so will have to wait for a few more years before the price tag goes up. Collecting wine is a practised art - you need to know your region's, your vineyards, your types of wine, and your grape years. There’s no point buying the best English Red from 2012, as the grape harvest that year was below par - in all fairness, most English vineyards scraped their entire harvests that year as the grapes were so poor. Do the research with this one, become familiar with the way wine is made and how to best look after the bottles. You don’t want to buy a merlot for $500 just to sit it upright next to the window - you’ll spoil the wine and then no one will buy it.

Gold

Gold is a hot investment at the moment and has been growing since 2007. The gold market has it’s own rules and regulations, and it’s worth getting acquainted with them before trying to break into the gold market. Gold miners have failed over the years to match the demand for gold jewellery, pushing the price of gold steadily higher. Buying gold, or investing the gold shares, can yield a nice profit.

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