Sunday, September 23, 2012

Different Investments for Different People

Different investments are suitable for people in difference situations. Choosing how to invest comes down to many factors, including the amount of available funds, the aim of the investment, the point in which the investor finds themselves in their life, and personal preference. Below are some of the investments that should be considered by people in different circumstances.

Those with Limited to Medium Funds

For those with less than £12,000 to invest a year an ISA might be worth considering. The current ISA limit is set at £11,280. All of this can be put towards a stocks and shares ISA but it can be split between a stocks and shares ISA and a cash ISA; up to half of it can be put towards the cash ISA. The advantage of an ISA is the tax benefit; no tax has to be paid on interest or capital gains, something that can make a significant difference over several years. ISA's are ideal to those investing over a long period. Riskier, but potentially higher reward investments, might be more attractive to those investing a similar amount over a short period, although here it is advisable to split it across a number of investments to spread the risk.

Wealthy Investors

An ISA will not be sufficient for those wishing to invest particularly large amounts, although they will be able to invest up to £11,280 in one. Property investment is possibly the most appropriate as, despite the current market, house prices are still likely to rise in the future. With housing, though, it is important to choose homes in the right areas. If investing in real estate properties can be rented out and sold once the value has increased. It is likely that property will continue to be a way that people can make big investment gains in the future.

Investing on Behalf of Children

There are a number of children's savings plans out there, with the relatively new Junior ISA the best known of these. The Junior ISA works in a similar way to a regular ISA with a set maximum allowance and no tax being payable on interest or capital gains. There are two important distinctions though; the limit is lower than a regular ISA - currently £3,600 - and it can't be touched until the child turns eighteen. At this point they gain control of the ISA and can withdraw the accumulated funds if they like.

The Young and Middle Aged

There is a pension problem amongst young people and even those in their forties and fifties, with many yet to have started planning for their retirement. This is partly due to a lack of good employer pensions as well as the failure of individuals to start their own. Those who are able to should start to pay into a pension plan as soon as possible. The younger someone is when they start a pension the better, and a few years can make a big difference come retirement.

The Retired

Those already retired will hopefully already have an adequate pension, so what are good investments for them? The answer might lie in investing in companies through stocks and shares. Asian investment funds are one option due to the current growth of the Asian stock market, although there are many other options too.

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