If you want to grow your money but don’t think a REIT investment is right for you, there are various alternatives available. Here are just some of the options you might want to consider, although if you’re in any doubt, speak to a financial advisor before taking action.
Stocks
Investing in the stock market can be an effective way to grow your wealth over the long term. However, as with REITs, there are risks involved and you could potentially lose some or all of your original investment. If you are considering this option, our guide to the stock market covers everything you need to know to get started.
Another question you could well be asking yourself is, “which is a better investment, REITs or stocks?”
In terms of inflation and interest rates, it could be argued that stocks are a riskier option. This is because when interest rates rise, share prices fall, causing stock traders to short sell their stocks out of worry that prices won’t rise again in the future.
REITs, on the other hand, react in the opposite way. Their prices rise with interest rates, rather than fall. Economic growth helps boost the value of REITs, and, in turn, your earnings.
Bonds
Investing in bonds works in a similar way to taking out a loan. When you buy bonds, an institution, such as the government, or company is effectively borrowing money from you with an obligation to pay it back with interest. Buying bonds is generally considered safer than investing in REITs or stocks and shares, however, the returns tend to be much lower.
Property
You could choose to invest in property using other methods which come with lower risks. For example, if you have a large lump sum to invest, you may want to consider buying a property and then renting it out to secure a regular monthly income.
Alternatively, if you have a spare room in your existing home, you could take in a lodger. The rent-a-room scheme allows you to earn up to £7,500 a year tax-free (£3,750 if you share the income with someone else), making it a tax-efficient way of generating some extra income.
Fixed rate savings accounts
Fixed rate bonds (also known as fixed term deposit accounts) can be a great way to grow your wealth if you have a lump sum to invest. A fixed rate bond is a type of savings account that locks your money in at a fixed rate of interest for a specified amount of time, typically one year, two years, three years or five years.
In return for tying up your cash, you’ll earn a highly competitive interest rate for a set period (the best interest rates are usually available on longer terms). This makes them an attractive option if you want to earn a guaranteed return and would rather not put your money at risk.
Grow your wealth with Raisin UK
Although we don’t currently offer REIT investments, you’ll find a wide range of high-interest savings accounts in the Raisin UK marketplace.
Our fixed rate bonds offer competitive interest rates that don’t change from the day you open the account until the end of your term. Plus, all of the savings accounts in our marketplace are covered by the Financial Services Compensation Scheme (or European equivalent), giving you peace of mind that your money’s safe and secure.
To quickly and easily open a savings account with one of our partner banks, simply register for a free Raisin UK Account and apply for your chosen account today.
