Investing For Your Future: How To Build A Portfolio From Scratch

Providing for the future of you and your family can be a daunting prospect, but it shouldn’t be. With careful planning and smart investment choices, anyone can begin to build a portfolio of investments that will yield a long-term return. This will help them to fund their retirement and assist them when they help their adult children make their first steps into home ownership.

Build A Foundation Of Physical Investments

The foundation of your financial planning for the future should be built upon long-term investments in physical assets that have proven the test of time. Two of the best-performing assets over time are property and precious metals. If you own your own home you have already made a significant investment in your future. You can diversify this investment by buying precious physical metals like gold and silver.

With the help of Physical Gold, anyone can begin to build a precious metal portfolio, often from a small investment. They can hold onto your gold bars, and coins for you, or they can be transferred to you to hold. As the price of gold increases, the value of your bars and coins also increases and Physical Gold can help you sell them for a profit too. Unlike most other investments, any profits made in gold can be completely tax free if the correct coins are traded. Be sure to ask the gold dealer for guidance.

Though the price of gold and other precious metals can vary in the short term, over longer periods of time, the prices rise. Precious metal prices spike in times of economic uncertainty too, as they are a physical and stable asset whereas bonds, stocks, and property prices can rise and fall due to circumstances outside of their markets such as inflation.

Small-Scale Stock Investing

There are a number of different smartphone apps and websites that can help people to invest in the stock market on a small scale. This often involves buying fractions of successful stocks and giving the investments time to grow in value before selling and moving on to a new stock. With some research and patience, anyone can build a small but successful stock portfolio. By reinvesting the returns, this portfolio can grow organically from your initial investment sum.

The risks in the stock market are greater than those in the commodities market. Commodities are things like precious metals such as gold and silver, known as hard commodities. There are also soft commodities such as sugar, cocoa, and wheat. The value of a stock can be affected by many external forces, primarily the performance of the business but also the performance of the stock market and the economy as a whole. Where there is extra risk, there is also an opportunity for additional profit, which makes the stock market so attractive to so many people and investment groups.

Before investing in any specific stock you should do some research on the business and the history of its stock market value. There are many resources to help, and plenty of opinions on both social and traditional media. Bear in mind that the stock market is difficult to predict, and even the most confident or ‘bullish’ investors can be wrong about how a stock will perform in the future. Research and diversity are key.

Long-Term Property Investing

If you own your own home you have the perfect investment opportunity. By investing in your own property, or by buying another, you can yield great returns over time while also taking advantage of the features you add to a property. Small investments to increase the size or quality of a property can have a massive positive effect on its value if done smartly. This builds equity for you in the home that you receive when you sell.

The highest-value investment you can make in a property you own is to add living space, especially bedrooms. Though the cost of the investment may be high, the return you receive when you sell the property should more than cover the cost of the investment. In fact, you can often achieve a return of over 15%, making home investments much more profitable than savings accounts and a lot less risky than a stock market investment.

Investing in a buy-to-let property can yield big returns. Not only do you own the property, which will gain value over time, but you also receive a rental income. If you take on a mortgage to own the property, and your rental income covers this cost with a little profit for yourself, the mortgage is paid by your tenant while you reap the rewards. With the help, and cost, of a property management company, this income can be entirely passive as they handle the paperwork and responsibilities of renting for you.

In recent years increases to Stamp Duty rates, especially when purchasing investment properties, has significantly impacted the cost of property investing. Be sure to do your math on all associated costs before jumping in.

Whether you have a large pot of money to play with or a small amount to save and invest every month, there are opportunities available to you to begin to build your own investment portfolio. Remember to do your research and start small. Diversifying your portfolio is important, so make sure you do not put all your eggs in one investment basket.

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