Where to invest money

What to consider when looking where to invest money.
What is investing?

It is important to understand the difference between saving and investing before you decide what to do with your money. Simplistically put, 'saving' refers to cash savings  – usually with a high street bank or building society account. Investing can be defined as building your wealth, often through putting your money into other asset classes such as stocks and shares, property, funds, bonds, direct lending, or commodities.

Whereas with savings your money is protected up to the amount £85,000 by the Financial Service Compensation Scheme (FSCS), with investments there are no such guarantees - the value of investments can fall, and you could get back less than you invest. 

Why invest your money?
The benefits of investing

Negligible returns from cash savings

Whilst cash offers you the benefit of certainty and security, the downside is that with such low interest rates returns are often negligible - and once you factor in inflation, in real terms you could actually be losing money. 

 

Make your money work harder

Taking a sensible approach to investing and understanding how to manage risk, can help you target a better return for your money - particularly if you are taking a longer-term approach. 

where to invest  money?
Where to invest money
Different investment types

Types of investment

There are many different types of investments. For example; cash, stocks and shares, bonds, investment funds; property, gold, and alternative investments such as direct lending and peer to peer lending.  

There are pros and cons and different levels of risks to all types of investing, so it is important you understand the asset classes you are considering investing your money in.

Understanding your risk profile

Before deciding where to invest money, examine your objectives and think about your risk profile. For example; is your priority capital preservation or are you willing to take on a greater level of risk to seek out a higher return? Are you looking to invest for a short period of time or are you thinking longer term?

These will all have a bearing on which investments are most suited to your individual situation.

 

Risks of investing

Your capital is at risk

There is no such thing as a completely safe investment. As with all investing your capital is at risk and you may lose more than you put in. It is essential that investors weigh up potential losses against any potential rewards when deciding where to invest money. 

Mitigating risk

With investing your money is not protected by the FSCS. However, there are ways to reduce the risk your money is exposed to. For starters, only invest what you are comfortable with and make sure the choices you make are both sensible and informed. 

Balanced and diversified portfolio

Having a balanced and diversified portfolio is one of the key ways to minimise the impact of losses. Have a balance of cash and investments, and diversify your investments across a range of different asset classes. 

risk of investing

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Target a net return of 6% p.a. with BondMason
Diversified portfolio | 3-year proven track record | Property-backed lending

Established in 2015, we are the UK’s leading Direct Lending specialist, enabling our clients to target consistent performance with a well-diversified portfolio of carefully selected loan opportunities. 

Achieving attractive returns through Direct Lending is about minimising risk. We filter loan opportunities from our 33 approved lending partners.

A focus on property-backed lending helps protect loans by minimising any downside loss. BondMason Core clients have achieved an average net return of 6% p.a. every year since 2015. 

BondMason Team
Investment Calculator
Investment Return Calculator
Try our simple interest calculator to see how much your money could potentially earn

Seeking out attractive returns in the current economic environment is a challenge. Inflation and low interest rates are having a significant impact on the real value of wealth.

As more investors use Direct Lending to target a better return on their cash, why not try our simple investment calculator so see how much you could potentially earn.

Guide: How you could shield your cash from inflation

Since the financial crisis, cash has returned 1% or less a year, consistently below the prevailing level of inflation, so cash savings are actually going backwards in terms of purchasing power.

This guide is helpful reading for savers and investors who are considering where to invest money and want to shield their cash from the effects of inflation, with an overview of;

  • What you can do to protect your cash savings
  • Savings and investment options to meet your financial goals
  • How to find the right balance of cash, savings, and investments
Download your guide

Nothing on this page should be construed as advice. Your capital is at risk. You may wish to seek Professional Advice. See our Terms and Conditions.

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