As of 2015, the average annual salary for full time employees in the UK is £27,600 according to the Income Tax Calculator – a figure that is reduced by utility bills and harsh economic conditions. Though there are various ways to save enough and retire early, making the right investments is considered an easier way to speed up the process and live a comfortable life. When investing for the first time, it is easy to make poor choices that can set you back financially. Here are three things to consider when making your first investment.
Invest a Percentage in Gold
Since time immemorial, as far back as 550 BC, gold has been an integral part of the international trade system. In the Gold Standard and Bretton Woods systems, currencies in printed money were backed by gold as it is tangible and easy to liquidate. If you’re wondering how much is gold worth, well, it depends on a nation’s currency, which means it fluctuates from time to time. Investing in gold insures you against bankruptcy as its value is purely determined by demand and supply. Nonetheless, this also means that its value may depreciate and make losses. As such, always invest less than 20% of your wealth in precious metals.
Purchase Property or Shares in Real Estate
Property is one of the safest investments in the world. The housing industry, though affected deeply by world events such as the impending economic conflict among the major nations of the world and the effects of Brexit, always bounces back and consistently rises. Insuring your property against perils and collecting claims reverts you back to your former wealth standard in case of a misfortune. Investing in real estate, through buying, remodeling and selling them at higher prices, or simply buying a home for your retirement is a worthy investment. Shares in such an industry is also an entry point for a beginner aspiring to buy stocks and bonds.
Remember That High Rewards Mean Higher Risks
Looking for investment opportunities requires due diligence. Keep in mind that the higher the reward, the higher the risks. Cryptocurrencies such as Bitcoin, for instance, have become quite popular, but can be volatile and should be traded carefully. Carrying out detailed research or contacting a financial advisor is an effective way to avoid making major mistakes, such as falling for investment scams.
Investing is a project that more millennials are buying into, with its allure of early retirement or getting rich. Whatever your reason for that first investment, research is paramount, as the goal is to increase your wealth by avoiding losses. The safest choice is purchasing properties or short-term volatile investments, while gold is insurance against economic turmoils. Ultimately, your money is your own and other parties such as real estate agents and financial advisors should be selected with utmost care.