When starting a family, one of the things you need to consider is your financial situation both now and in the future, and the best way to do this is by investing. If you have savings set aside, you should consider investing in a venture that is worthwhile and will offer both you and your children financial security in the future. To help you decide on the best investment for you, take a look at the following ideas which will help you secure your family’s future.
Pension
One of the most common ways to invest your money is by putting into a pension. This is a tax-friendly way to invest your money, as the majority of people get a basic rate of 20 per cent of tax relief. Any taxpayers who pay more can benefit from more tax returns, however, they must claim for this themselves. You can opt to make pension contributions automatically through your workplace who can set aside a percentage of your wage to be put towards your pension. This is effective, as often people do not notice the reduction in their pay but can actually end up saving a significant amount.
You could also consider opening a pension for your child, which may seem premature, but it makes sense as the earlier you open one the more savings they will have. You, as their parents as well as their grandparents, can make contributions up to £3,660 per year. Many pay into a pension until their child is 18, which is then left untouched until they are 64, leaving them with massive savings which will help them retire comfortably while also helping out children of their own.
Real estate
One of the most lucrative ways to invest is through a tangible asset like property investment, which can offer you massive returns in both the short and long term. A buy-to-let property is an excellent first-time investment, as it provides you consistent income which can be put away, while also offering you the potential for capital appreciation should you decide to sell the property in the future. To achieve success in property investment, you should take a look at online guides from RW Invest, where you can find information on the best property locations, tenant demand and more.
Other types of property investment include commercial real estate, which consists of offices, retail, and land that can be bought to let out to companies. You can use this income to fund your family’s lifestyle, while also benefitting from capital growth on the property you own, which can either be passed onto your children or sold onto fund their university experience or used as a deposit for their first home.
Stocks and shares
The stock market is one of the most traditional ways to invest in your family’s future, although many people are wary of the risk associated with stocks. For a family investment, you’re best sticking with a buy and hold strategy, as you need to consider how stocks will develop in the long run, as companies and products are continually changing and growing.
You can also invest in stocks and shares for your child in the form of a Junior ISA. This is a long-term tax-free savings account which allows you to invest money into stocks on behalf of your child. This is an excellent way to boost your savings, even if you open the account with just £1 you can expect massive growth of up to 5% per year, especially when investment markets surge. These savings can be given to your child when they’re 18 to support them with everything from university fees to homebuying and more.