Personal Finance/Wealth Management
Two Simple Ways To Grow Your Wealth
Where to invest and grow your wealth is a matter of personal choice
It is a good idea to grow your wealth, as this is working smart by making your money work for you. Once you have decided to invest, there are hundreds of ways to do it. Nevertheless, where to invest is a matter of personal choice, which will depend largely on one’s ability to take risks. (Risk averseness).
If you now decide, how are you going about it? Do-It-Yourself (DIY) or through investment managers? Investment managers are likely to pool funds into various strategies to mitigate loss. If you are embarking on DIY, you can either read up (to learn) or use robotics to help out.
Which Two Are We Taling About?
Stocks/Shares & Bonds
- These three remain inflation-beating long term gains. The ploy is to hold on even during the turbulent stock markets and crashes, and of course, the stocks must be for stable organisations. Stocks and shares are usually more volatile than bonds but produce lesser yields, for obvious reasons. For those who don’t know the difference, stocks and shares involve buying a stake in a company, whose return will depend on the performance (profitability) of the company. Bonds however are loans to the government for a fixed rate of return. In the UK, bonds are called gilts. Bonds are easily redeemable into cash should you need your cash.
Saving Certificates
- Simple saving certificates come with a guaranteed interest rate in one of those investment certificates guaranteed by the Financial Services Compensation Scheme (FSCS). This simply means, that should the company you invested in fold up, the Government will compensate you to the tune of £75,000. So it is best to limit your saving to £75,000 in any one company.
- This is very flexible, and for anyone, you can start to save as little as £25 a month. How do you choose the best company or companies? Some people do opt to use investment managers, ( at a fee), or use online Robo advisors. There are many investment management companies out there.
The Takeaways
- An investment advisor is not necessary unless you are sure it will add value to your portfolio.
- To reduce loss, a diversified portfolio is advisable to hold a more proportion of bonds than shares.
- Although Bitcoin is said to be performing well, it is still a speculation, because it is unregulated.
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About The Author
Lanu Pitan is a Nigerian ex-pat living in the United Kingdom. She is a Chartered Accountant for many years before she retired as a Group Head Finance of a Publicly quoted Insurance Company. She now manages her own small operation.
