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Oct 03

Shares vs property: What should I invest my money in?

Reading Time: 6 mins

Are you looking for the best way to invest money? This could be for retirement purposes or as a way to maximise your current income. Whatever the reason, there are several investment options you could consider. Shares and property are the two most common options which many investors have found to be lucrative and prosperous – but what’s the best route to take? If you’re asking yourself “what should I invest in?”, take a look at this guide which will help you choose the investment that’s right for you.



Investing in shares

A share is a unit of ownership of a company or a financial asset. Those who invest in stocks can own a tiny percentage or substantial fraction of their chosen venture. If you own a share directly, you become known as a shareholder, who will sometimes have the authority to contribute to company decisions. If you invest through a fund, on the other hand, this is a collective investment that consists of a selection of shares from different people. The latter is a more hands-off investment, as a fund manager will take control of individual ventures.

Stocks and shares are one of the top 10 investments out there, but like any investment, shares have their positives and negatives and are ideal for some but not others. Here are some of the most prominent pros and cons associated with shares, which will help you decide if this is the right investment for you.





Liquid assets

An advantage of investing in shares is that due to the fact that they are a liquid asset, they can be sold easily to generate quick profits. Some stocks can be sold in a matter of seconds while still holding their market value. This offers you additional cash flow to invest in different shares which may be more profitable to maximise your savings.


Profit increases

One of the main questions future investors ask is how can I invest my money to make it grow? By investing in shares, you can maximise profits quickly due to the volatility that comes with this type of investment, as shareholders tend to see growth of up to 50 per cent in just one year. This volatility is both a positive and negative attribute, as it offers you growth benefits. However, you must choose your shares carefully, making sure they are high-quality to benefit you financially.


Hands-off investment

Shares are known to be one of the most effective ways to earn passive income, as they enable you to secure a percentage of the profits from a company or an asset without having to do much work. This is especially effective if you invest in a company that pays dividends, as then you can benefit from the share growth and dividend increase.



Volatile investment

As mentioned above, shares are known to be volatile, especially if the company or asset you have invested in is struggling financially, which in turn will cause your share to dwindle. Some investors make the mistake of choosing volatile shares as they are blinded by emotional attachments, which can be detrimental to investment profits. If a share is highly volatile, it means that the price range of the unit is wide-ranging, usually resulting in increased risk and loss for shareholders.


Price fluctuations

If you plan to invest in stocks as a short term investment solution, then you need to be aware of extreme fluctuations. As shares are continually being sold and purchased, price negotiations are in a constant flow of change. This is because the market does not take into consideration a long-term overview of a company or asset, which means you may be buying into something that is not financially beneficial to you.


Threat of bankruptcy

By investing in shares, you can leave your finances vulnerable, especially if the company you have invested in is going into administration. While there have been instances where payouts have been made, shareholders are usually the last to be paid out once a business becomes insolvent. This means you will lose the cash you put in, as well any potential profits you were owed.


Investing in property

Real estate is at the top of nearly every top 10 investments list, as it is one of the best long-term investment strategies. There are different types of property investment including residential, commercial and industrial real estate, although the former is the most popular, with buy-to-let property being the favourite. This involves purchasing a property to let it out to tenants.

Whether you decide on renting a room to students or purchasing multiple apartment blocks, there are various advantages and disadvantages associated with investing in property, which we’ve detailed below.



High returns

Many investors believe real estate is the best way to invest money, as it offers both short and long-term returns in the form of rental income as well as the potential for capital growth. To ensure your investment is successful, you need to ask what should I invest in for the best returns and capital growth potential, which may lie in the location and property type itself. According to a guide compiled by RW Invest, buy-to-let is one of the most lucrative types of property investment, especially if you invest in a regeneration area that has the potential to grow and evolve which will result in a boost in property value and tenant demand.


Tangible asset

Many investors prefer to put their money into tangible assets such as property, as this can be purchased in a physical form and has a value that can be controlled. For example, you may have bought a property for a specific price, but you can boost the cost by making changes to give it more of an attractive quality, which allows buy-to-let investors to up the purchase price, resulting in increased rent.


Tax deductibles

One of the many financial benefits associated with property investment is that investors can claim back certain outgoings. This includes costs such as mortgage interest and depreciation, as well as any management expenses that are paid to keep the property running. This enables you to maximise your savings which could be used to help buy your next investment property and build a portfolio.



Hard work

Those looking for a secure investment find that a property is more hard work than its worth, as it requires you to take on landlord duties including property marketing, tenant screening, managing tenants, maintenance and more. This can be a lot to take on, especially if you have many investments to worry about, but there are ways around this. Many experienced investors choose a hands-off property investment, as they can hire a property management company to take care of all aspects involved with managing an investment, allowing the investor to sit back and enjoy the financial benefits.


Lack of diversification

Some argue that property investment is not diverse in comparison to stocks and shares, as the majority of real estate professionals tend to invest in similar properties, and therefore do not have much to work with should there be a decline in the market. However, there is still potential for diversification in the property market, as experts are now pushing for investors to diversify their portfolios as much as possible by weighing up the best real estate opportunities in different communities.


liquid asset

A small downside to investing in property is that unlike shares, real estate usually cannot be sold straight away. This means you will have to keep hold of it before you start to unleash its profit potential. While this may not provide you with substantial returns straight away, it may be a worthwhile investment in the long run.


What should I invest in?

Deciding on the right investment can be a difficult task. However, by comparing two of the top 10 investments, you can gain get a better insight into how each one works.

It is clear from the comparison that the volatility of shares is its downfall, which ties in with the emotional attachments that investors tend to form, with some even facing bankruptcy due to their lack of judgement. While some have found success with this type of investment, it is clear that the answer to what should I invest my money in is in favour of a long-term investment like property, as this outbids the short-term benefits associated with shares.

To invest in real estate successfully, you must conduct thorough research on the property market to find the right rental property and follow all the necessary steps to reap the financial benefits. This includes looking at areas with the highest rental yields, which are also popular with tenants. You may even consider renting a room to students by investing in a student property, which is one of the most popular types of investment due to the year on year increase of the UK’s student population.

It is also essential that you think about the downsides, such as diversification, which you must consider when the time comes to expand your property portfolio. Therefore, you could consider investing in a different area that is equally as lucrative but caters to a different demographic. This will help you protect your investments, should any of your others dwindle, allowing you to maintain high returns and maximise your savings.


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