Did you know that around 67%* of UK Millennial's (25 - 44 year olds) have no savings or financial investments? Saving for your future is important but it doesn't have to be boring. When it comes to investing your hard-earned cash, here are your main options:
*2020 UK Financial Lives Survey
Crypto: Welcome to The Wild West
A word that is probably all too familiar even to those with no interest in crypto currency. It’s the investment perspective that has taken the world by storm, and whilst the figures and stories may make it the most obvious choice to maximise returns, it isn't always as it seems…
The biggest issue with crypto is that it isn't regulated by the FCA or any financial body that would offer you as the investor protection if anything should go wrong. There's nothing to stop someone weaving a fantastic story about a prosperous new crypto currency that you should invest in and then making off with all your money as the market crashes in a few weeks or months.
This isn't to say that all crypto is a shady business, there is money to be made here by investing in the right platforms but due to the lack of regulation, it’s a a dog-eat-dog world and might put you off investing altogether!
So let's explore some more possibilities shall we?
High Street Banks - Savings and Investments
The choice your parents would thank you for, but your wallet wouldn't...
Cash ISA's or high street bank savings accounts are probably the safest option out there.
Even if the bank goes completely bust (which is strangely a little more likely than in previous decades) your money is still protected by the Financial Services Compensation Scheme (FSCS). This scheme is backed by the government and protects your capital up to £85,000. It’s a great scheme and one to watch out for if you are thinking of investing in any product. Needless to say, anything unregulated like Crypto Currency or NFT's don't offer this great safety net.
This is a big plus for safety against losing everything, however the downside to this (and it is a big one) is that your money will probably earn you around 0.5-1.5%* per year. That’s an average of £10 for every £1000 invested. Coupled with the low returns is also the fact that ISA's are....well....boring! There is no interesting asset into which to invest your money, no daily tracker to look at and no “buy buy buy, sell sell sell” buzz.
Your money just sits there not doing a lot and some banks might even restrict you on when you can remove some or all of your funds, so whilst this is the safest option on the list, the interest gained from both your invested funds and from an excitement perspective are very minimal here. If you’re still struggling or not sure on where or how to invest your money perhaps the next choice will offer some insight…
*https://www.which.co.uk/money/savings-and-isas/isas/cash-isas/how-to-find-the-best-cash-isa-atnpd4b2rv3u
IFA (Independent Financial Advisor)
An IFA or independent financial advisor is a neutral individual who will take you on as a client and assess your 'appetite for risk'. Basically, they'll ask you a series of questions and find out what the best option would be for you to invest your money. What they are trying to do is work out how much you could afford to lose in a 'worst case' scenario, they would also try to ascertain some of your personal interests to tailor investments which would interest you on a personal level.
The cost of this in most cases isn't free and will vary between each individual IFA. They do usually charge based on success, which means giving up a piece of your returns. However, they will ask for a minimum investment level to make sure giving their advice and guidance will be worth their time. Often this is into the £000's or even tens of £000s meaning if you have a modest amount to invest, you might be steered towards the direction of low risk, low yield investments anyways, so back to the Banks ISAs!
Don't give up......there is a good 'alternative' (pun intended).
Alternative Investments
Alternative investments work in the same way as any other investment, but instead of investing in a volatile market like crypto where the 'asset' is a digital (non physical) coin, you put your money into a real asset which will hopefully increase in value such as whiskey, watches, wine or cars!
The benefit to this you have a real asset to invest in, meaning you can do your own research into the market and the product itself to make a more informed decision before you choose what to invest in. The other benefit to this if you have a personal interest in watches or cars, is that it allows you to have your own personal collection or just have a keen interest, adding another level of interest which may help sway your decision.
There are still things to watch out for however. Most alternative investments are not regulated by the Financial Conduct Authority and therefore won’t offer the Financial Services Compensation Scheme. They may also offer false promises of returns and use clever branding to pull investors in.
For a first time investor, we always recommend going with a company that has some form of regulation and can give you an FRN or Financial Services Registration Number. If a firm has this, they are subject to regulation in some way by the Financial Conduct Authority. This means they will have to back up any marketing claims on returns and provide full documentation for each investment, helping you to make a more informed decision.
The CarCrowd
If you’re reading this, most of you will already know who we are and what we do, but if you are perhaps new to the platform or have found yourself here from different sources, first off welcome! We are TheCarCrowd, a UK based alternative investment platform offering petrol heads and savvy qualifying investors a way to invest in modern classic cars.
We want to provide a different option when it comes to investing. We want people to feel passionate about their investments, have a real connection to where they put their capital and give a real chance of delivering some fantastic returns. But on top of all that is, we want to be fair, transparent and make investors feel safe. No big, unrealistic promises on returns, no fancy jargon to hide a lack of control and no keeping assets locked away in a vault away from investors. At TheCarCrowd we want to help people diversify their portfolios and curate their own classic car collection, full of amazing cars. We then want you to feel connected to your investment, visit the cars at our bespoke motor museum and connect with other investors.
Find out everything about us on our website
We scour the UK to find the countries best examples of modern classic cars. Ones which we feel have a good chance of future appreciation. We put in well over 50 hours to bring each car to the platform and perform rigorous due diligence to make sure every car is investment worthy. We also pride ourselves on the fact that we are regulated by the FCA as an appointed representative of Infinity Asset Management LLP - FRN464315. We are also very transparent about the risks of investing on our website, this can also be found here.
We are also growing a community of petrolheads and investors alike, hosting monthly cars and coffee events at our midlands based museum as well as other events throughout the year.
Whichever route you choose as an investor, it's vital that you do your own research and fully understand all the risks involved before committing. Ask questions, look out for the companies FRN and speak to other investors to help shape your thinking.
Good luck!
The CarCrowd Team.
The information above is provided for information purposes only. This information does not constitute:
- an offer or an invitation to any person in any jurisdiction to invest;
- a recommendation by or advice to on the merits or otherwise of investing in any of the products shown;
- a guarantee, forecast, projection or estimate of any future returns (or cash flows) on any investment; or
- investment, tax or other advice. You should consult your own legal, tax, accounting and other professional advisers before making any investment.
Information may comprise an internal analysis by the company and be based on the subjective views of, and various assumptions made by the company at the date of this communication. The information provided does not contain, or attempt to contain, an analysis of all possible investments open to individuals.
Past performance is not a guide to future performance, nor a reliable indicator of future results or performance. The value of investments, and the income or capital entitlement which may derive from them, if any, may go down as well as up and is not guaranteed. Changes in economic or political conditions or other factors can substantially and potentially adversely affect the value of investments.
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