You’ve left your job with a well-deserved redundancy payoff – but what now? Perhaps you have another job lined up, or the mortgage is already settled, and you’re looking for inspiration. Or maybe you just want to get your money working rather than just stagnating in a current account. Maybe, perhaps, you want to engage in a strategy of high risk, high reward. Once your redundancy payment is settled you might want to investigate the options for your money – perhaps go for one or several and make some money!
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While ISAs (Individual Savings Accounts) will be well known, the Innovative Finance ISA is perhaps less well known. An ISA allows savers to put aside up to £15,240 (2016/17) into cash and stocks and shares without it being taxed. However, the IFISAs, introduced in April 2016, allow people to invest in peer2peer lending schemes as a tax-free ISA for the first time. So for example, you might invest through a company such as Crowd2fund, in one or several SMEs or growing businesses; they could be anything from travel to tech, or fashion to food. While there is an element of risk involved in investment in fledgling businesses, savers may get an APR of up to 10% – and there’s a level of satisfaction in helping new companies.
You should start thinking about investing your money. With house prices continuing to rise, you might believe that the sooner you can invest in property the better. But where to start? Unless your redundancy package is very substantial, you probably won’t be able to afford a property in cash. However, there are a number of strategies, such as paying off your own mortgage and starting another or buying a home that needs renovation and sprucing it up for rental purposes. Perhaps you could buy a property jointly with friends or family. A new option is the proliferation of crowdfunding: buying a home alongside other investors through companies such as Property Partner or The House Crowd, and profiting from rent and house appreciation, without the hassle of actually going through the paperwork.
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A niche interest for many, but one that can reap dividends if you know what you’re looking for. There are many sites that might help you decide, and if you don’t feel confident enough to make your own choices then why not enlist experts to do it for you – for example, wine is one of the best-performing assets you can invest in, and a company such as wineinvestment.com can do the legwork for you by buying and selling wines from Europe and beyond. Other options include artwork, coins, and stamps.
Once upon a time, and not that long ago, savers would choose to place their money in a secure account to gather interest. However, with the Bank of England interest rate at 0.25% you’ll need to invest for a long time, or large amounts, to reap dividends. However, at least your money will be safe.
If investing in a crowdfunded business isn’t for you, then how about starting your own? Redundancy allows the mind to clear and make those ideas that you’ve always wanted to put into practice a reality. You might spend some of the funds on training and/or technology, before diving in, and you might wish to bring in family and friends. Losing your job could be just the springboard your life needs.