Monthly Archives: February 2012

Investment Options

As most people will know, the Bank of England base rate – a figure that was barely discussed before the recession – remains at its historic low and looks set to stay there for at least the next twelve months. Whilst this is good news for homeowners, it’s less good for people looking to save and get a good return on their money.

In response to this, banks like Santander have been looking to increase their range of savings and investments on offer, but how do you pick the right one?

Before looking at products, however, it’s worth considering that due to low interest rates, cheap mortgages, and recent drops in house prices, perhaps the best investment out there can be found in the form of property. If you have the means to get approved for a second mortgage, and are willing to put a little work into development, a second home represents your best option for making a good and steady profit.

If property is a little bit out of your reach, you have several options. The first is a tax-free ISA, these come in two forms: cash, and stocks and shares. Cash ISAs generally offer lower rates, but are extremely cost efficient if you’re a higher rate taxpayer because you don’t have to pay income tax on the interest you earn.

Nonetheless, one of the problems with ISAs at the moment is that the inflation rate is quite high. So even the best paying cash ISAs struggle to beat inflation – unless your investments offer a better return than inflation, your money is actually decreasing in real value regardless of the interest rate. This problem at least looks set to be corrected in the medium term with most experts predicting that inflation will tumble.

The other alternative to cash ISAs are stocks and shares ISAs. There are a huge range of these products around and they can offer great returns. However, all stocks and shares ISAs carry a certain amount of risk with them, and it’s down to the customer to decide what sort of risk they’re willing to take on in the hunt for a profit. You can also pick to invest in certain types of stocks, or certain types of companies, in fact, you can invest in stock in just about any format and protect it within the ‘wrapper’ of a stocks and shares ISA, all of which means you don’t pay for the interest that you earn.

Another option that’s attracted a lot of interest in recent months are bonds. Bonds are the company version of gilts, which is the financial world’s term for government debt. Investing in debt is always risky, but the bonds of the best companies represent a fairly safe bet, and a decent return.

Of course, the problem here is that the best companies to invest in – the safest ones – are the ones that offer the lowest rates of return.

Ultimately, if you’re thinking about investing, the best thing to do is to consult an independent financial advisor, and to see what sort of products are available at your local bank. Usually it all comes to a decision between like return and the risk involved in your investment, and only you can make the final decision – but it’s best to only make that decision after thinking about all the options.

Save on financial products

If you are an individual or the head of a household and you are looking for ways to save money on your monthly budgets, you have many more options than you may think at first. Contrary to popular belief, absolutely everything that you pay for within a monthly budget is up for negotiation, not just clothes and food. For instance, you can very easily get a lower payment by using price comparison web sites to make everything from a life assurance comparison all the way to auto insurance and finding a new lawn company or covering your water and cable bills.

The solution that you are looking for was not always available, and many people have a great deal of trouble reconciling this fact with themselves. But the fact today remains that the price comparison web sites of today remain a great resource for comparing different programs from competing companies in a straightforward fashion. This will allow you to compare apples to apples, rather than the apples to oranges that the individual salesmen of each individual company loves to do in order to make themselves look good.

Life assurance comparison is just one of the many places that you can save money on the every day expenses that are clogging up your monthly budget. There are many others, such as auto insurance payments, disability and unemployment insurance if you are self employed, as well as the known essentials such as groceries and clothes.

You also want to make sure to have a membership at your local warehouse stores so that you can minimize the cost of essentials such as bread, sugar, flour, undergarments, cereal, fruit, and other essentials as much as possible. These items are usually much less expensive when they are purchased in bulk.

As you continue to save the money on your essentials, you will have a great deal more money to put toward your financial products, which will allow you to save even more money. For instance, if you have a little money left over after paying off all of your immediate bills and taxes, and after you have maximized your investments in your long term retirement financial vehicles, you can save a great deal of money on medical premiums by placing some of your money in a health savings account.

One of the benefits of a health savings account is that it places you one step closer to becoming self insured, which, if reaches, completely eliminates the line item from the monthly budget. Most people will never achieve this ideal, but the more money that goes into a health savings account means less money that comes out of your pocket for the monthly premium. With many health savings accounts, the unused portion of your funds will also have the opportunity to actually make you money due to the interest that it accumulates.

It is also essential that you bookmark the price comparison web sites that give you the best information as you should come back to re-check your prices every six months.