Investing Options for the Budding UK Investor

Tired of living paycheck to paycheck? Don’t worry; you are definitely not alone at all. In fact, a lot of people suit at home every day, wondering how they are ever going to be able to step out of the paycheck to paycheck lifestyle. Even though there are no overnight solutions to this common and classic problem, there are things that you can do to begin bringing in additional monies without having to add in more hours. It’s the ultimate dream for many people, and there’s nothing wrong with making sure that you focus on that dream. Making things happen doesn’t require any type of sorcery, but it does take planning.

If you’re going to go the route of having multiple income sources, you need to learn your options as a budding UK investor. There are actually many more UK investing options than you think. It’s just a matter of making sure that you know exactly what you are going for at all times.

Keep in mind that UK investing is all about understanding risk. If you’re the type of person that really doesn’t like taking any type of risk, investing of any kind isn’t going to be a good idea for you. The reason why is because there is always risk somewhere, so you can’t really avoid it. The only risk-free option would be a basic savings account, but the returns aren’t very good.

If you want stronger returns, you’ll have to get your hands dirty, so to speak. Risk isn’t that bad once you understand your options and you can weigh them against the unique points of your own financial blueprint.

The first investment option would have to be ISAs — Individual Savings Accounts. There are actually two types: cash ISAs and stocks and shares ISAs. You can actually invest in both types, but only up to a certain amount. The amount changes every year, and you should make sure that you look up the limit before you throw your money in this direction. Even though it won’t make up your entire investment portfolio, there’s nothing wrong with using this vehicle to save on your yearly tax obligation. The savings can really add up! At the time of this writing, you can invest up to 7200 GBP a year — wow!

The next option would be investment trusts. These are companies that buy and sell shares in other companies. You basically become a shareholder of the investment trust, which will invest on tour behalf, in a manner of speaking. You make money based on the value of your shares, which will rise and fall in accordance to market demand and corresponding supply for the shares.

If those two options aren’t to your liking, you can always go with a unit trust. If you’re worried about risk, this is a great option. This investment path actually lowers your risk by pooling your investment capital with plenty of other investors. They also spread the risk out even further by diversification methods. Not putting all of your eggs in one basket is always a good idea.

There’s also OEICs, which stand for open ended investment companies. This means that shares in the fund are created as investments invest and removed once they cash in. It’s just another investment vehicle that you can use or not use based on your own goals.

There are also investment bonds, which are actually a form of insurance. It’s a whole of life policy that’s typically paid for with a lump sum — or a single premium. The proceeds can be taxable, but they might be.

Like anything else in life, you will definitely want to make sure that you’re consulting with a qualified financial advisor before you make any hasty decisions. You should also avoid investing with monies that you cannot bear to lose. The possibility of loss is always there, but you don’t have to feel like it’s impossible to move forward — just make yourself aware of the consequences of everything you do! Good luck out there and play it safe with money you can’t afford to lose. The rest of it can always be used to improve your life over time. Don’t worry about the short term — focus on winning the marathon of life instead!

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