As you start to earn a good living and have gotten into a good routine of saving, investment is often the next step towards goals of financial mastery. This part of money is incredibly important for those looking to reach their full income potential. But, of course, it can be hard when you’re first getting started. In a lot of cases, new investors won’t have a lot of money to play with, and it will be hard to find options which suit their needs. If you find yourself in this spot, it can be hard to find a way out of it. But, it doesn’t have to be this way.
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Tax refunds are great, aren’t they? They feel like free money, and most of us are all too willing to treat them as such, splurging them on things we want but wouldn’t normally buy.
However, tax refunds are not actually free. They’re a repayment of extra tax you’ve paid, without earning interest on it. In 2015, the average tax refund was a little over $3,000, so make up for lost time by investing your refund in something that gives you long-term benefits.
Here are three major areas to consider:
- Insurance protection
- Emergency savings
- Extra funds for fun activities or your own interests
We’ll look at these in more detail below.
When it comes to investing, investors look to traditional avenues such as stocks, bonds, real estate and commodities. These avenues are safe, government regulated and potentially lucrative. But for those investors who are searching for something more- especially investments that offer high returns on small capital-alternative investment are worth looking into. Investors should pay attention to three forms of alternative investments in particular: Contract for Difference (CFDs), Spread Betting and (believe it or not) whisky. These forms of investments have been gaining in popularity lately, and they might be a good alternative for those who have extra money to invest.
Contract for Difference
The Contract for Difference (CFD) is a financial instrument that allows investors to speculate on the movement of stock prices without actually owning them (similar to commodities). The investor buys a contract directly from the broker at a fixed price. The investor can profit depending on the difference between the opening and closing price of the contract. They can either go long (buy) if you believe prices will rise or go short (sell) if you believe they will fall. CFDs are useful instruments for hedging your losses in your portfolio. If you have shares that are falling in value, you can use a CFD to profit from the fall in price. CFDs are not just limited to stacks. You can take out CFDs on currencies, bonds, commodities and other financial products.
Are you looking for a new way to invest your money? Well, why not try these unusual but lucrative forms of investment?
Peer-to-Peer Lending
This is a new form of lending and borrowing that is really starting to gain popularity among borrowers and lenders alike. Instead of borrowing from a bank or another type of large lender, borrowers can now borrow from ordinary people. If you want to become a lender, you just use one of the online organisations that operate peer-to-peer lending opportunities. You make money from the interest that is charged to the borrower, making it a great way to make money. Make sure you use a reputable organisation to do this though.
Stamps
There are millions of stamp collectors around the world, so you could potentially make a lot of money from investing in stamps. This is all about tracking down certain stamps and finding out how much they’re worth. Obviously, to make money, you need to buy them at low prices and sell them at higher rates. To be able to do this, you need to teach yourself about stamps and the stamp collecting world. It’s impossible to make money on stamps unless you know what you’re doing.