There are many different ways to take a simple £1,000 and make a very decent profit if you know what you are doing. There are very few certainties in the world of investment, but there are certain methods you can use to increase your chances of success. The fact is that it doesn’t always take a huge investment to make a lot of money.
Get Involved in Peer-to-Peer Lending
Peer-to-Peer or P2P lending has become wildly popular in the UK in recent years. It is when people ask the general public for the funds they need, similar to crowdfunding. Anyone can become a lender with this arrangement. When you lend money to someone, you will (hopefully) be paid back with interest. If you are going to use this method, it is important that you find reputable people to lend to. Lending even £1,000 to someone could yield a quick and tidy profit.
Use the Stock Market to Your Advantage
While the stock market can be quite volatile, it is important that you consider using it to your advantage with the money you have. You will of course want to spend some time reviewing your investment opportunities before choosing any stock in particular. The more you know about how the stock market works, the more effectively you can protect yourself against losses. It is crucial that you analyze market trends and forces before making a final decision.
Mutual funds are essentially an accumulation of money that comes from numerous investors. These funds are managed by a qualified professional, who invests in a number of different types of stocks.
There are lots of these funds to choose from, so you need to carefully review your options. The last thing you want to do is to choose the wrong fund, because you could quickly lose your £1,000. This can be a safer way to utilize the stock market, because you will have an experienced professional making decisions on your behalf.
You will find that investment trusts are sort of like mutual funds in the sense that they both pool money from multiple investors like yourself. The difference between these two types of investments is that trusts can be purchased and sold like traditional shares. One of the great things about investment trusts are the low fees. This is a fairly safe investment, and it can be quite profitable if you can be at least a little patient.
Exchange-Traded-Funds or ETFs offer another good investment opportunity that you might want to take advantage of. These securities track indexes and you can buy and sell them just like normal stocks. These funds do not have any professionals choosing the stocks, as they work by tracking a simple index. This means that you won’t have to worry about paying any steep fees like you might with a mutual fund.
Pay Off Your Debt
If you have recently come into some money, you should think about using it to pay off your debt. Once you no longer have to worry about paying back creditors, you can start to actually save up money from what you make with each pay check. It can be tempting to take your money and do something fun with it, but paying off your debt will benefit you in the long term. The less debt you have, the more money you will be able to retain on a regular basis.
Invest in Yourself
Sometimes the best thing to invest in is yourself. If you want to go back to college, you should consider putting your £1,000 towards earning a degree. Once you graduate your money making potential will be far higher. This is by no means a high way to start earning more, but it is a good investment nonetheless.
These days most people underestimate the value of a good college education. It’s true that you will have to spend a decent amount of money, but it is well worth it in the end. Just make sure that you choose a reputable school to attend so the degree you earn is actually worth something.
What to Consider
There are a few important things to consider when choosing the right way to invest your money. You will need to know how big of a risk you are taking and what you can do to minimize it. Almost all worthwhile investments come with risk, but it’s not always on the same level. The more you learn about this, the better able you will be to make the right choices. Some people are willing to take more risk than others with their money, so you need to figure out what your priorities are. There are lots of safe investments that guarantee a return, but it’s usually modest profits over a long period of time.