Saving money in the hope of turning unspent money into a small fortune is something we’re told to do from a young age. Rainy day funds, university tuition fees or even the deposit for a house often start as something small, with growth helped along by interest or inflation. But walk into your nearest bank, and you’ll be met with pitiful rates of well under 1% on your returns.
Investing money in 2018 has to be riskier than it once was, with the interest rates enjoyed by older generations possibly gone forever. Now, you’ll need a financial advisor, wealth manager, and a hedge fund with multiple stocks, properties and business investments, all with a minimum investment likely in the thousands of pounds.
Luckily, there are plenty of ways around this unfair, restricted entry to investment, and you won’t need the thousands of pounds that your bank manager will encourage you to gamble in order to make some extra money. Thanks to pitiful interest rates and a lack of incentive for investors, there are plenty of both high-tech and traditional ways to make a profit even from the smallest amount of initial capital.
Moneybox, and similar saving apps
Having to deposit funds in an account or save physical notes and coins is a bit of a pain, plus you could end up leaving yourself short if you try to save too much in one month. This is where this ingenious app makes saving simple, and can turn small amounts of money into big ones pretty quickly.
MoneyBox is available with both Apple and Android products, and is compatible with most major UK banks. Users can input an amount they’d like to save per month, or use the clever ’round up’ feature, which automatically adds together the pennies that you’d normally get as change to create a savings fund.
App users then have several investment options to choose from, including an aggressive and safer investment options like stocks and shares ISAs, as well as lifetime ISAs. The amount that you wish to invest can be boosted too, especially around payday or if you get your hands on some spare cash. MoneyBox won’t make you a millionaire overnight and there’s more risk with the stocks and shares options, but you’ll certainly get better rates than you would at the bank.
Buying shares is always a favored investment option, with a little bit of knowledge and the right timing helping people to make money quickly. However, some shares can be prohibitively expensive, with buy-in and cash-out fees making smaller investments not as worthwhile. This is where penny stocks come into play, with investors opting for shares in smaller public listed companies rather than blue chip stocks or FTSE listed organizations. Granted you may end up backing some losers as well as winners, but investing in a start-up that goes on to be big can be extremely rewarding, both financially and mentally.
OK, so going into a casino and putting your jar of pennies on lucky number 7 may seem like a quick and easy way to turn nothing into something, but your odds of 37 to 1 aren’t a guaranteed investment. However, there is another game in the casino where money can be made on a much more regular, risk free basis.
Poker does have elements of luck, but in practice players have the option of whether to gamble if their hand isn’t looking particularly strong or the turns haven’t been kind to them. Poker is just as much a game of skill, and professional poker players can make careers out of knowing the game inside out and knowing what to do when they come up against certain players.
For the Average Joe (or Jane) who has a few spare pounds at the end of the week, there’s an easier way than entering a poker tournament or having to trek to a city-centre casino, with online poker a much easier option. By playing it smart and only going for it when your odds are looking good, players with a small amount of cash can soon go places with a few strategic wins. Just make sure you carefully manage your bankroll, and don’t get too carried away with your gambling. If you only stick to the small amount you’d usually be saving, then you won’t be out of pocket if you end up losing the game.
Peer to peer lending
Lending money certainly isn’t a new concept, but the practice has often been limited to banks, finance companies and even criminal loan sharks in the past. Again, the internet has come to rescue with a new solution that frees up lending capital and allows investors to get a piece of the action with lowered risks.
There are plenty of P2P lending platforms out there, with most available in app form, so you can start making money from the interest rate applied to other people’s loans. Some agencies will even protect your investment with a guarantee of your return even if the person borrowing the money doesn’t repay, as you won’t be dealing directly with individuals, but rather a lending ‘pot’. Most P2P platforms have a minimum investment, but this can be as low as £100, with pretty attractive returns of around 6% per year
Assess your finances
By checking your monthly outgoings and making a few simple changes, many people don’t necessarily need to spend or invest to create an additional income. It’s estimated that a typical household can save over £300 per year just by switching energy and phone providers, which could mean a lot of extra money per month. It’s also worth looking at the little things too. Is that Netflix subscription really worth it? Do you need to give that disgraced charity £5 a month? Just by cancelling a couple of ‘small’ direct debits, the annual savings could be well into the hundreds.
If you’re thinking of investing some money into a new venture, always go with the most secure, trusted option, no matter how small the amount. It’s very easy for scammers and confidence tricksters to advertise what looks like an official and lucrative investment, only for your money to disappear when it’s time for a withdrawal. By sticking with large banks, renowned investment companies and online services that have plenty of reviews and even the green ‘trusted’ tick, you’ll lower your chances of encountering fraudsters considerably.