The Best Way to Invest a Lump Sum
Nurturing your nest-egg
Sometimes we unexpectedly (or expectedly) come across money, be it through an inheritance or otherwise. Many who come into large sums of money believe that the best thing to do is to keep it tied up in their bank account, leaving it to earn a pitifully low interest in the process. Some of you may want to spend the money. Nothing wrong with that. Put that money towards a brand-new car, splash out on the latest high-end coffee making contraption, fuel the nightmarish desires that come hand in hand with a midlife crisis. We all like to indulge every now and then. If you’re one of many who are increasingly keen to look to the future, however, nursing your newly acquired nest-egg your money quickly takes precedence. But, how do I capitalise on my money you ask? How can I make the most of what I’ve already got? The answer for many is simple-invest. As ever, one answer opens up even more questions- what is the best way to invest a lump sum?
Finding the best way to invest your lump sum
When considering your long-term monetary goals, investing your money is an effective way of growing your capital. With the sorry state of the current pension scheme and the paltry interest rates offered by the banks, investing really is a very viable means of making your funds grow. Looks like that Audi will just have to wait.
If you have a large amount of money, investing your capital can be a sensible way of generating a cash flow; effectively increasing your returns so that you have more money than what you started with. Rather than keeping your money in a bank, investing opens the opportunity to generate more capital in a shorter time-frame. That being said, investing always comes with varying degrees of risk. What types of risk? The money you invest is never a definite return. Sometimes investments fall through, or extenuating circumstances influence an items profitability. Nothing is certain. This, however, is more typical of stocks, shares and other similar ‘liquid’ assets. Investments that focus on more ‘illiquid’ or ‘stable’ assets on the other hand, do tend to deliver more predictable results and aren’t quite as risky (though not immune by any means!).
Property- a sound strategy
Property has proven to be a solid and stable method of investment. It’s relatively cyclical, meaning that it’s easier to predict and determine whether it will dip or surge. With property, there are also a number of telling signs that will help you to spot a potential ‘good investment’. For example, you could pay mind to the number of local businesses, either already in the area or looking to move there. These companies undertake significant research and spend a lot of money on determining where they should take their next branch. Most tend to choose areas that are demonstrating increasing affluence. Whilst not guaranteed, property is, for the most part, easier to gauge.
Here at The House Crowd, if you wanted to invest your money into property, you can do it in numerous ways.
For those of you looking for the best way invest a lump sum of money into property, we offer a ‘hands-free solution that is well suited to those looking to make the most of their capital. Our IF ISA allows you to invest up to £20,000 a year completely tax-free whilst we do the leg-work for you. Sit back and watch your money grow. Your money is spread across both peer to peer loans and development loans. As a result, you can expect your capital can be diversified as far as practicably possible. Not only this, but by having your capital invested in development loans, you are helping to relieve the UK’s housing crisis by building much-needed high-quality homes. Once more, all the investments that are made are secured against UK properties, giving you that extra piece of mind whilst we automatically diversify your capital across a diverse portfolio. You could say that it’s ‘safe as houses’.
Look to the future
If you are fortunate enough to come across some money, investing your capital does present itself as a completely worthwhile tactic. Whilst finding the best way to invest a lump sum is completely subjective, property investment is always a relatively sensible option to consider. So put that speedboat on hold, and explore your options, the possibilities are endless.
With all of our investments comes an element of risk. To read more about our risk warning, click here.