If you are looking towards cutting back on your expenses, you will be surprised to find that you have a fair amount of extra cash to spare. Instead of just going out and spending all the money over every small need, it is smart if you cut back on certain things and invest that cash into a different form. 

Although buying luxury goods and services can be fun, it doesn’t help toward your future. So, instead of blowing all the money, it is best to invest and donate to charities such as BookTrust

This is a responsible approach that the UK government would certainly endorse during times of uncertainty. 

There are many competing ways you could use your cash to chase a positive expected return on your money, but here are three of the most common best.

Paying Down Debt

Although not necessarily investing, chances are the interest rate on your debt is going to be higher if you fail to put your money into it at the right time. 

This makes it more of a contribution than of an investment with your money over anything else. By paying off your debt with the interest, you are just going to save even more money, because you will not be burdened by the debt amount or pay extra interest towards it. 

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Paying off debt is a ‘risk-free’ investment option, because if you pay down your loan by £1,000, you can calculate with precision the exact interest saving which will be earned. This is in contrast to other investments such as buying shares, where the return is variable and not known in advance. This dynamic means that even if your interest rate is lower than the potential positive returns on alternative investments – it may still be more attractive. 

This way, by reducing the amount of money you need to pay towards loans, you can then save and invest the same into several other options for saving the money. You can opt for a payday loan which could be repaid against your next pay cheque to pay for your debts that has huge interests and minimise financial burden. 

Property

Property is another way to invest your money. People are always going to need a place to live and businesses are always going to need a location base to establish. Therefore, it has proved itself to be a quality and investment-grade asset class. Pensions and other long term savings vehicles typically allocate a portion of their portfolio to property. As the property market doesn’t exactly follow the stock market, property provides an element of diversification away from the peaks and troughs of the stock indices. 

The best property investing books emphasise that not all property is equal. Different property types in different areas will see dramatically different levels of rental demand, and this will influence the return you could expect to see when buying-to-let. 

Of course, you don’t want to just go out and buy any property available. Instead, you have to do your research, find out what locations are in demand and where you can find the best prices for your property. After doing the necessary research, ensure that you have modelled a detailed budget for costs including maintenance and repair work, and factor in a sensible assumption for void periods, as it would be very bullish to assume that your property will be fully let for the foreseeable future. 

Gold

No matter the economic climate, gold could be a good investment option available to you. Investing in gold is popular among some investor groups because its value has increased over the last few years. 

The best investing books take two conflicting views on investments in gold. One half of authors regard the yellow metal as a semi-effective hedge against inflation. In the current economic climate, where inflation risk is generally low and not catching headlines, this might not appeal to investors. However, inflation, like the economy itself, tends to gyrate in cycles, and gold’s anti-inflation properties could become very useful to investor portfolios. 

The other half of financial authors dismiss gold as being unsuitable for a long term investment portfolio, on the basis that these cold lumps of metal don’t actively produce a yield (and indeed their storage costs mean that they effectively have a negative yield). 

This is because investors see gold as a safe haven for investing their money. Instead of placing the money into a shaky investment stock option, gold has a decent return value in the global market. Knowing how to invest in gold is important, as this elusive asset class is accessible through several different avenues, such as:

  1. Direct purchase
  2. Purchase and storage via third party
  3. Indirect investment via the shares of a gold producer
  4. Derivatives

All precious metals are potentially investable assets, including silver and platinum, although gold remains by far the most commonly invested-in asset class within the commodities group.