Many want financial freedom but are often left wondering how this can be achieved.
You might wonder if there are ways to earn extra money outside of your day job but not really know where to look.
Well, if you have the spare cash in your pocket to invest, you’re already off to a good start.
A budget of £75k, in particular, offers a fantastic opportunity to grow your finances with investment.
But where should you look?
Property
Arguably one of the best methods of securing a solid stream of passive income, investing in property allows you to earn returns through two different methods simultaneously.
Now, it might not be as glamorous or flashy as investing in stocks, but the property is widely regarded as the most reliable for long-term investment opportunities.
There are several ways to get into property investment, which might make it appear more flexible than you might be led to believe.
One of the often-seen property investment tips for beginners is to consider buy-to-let properties.
With buy-to-let, investors will see a consistent cash flow of passive income through collecting rental income from tenants each month.
Proceeding with this method also means you earn returns through two different ways – rental income and capital appreciation.
Rental income provides a consistent cash flow each month through rental payments.
Capital appreciation is essentially the property’s value as it grows over time. The idea is that once you decide to sell your property after a period, you will hopefully be able to make a considerable profit.
One of the biggest strengths of property investment is its stability compared to other investment strategies.
Property exists as a physical asset, meaning its value does not rapidly fluctuate like liquid assets (i.e. stocks and crypto).
This makes for a perfect option for those seeking a low-risk opportunity, as you are less likely to lose money on your investment as long as you are patient.
For those looking to invest £75k in property, however, your options may be slightly limited.
It’s not the end of the world, though!
So long as you are clever with your investments, you should be able to thrive within this venture.
By borrowing a buy-to-let mortgage, you could potentially be able to purchase properties outside of your budget.
Consequently, you would have to deal with the current high-interest rates seen with mortgages in the UK at the moment.
Alternatively, you could go down the route of investing in off-plan properties.
These properties are currently in the development or construction stages and are typically much cheaper than traditional property investment strategies.
Not only can you purchase these properties for below-market value prices, but you can also set up payment plans to spread out the costs of investment – saving you money and allowing you to purchase new-build properties in some of the best areas in the UK.
In short, UK real estate is one of the most robust investment options in 2023: offering a potent mix of high returns, low risks and affordable prices.
Stocks
Most likely, the first thing you think of when you hear the word “investment”, investing in the stock market is undoubtedly one of the most popular methods throughout history.
Stocks are small portions of ownership in a company that the company can choose to sell as a way of raising funds.
To keep things simple:
The more stocks you own, the more significant the stake in the company you own.
The value of stocks rises and falls based entirely on your chosen company’s performance.
Invest in the stocks of a well-performing company, and then the value will skyrocket.
In these cases, you can then sell stocks for profit or reinvest to increase the amount you own.
Some companies will also provide additional stocks for shareholders in the form of a dividend – providing that they perform well.
Of course, the opposite also applies:
Invest in a company that’s performing poorly, and the value of your stocks could drop dramatically.
If you’re not careful, this also means you could lose a significant amount of money.
Investing in stocks requires a considerable deal of research.
You need to keep a sharp eye on the market to see how your portfolio is performing or have the means to hire a financial manager to do the job for you.
A good method to avoid risk is to invest in companies that consistently perform well.
However, this can get quite expensive as stocks of those types come with a much larger price tag, and you may not be able to own as many stocks as you would through investing in smaller/riskier ventures.
Cryptocurrency
One of the most talked about investment methods, crypto, has been the freshest and most hyped strategy in recent years.
A form of online currency, cryptocurrency operates through the blockchain, meaning each specific coin/form is decentralised and contained on a series of servers.
Because of this decentralised nature, cryptocurrencies have little to no regulations.
Of course, this acts as both a major selling point and a significant risk.
Making a name for itself as the ‘Wild West’ of investing strategies, here are countless horror stories of investors being scammed or having their crypto wallets hacked and losing everything in the process.
However, many will say that high risk goes hand in hand with high reward.
At the time of writing, one Bitcoin costs around £23144.81.
To contrast, in 2016, this cost was £370.
It’s clear that under the right circumstances, investing in cryptocurrency can bring massive profit in a short amount of time.
It’s important to note, however, that the market is so unstable and subject to volatility and can completely change on a whim that you can quickly find yourself in uncharted waters.
So, this is an investment strategy best suited for those with higher risk tolerance and the time to maintain a crypto wallet and investigate the quick-moving market.
Conclusion
Remember, there is no singular route to success when it comes to investment. Your needs will vary, and each option will bring its own pros and cons.
You must take care to comprehensively research, evaluate, and consider your options before signing on the dotted line – it can make the difference between devastating success and spectacular failure.
