5 mins
June 3, 2024

Best Ways to Invest Your Money?

Investing is an incredibly important aspect of securing your financial future in today's economy. Between inflation, energy prices soaring, and the general uncertainty around what the future holds - now is the right time to consider whether your ducks are in a row when it comes to your financial wellbeing. This is even more important when you consider that 20% of Brits have no savings at all in 2022 - and at least 17% of people in the UK aged 55 and over admit to having no pension savings, either. Things are tough out there, and it’s crucial to avoid becoming part of those statistics.

One of the best ways to secure your financial future and build long-term wealth is by learning to invest. Whether you're a beginner or an experienced investor, it's important to stay informed, do your research, and seek out helpful advice when needed. With the right knowledge and strategies, you can feel confident in your ability to make smart decisions and develop the best way to invest your money for you, that will help you achieve your goals and reach new levels of success. If you’ve been wondering what the best way to get started with investing is - you’re not alone. A lot of people don’t understand how investing works, why it’s important, or where to even begin. Don’t worry - we’ve got you covered.

Investing is simply the act of putting your money into assets that have the potential to grow in value over time, so that you can then profit by selling the asset at a higher price point than you originally bought it for, or to earn revenue from a company’s profit distributions to its shareholders (which you’ll become, if you invest in certain companies). You can invest in anything from stocks and bonds to real estate and precious metals. It’s a way to make your money work for you, so that you can achieve your financial goals – whether that’s buying a home, saving for retirement, or anything else. 

While investing can be a great way to generate revenue, it's important to remember that there are risks involved. You could lose money if the investment doesn't perform as well as you hoped. However, if you're smart about it and pick good investments, investing can be a great way to make money.

With so many different investment options available, it can be difficult to know where to start or what the best way to invest your money is.

If you're looking to get started with investing, here are some tips that can help guide you on your journey:

1. Start small and stay informed.

When you're just starting out, it's best to start with smaller investments that won't put too much pressure on your budget or leave you feeling overwhelmed by the risk involved. As you gain more experience and knowledge about investing, you can gradually work your way up to bigger investments that offer greater returns.

2. Research different investment options carefully.

There are many different types of investments to choose from, such as stocks, mutual funds, real estate, and more. It's important to do your research and understand the risks and potential returns involved with each option before making a decision.

3. Seek out professional advice when needed.

If you're feeling overwhelmed or unsure about your investment strategies, don't be afraid to reach out for help from a financial advisor or other investing expert. With the right guidance and support, you can feel confident in your ability to make smart investment decisions that align with your goals and priorities.


So, what’s the best way to invest your money? Let's first take a look at what your options are. There are a number of different ways to invest your money, and each has their own set of risks and rewards. It is important to understand the differences between these before you start investing.


Here are a few ways to invest your money:


1. Investing in stocks and ETFs

2. Investing in bonds

3. Investing in property

4. Investing in gold


Each of these have different risks and rewards, and it is important to understand these before you start investing your money.


One of the most popular and commonly recommended investment strategies is investing in stocks, which typically involves buying shares in individual companies or buying into mutual funds or exchange-traded funds (ETFs).


While stock investing can be an effective way to grow your money over time, it does come with some pros and cons that should be considered before making any decisions. For example, one major benefit is that stock prices tend to rise over time, resulting in potentially higher returns on your investments as compared to other types of investments like bonds or cash. As reported by The Motley Fool, stocks have tended to return an average of about 10% per year over the last 50 years, while government bonds have averaged around 5%.


On the other hand, stock investing also carries certain risks and may not always perform as expected. For example, the stock market is prone to volatility and can be impacted by various factors such as economic conditions, political events, or global trends - as we’ve seen over the past few years with the effect of Covid, and the Russian invasion of Ukraine. Additionally, stocks also involve a level of risk related to the company you are investing in – if that company performs poorly or goes bankrupt, you could lose all of your invested money. However, this risk can be mitigated somewhat by investing in ETFs.


An ETF, or “Exchange Traded Fund”, is like a basket of stocks. You can spend £40 on one whole share of an ETF, and that £40 is automatically invested in all the companies contained within the basket. If one company goes down, you won’t lose much because the other stocks can still go up, balancing out your losses. For example the S&P 500 is made up of the 500 top US companies – even if 100 of these stocks went down, the other 400 stocks that are still rising may cancel out some or all of the losses. You may even end up making a gain.


Bonds are essentially loans that you make to a company or government entity in exchange for interest payments over a set period of time.


If you're a beginner investor, there are a few things you should know about how bond investing works. First, you'll need to decide which type of bond is right for you. There are several different types available, including government bonds, corporate bonds, and municipal bonds. Each type offers different rates of interest and risk levels, so it's important to carefully consider your options before making a decision.


Once you've selected the type of bond that best fits your investment goals, you'll need to determine how much money you want to invest. This is where things can get a bit more complicated, as there are several different factors that will influence the amount of interest you earn on your bonds. These include the length of the bond term, current market conditions, and even inflation rates.


Bonds can be a great low risk option to diversify your portfolio, as they are less volatile than stocks, but aren’t typically considered to be the best way to invest your money on their own, due to their lower level of returns compared to other options.


