On the 11th March 2020, the UK’s central bank; the Bank of England reduced the bank interest rate from 0.75% to 0.25%, a couple of weeks later it went to 0.1%. The bank base rate has been lower than 1% for more than 10 years. The longest time interest rate has been so low in living memory. As its the case, it prompted the question of investment options.
The question of risk and investment always come to the different types of investments and the risk and reward. The low interest rate and the crash in the world’s stock markets inevitably lead to the question of whether properties are still the best form of investments.
Real Estate Investment
Properties are still the ‘real deal’ for several people interested in the old way of making money. The ‘brick and mortal’ business will never die out, supporters will insist. This is because people will always want somewhere to live and despite a lot of hammering through taxation in the U.K., the market has always been buoyant. It is especially true in the U.K. where an English man’s house is considered to be his castle ( same applies to the English lady I hasten to say). There is a lot of pride in our homes whether rented or purchased. Thanks to the current low interest rate, buying properties has risen again to the top of the investment list.
Real estate can really be joyful. There is something about houses that provides joy to people who love them. They are physical unlike shares or some other forms of investments. I don’t get emotionally attached to houses and I am terrible at fixing dilapidated properties. I have been known to do more damage than a 2 year old with a paint brush, so I stay away from fixing houses. Instead I get the experts to rent the houses out and do the repair work. So properties can generate passive income for those who do not want to get involved in running them.
Other forms of Investments
I have tried my hands on shares, but you need to be carefully here as well. I tended to sell too early 😁. I get excited once I start to make a little profit and then sell. The advice on buying shares is to be ready to keep calm when the going gets tough. As I am writing this in March 2020, the Coronavirus has just wiped out over $2 trillion off the value of share prices globally. Some companies have lost more than 20% of their share value due to something outside of their control. Of course there is always gold, silver, bitcom, bonds and other forms of investment depending on your appetite for risk.
Please do not forget that houses are also risky and subject to their own fluctuations. Real estates are probably the safest type of investment but you still need to take care to avoid pitfalls, do your research and be ready for the long haul.
You can also own your own business, but even that is not entirely without its own risk with 20% of new businesses folding within the first year.
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