Investing on Different Budgets

Investing is a good way of increasing your wealth and letting your money work for you. It is, though, sometimes seen as something that benefits the wealthy with others unable to invest enough to make a difference. With a high amount of investment capital you have an opportunity for significant gains, but that doesn’t mean those with less available finance can’t invest and still make useful gains.

Investing a Small Amount Each Month

Investing a small amount each month can become beneficial in the long run. Over time your investment will gradually build up as an increasing amount has been invested and your investments grow. A good option with regular, but not particularly large investments could be a stocks and shares ISA. With ISA’s you don’t have to pay tax on investment gains, meaning you get more of the profits than you will with other investment products. You will be investing in the stocks and shares of companies and they are good for consistent investments over a period of time. A Stocks and Shares ISA is more likely to bring you significant gains than a cash ISA. Stocks and shares ISA’s can also be good when investing high amounts, as you can put over £10,000 a year towards an ISA.

Investing a Small One-off Amount

You may be wondering if it is really worth investing a relatively small lump sum, especially if you don’t expect to be able to invest more at a later date. Though there is no guarantee of a large return, it doesn’t mean it isn’t possible. The best option may be to buy shares in a company. Owning a small amount of shares in the right company can be very beneficial. A start-up company you think has a chance of success or a failing company who look to be turning a corner could be good options as shares will be starting from a low value.

Investing a Large Amount Each Month

Being able to invest a large amount each month has obvious benefits. High returns are possible due to the amounts and the regularity means that the overall pot keeps growing. A good option could be a self-invested pension (SIP). These are pension schemes where you can make your own investment decisions. This has the advantage of freedom and being able to make choices that are best for you. You can also start to withdraw from the pension earlier than you can with other types of pensions. This can assist you if you have ambitions to retire early.

Investing a Large One-off Amount

The benefit of a large one-off investment is that the investment capital is high from the start, meaning the potential for high gains. It may be wise to spread investments across different products as this severely limits the chances of everything being wiped out as a result of one bad choice. This gives you more security. In the past property would probably have been the most sensible investment due to the significant increases there has been. Though not as much of a guarantee now, property could still be a good choice. Just because property isn’t rising as much as it was doesn’t mean there won’t still be good gains over time. Whether this is the right option for you depends on how long you wish to wait for a return.

It is perhaps obvious that large investments have the potential for large gains. That does not mean small investments don’t have potential returns though. They may not be as high, but they can still make a difference.

Andrew Marshall ©