If you're looking to make money by investing in property, there are a few key things you need to keep in mind. Generally, there are 2 main ways you can make money by investing in property - you can either buy and rent or sell properties yourself, or you can provide funds for others to carry out buys, renovations, and sales, and earn some money from the profits.


First and foremost, it's important to do your research before making any big decisions. Deciding to buy and sell or buy and let properties yourself often requires careful planning and a high level of up front capital, as well as careful research regarding locations, property, and financing options. This can be risky due to the high up front costs needed, and is a very illiquid option (meaning, it can be tricky to get access to the cash from your investment in property if you need it quickly - you will often need to fully sell the house first which can be time consuming). That said, if you have the funds and the time to research carefully, and don’t need quick access to money, this kind of investment can end up being very profitable.


On the other hand, investing in property by providing the funds for others to buy and sell or buy and let can require a much lower initial deposit. For example, you can use peer-to-peer property lending sites, or even invest in real estate stocks and funds, allowing you to have access to some of the profits and gains, without taking on as much risk - or the costs of having to replace a leaky roof!


Looking to make money by investing your hard-earned cash in gold? Gold has long been considered a safe and reliable investment option, with many advantages over other types of investments like stocks or bonds.


For starters, gold is one of the most stable assets out there, making it a great choice for risk-averse investors. This stability is due in large part to the fact that gold has retained its value for centuries, and tends to hold its value even during times of economic instability or downturns. Additionally, investing in gold can help protect you against inflation, as the value of gold typically rises when prices for other goods and services are rising.


Another major advantage of investing in gold is that it is relatively easy to do, even for beginners. There are a number of different ways to purchase gold, from buying physical coins or bars to purchasing shares in gold-backed funds or ETFs. At NuWealth, one of our most popular ETFs is the Pure Gold fund as it allows investors to own pure gold bullion held in a safe by JP Morgan.


Whatever approach you choose, be sure to do your research and take a conservative approach at first. Gold is a volatile investment and can fluctuate significantly over time, so it's important to mitigate your risks by investing wisely, and never forgetting to diversify your portfolio. 



So, what is the best way to invest your money?

When it comes to investing, there is no "one size fits all" approach. What works for one person might not work for another. That's why it's important to understand your own risk tolerance and choose an investing strategy that aligns with it.


There are a few different ways to determine your risk tolerance. One is to simply think about how you would feel if your investment lost money. Would you be OK with that, or would it keep you up at night? Another way to determine your risk tolerance is to ask yourself how much you're willing to lose. Your age can also play a role - if you’re planning on retiring soon, you might have less time in the market than other investors, so periods of downturn might hit you harder, with your portfolio having less time to bounce back and recover. Finally, you can take a risk tolerance quiz or test to get a more objective assessment of your risk tolerance.


Once you have a good understanding of your risk tolerance, you can start to look at different investing strategies. You can find plenty of online resources and tools to help you learn more about different types of investments and choose the strategy that's right for you. Some of these strategies include:

  • Buy Low, Sell High: This involves trying to “time the market” to predict when certain stocks will be low, and then the right time to sell them at their highest value. Without a crystal ball though, this can be very difficult to get right!
  • Pound cost averaging: This involves putting in the same amount each month to the same stock or set of stocks. This means you never pay the lowest price for them, but also never pay the highest price for them - so over time, you end up with a stable rate of investment, and it is easier to avoid accidentally overpaying. It can help take the guesswork out of investing, and is a less risky option - but less risk often also means less of those big wins.
  • Buy and hold: This means buying stocks and just letting them sit over years or even decades. The strategy here is to pick stocks and ETFs or companies that you think will still be going strong well into the future, rather than trying to make a profit in the shorter term. They often say that “time in the market beats timing the market” - that means, those who spend a long time just holding investments often see better returns than those who try to predict the “right times” to buy and sell.
  • Dividend stocks: This strategy focuses on picking stocks that pay out high dividends, rather than trying to find stocks that will go up in price. Dividends are the profits that companies distribute to shareholders. Some investors prefer to go down this route, and see some passive income throughout the year, rather than having to keep an eye on stock prices. However, without a high level of capital to invest, the income from dividend stocks is often rather modest.


To summarise, there isn’t one best way to invest your money. With a little research and planning though, you can feel confident in your ability to make smart investment decisions and grow your money over time, finding the best investment strategy for you. 


No matter what investment strategy you feel is best for you, NuWealth can help set you up for success. With our range of investment options from stocks and ETFs, covering all sorts of sectors including Gold, Property, Technology, Social Media, and more, NuWealth lets you invest your way. You can even automatically round up and invest your spare change, or set monthly automated investing (ideal if the pound cost averaging strategy is up your street). Remember - time in the market beats timing the market - so there’s no better time to start than today.


Keep in mind that the value of your investments can go down as well as up, so you could get back less than you invested. This article isn’t personal advice or a recommendation to buy. If you are unsure about investing, please seek advice from a financial adviser.

When investing in overseas shares, fluctuations in currency rates may well affect the performance of your investments, both positively or negatively.

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Remember when investing, your capital is at risk.
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