Investing in something is all about receiving a good return on investment (ROI) when it comes to wanting our money back and more. This applies to whether we invest in real estate, shares, or items that when resold will at least hold their money if not make us a profit.
Real estate investors will earn an income through rental income where the property that is part of their portfolio is rented out to another. The benefits of this type of investment include passive income, tax advantages, a stable cash flow, and diversification.
The income is received with little work required to generate it once the real estate has been obtained. You will, however, as a landlord, be responsible for maintaining the property to a required standard. Although, companies can take care of this for you and you can hire people to do the repairs. This can all be claimed back against your taxable income because they represent expenses that you have incurred. Property rents received do provide a more stable income than many other forms of investment, such as savings accounts and investment plans with banks and building societies, or in shares, where the interest or dividends are variable.
With real estate, at all times you still own the property, which will generally only appreciate in terms of its value. That has been the trend over the years with real estate. Those with more diverse investment portfolios will invest in all kinds of things and extend their portfolio beyond investment in just bonds and shares and move to real estate. It all depends on how much you have to invest and how much money you can afford to tie up.
Shares offer a good return when you invest in the right companies but are a riskier form of investment than real estate. This is due to the fluctuations in share prices and their markets which can be due to many economic factors outside anyone’s control. Economists will predict what might happen but nobody can know for certain.
Investing in global share markets and not just ones at home can spread the risk in terms of currency rates fluctuations, and mitigate losses where unexpected events occur that are confined to specific countries.
Some tips for investing in shares are to think long-term and be able to hold on until the right share price is reached. If you need to sell in a hurry, then the chances are you are going to lose and not gain from the investment. Study the newspapers to get a grip on how share prices are changing. Take note of stories about the various companies to see if there is anything in those that will ultimately impact on share price, such as proposed takeover bids.
Items Bought for Resale
When buying items for investment purposes it is important that you like the item in case it does not give you a return.
With antiques, it is said that always buying quality will make for a wise purchase. If you buy a renowned make then it is more likely to hold its value or appreciate.
Gold remains one of the best investments you can make when putting your money in items that you intend to resell. Gold sovereigns are popular among collectors. They are no longer minted as currency but for collectors only. Most of the gold sovereigns from the Victorian period have been melted down for their worth in gold. With gold being a soft metal, gold sovereigns when they were currency, would end up lighter as time went on and so then not worth as much in terms of their gold. Between 1842 and 1845, the Bank of England withdrew around £14 million of them and had them melted down to mint new ones. Collectors today, with gold sovereigns not existing as currency, will keep them in plastic cases in pristine condition and so they will remain worth their weight in gold. Antique dealers will be looking for a specific weight to check they are not fake. For a full sovereign, this is 7.9 grams. Because it is made from 22-carat gold, this equates to 7.32 grams of actual gold content.
Reclamation yards are making good money. Because people with period houses want to make improvements in keeping with the age of their properties, anything old that has been salvaged makes a good investment to have at your property. It will easily retain the price paid, if not one day increase in value when you come to sell. This is because period items are only becoming scarcer.
In summary, whether we invest in real estate, shares, or antique items made from gold, we would hope to see a return on our investment. There is certainly evidence that investors are diversifying because the interest they are receiving from banks and savings accounts is extremely low at the moment. It would seem a good time to invest in other things and so in real terms retain our money and even hope to improve on what we originally paid.