Where to Invest £50,000 for Growth

So you want to know where to invest £50,000. Let’s assume you came into some money and the amount is £50k. A lump sum like that can transform your circumstances if used correctly.

If you are unsure what to do with £50k then the best thing to do is to sit down with a pen and a piece of paper and work up a plan.

Firstly, jot down the list of debts that you have like credit card debts, short term loans, car loans etc. Write down anything that has a high interest repayment. Now if you can, clear these loans and as long as you have sufficient capital left over then you can invest this sum. This will be an excellent starting point.

Before you invest you need to consider a number of things.

Risk

You should consider your appetite for risk, in tandem with think about what your objectives are. Do you want regular income, or capital growth over the long term. Also consider your investment time line. This will be influenced by your age profile, if you are in your 40’s or 50’s then you can invest for a longer period of time and benefit from greater capital growth. If you are in your 70’s or 80’s then income may be more important.

Diversification

The most qualified investment advisors will tell you the best way to mitigate risk is to diversify and that means having a healthy mix of bonds, equities, cash, property and alternatives. The more diverse your portfolio then the less chance you have of being affected by a downturn in property prices, or if the stock market were to take a turn in a negative direction then if you only have a percentage invested, only this amount of your portfolio will be affected.

Does age matter?

Age is a major factor, lets consider a person who is still working, then that person can afford to make mistakes especially if they have a high disposable income and they have time to make up for their losses. This also allows a person of working age to take on more risk than would be normally advised. A further advantage for a person of a working age is the ability to save more funds to invest alongside the lump sum that they have to invest.

How to Minimise Tax

You need to ensure that you pay as little tax on your profits as possible. A Renewable energy investment is not always tax free, but if you consider a Biomass Energy Project which produces wood pellets then the asset is considered the same as a timber investment, therefore exempt from Income tax and Inheritance tax. Click here for Taxation Status.

Be Careful of Fees!

Whichever course of action you decide to take, make sure you factor in the charges and taxes due for each investment that you make. This will give you a clearer picture of your net return. Be aware of the fees charged, some investment managers charge higher fees than others and if your returns are not giving you a return above the rate of inflation, then the high fees could be wiping out your investment returns.

Renewable Energy Investment

Renewable Energy can produce some fantastic returns for investors, but all options should be considered and it is important to do your research into the product before you invest. Renewable Energy has achieved phenomenal growth over the past 20 years. We are now starting to see this category really take off, as technology improves and the costs of infrastructure continue to become more affordable the returns being made are really taking off. The growth levels of the past 20 years of 25% per year will seem small when we really start to see the move from Oil and Gas over to Renewable energy. The future is here and the future is Renewable Energy.

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