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Community ideas

Savings and investments

GBP

The Halifax has said that house price growth has risen to 9.7%. Who benefits from this? If you own property as a landlord, then you might benefit when you sell your property or you might be able to increase the rents but overall as a society, we are losing out as so much investment goes into the property market.

The shortage of housing in the UK means prices just keep going up, but the rising prices are predominantly in London. The government pumps much more money into London for infrastructure, the arts and development generally and the banks are happy to lend money to buy property appreciating at over 10% a year. It makes you wonder if the people running the economy are also property owners. We know many members of parliament are cashing in on the shortage.

There might be a shortage of housing, but there is no shortage of oil. It seems the world is awash with the stuff and the oil price is rock bottom. Or is it? Many pundits think it could go even lower. This could be a good time to invest in an oil company as they struggle to cut costs and become more efficient. Two companies I’m keeping an eye on are Royal Dutch Shell who are taking over BG Group and Premier Oil who have taken over some North Sea assets from E.ON. The former seems the safer bet and the latter could bring some good returns in the future.

Rewards

If you have no investments then look at reward current accounts like the Halifax reward current account which pays £5 a month reward subject to a few conditions. They will even pay you £100 for making the switch. Some other banks do reward accounts too but be sure there is no fee before you switch.

Zopa

Interest on savings accounts is dire at the moment so consider lending money with Zopa. You can see a link to their website in the sidebar. Basically, you lend money in £10 chunks so if you have £3000 invested, for example, that is loaned to 300 people. T if hen one or two people don’t pay you back, it’s not a great loss. You can earn 4% lending out over 3 years and 5% over 5 years and there is a rapid return option for selling your loan book if you need your money back. You can also increase your return by recommending Zopa to friends. It’s a relatively safe investment that gives you a reasonable return.

The stock market

The stock markets are turbulent at the moment, but there are bargains to be had. The stock market isn’t really for beginners and you should only invest what you can afford to lose. If you’re just starting investing, then first look for a dealing service. I use the Halifax and dealing fees are expensive at £12.50 a trade, but I tend to use their once a month reduced dealing fee of 3.95. Dealing fees are a major expense for small investors, banks do us no favours.

At the moment there are lots of bargains, the London stock market is at least 15% down on last year’s high. Well-known names such as Lloyds Bank and Barclays seem to be bargains now. If you use a company and you think they have good products and service, then look at their share price. The AA and Tesco  look like a good bet at the moment, for example. You don’t put all you eggs in one basket, though; spread your money around.

That’s all for this week. If you would like to follow this blog just enter your email address in the space at the top of the sidebar. There are posts most days on photography, saving money, investing money and life itself. You can also follow me on Twitter for updates. For more tips and photos, take a look on my Facebook page.

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