Nowadays, you hardly get any interest on your savings account. Some banks already apply the 0% interest rate or even a negative interest rate on your savings account. With this in mind, have you thought about how to make a higher return on your savings? Or how to use your money to be future proof? Let me share some ideas with you.
1. Invest in gold, silver, platinum, palladium
Investing in gold, silver, platinum and palladium might be a wise long term investment. You have something physical at hand when times get rough (although you can also buy it in funds, so you don’t keep it physically).
With physical gold you have some asset at hand outside the financial system. The price of gold can increase or decrease, but at least you don’t have the risk of a counterparty like a bank. Many people are convinced that the price of gold will increase during financial crisises. We don’t know what the price of gold will do in five or ten years time. But what we do know is that this precious metal has preserved its purchasing power. Besides, central banks choose for stashing up gold in their vaults. About 52% of the yearly gold supply is used up for jewelry, 18% constitutes central banks, 16% take the form of investments and about 12% is used for industrial purposes. The remaining 2% is unaccounted for (Source: Numbersleuth).
Silver is more used for industrial purposes than gold. Therefore the price of it may fluctuate more than that of gold. Since the market for silver is much smaller than the gold market, the price of silver may increase much faster in an upward market.
If you choose a provider to buy gold or silver from in the market, please make sure that the provider is registered at the country’s financial regulatory authority. This way you know that you deal with a legitimate and trusted partner. In the Netherlands, Goudstandaard (www.goudstandaard.com) is such a provider and operates with a license registered under the AFM (Autoriteit Financiele Markten). The website is also in English. They can also offer (for certain types of gold and silver), secure and safe storage in Switzerland.
2. Invest in an entrepreneur
I’m a huge fan of crowdfunding! I have always had a great respect for people with a creative mind and great business ideas. Not all entrepreneurs are entitled for a bank loan or simply don’t want a bank loan, but rather loan from the ‘crowd’. I have invested in various sectors:
- Transport for passengers (9% interest on a 5 year loan);
- Innovative and animal friendly cattle-fodder system (7% interest on a 4 year loan);
- Innovative logistics concept in warehouses for webshops (7% interest on a 5 year loan);
- Hotel rooms (6,7% interest on a 4 year loan);
- Second hand airplane components (8% interest on a 2 year loan).
Be mindful, investing in businesses comes with its own risks. However, by studying their business plans you kind of know where you are getting into. And trust me, you don’t need a lot of money for crowdfunding. Many people just invest 100 euro (about AED 400). Besides, you can actually see what you have invested in. For example: the farmer who invented the innovative and animal-friendly cattle-fodder system, invited his investors to his farm to witness with their own eyes how the system actually works. How great is that!
3. Buy an oldtimer or an original / unique car
The oldtimer market has been booming for the past couple of years, so you can definitely make some returns on that. However, you have to make sure you buy quality and that you are certain of your case. Bring along an expert before you buy a classic car, otherwise it will cost you a lot of money instead of making money on it. Moreover, you will find likeminded people who drive the same and who you can hook up with for driving rally’s.
4. Invest in wine or whisky
People have been drinking wine for thousands of years and it remains an incredibly popular drink. But it appears to be an investment as well. There are various ways to invest in wine. You can look for exclusive wines yourself and sell it at a later stage. Although, just like with cars, you have to have some kind of knowledge about it or have to know someone who has the knowledge and is willing to help you. But wine lovers can also invest their money in a professional wine fund and the selection of wines will be done by professionals who will compile a portfolio of wines for you. Please check the following websites:
– https://www.liv-ex.com/home.do (London International Vintners Exchange (Liv-ex), which holds the most comprehensive price data on almost 100,000 fine wines)
Another alcoholic investment opportunity is whisky. For example, take the World Whisky Index, a website where you can trade in whisky. In recent years demand for exclusive whiskey has increased, especially in Russia, Japan and China. On the website you will find the return on investments per type of whisky. The average revenue per year between 2008-2013 was 15%!Worth it right?
5. Buy a Hermès Birkin and / or Hermès Constance chique designer bag
Good news for the ladies! Please read this article about things you have to keep in mind when buying a Hermès. These bags are scarce and highly in demand.
6. Invest in property
If you have the money, it can be wise to invest it in property. I know of people who have made quite a good return on their investment by buying relatively cheap property due to its material condition at the time of buying, renovate it and sell the property for a good price. Or you can buy property and rent it out.
7. Pay off your mortgage faster
Nobody has a glass bowl to predict the future. What you can do, is prepare yourself in case times get worse. The economy is cyclical so we will always have good times and bad times. Using your savings to pay off your mortgage faster will result in extra money for you. You will decrease your monthly burden. How much depends on the amount of the interest rate on your mortgage. But: paying off your mortgage faster can have its disadvantages. You can’t get to your money that easily since it’s stuck in stones and it depends on your bank how much money you can pay off extra on a yearly basis without paying a fine.
8. Pay off other debts
Credit card debts cost you lots of money on interest. Do you have some money left? Be wise and pay off this kind of debt as soon as possible.
9. Save across Europe
Raisin is a German start-up and a platform for investments throughout Europe. Their goal is to provide you with and give access to exclusive offers from their partner banks all over Europe. In the meantime Raisin has collected > EUR 2 billion of European savings money from more than 60,000 customers. You can visit their website here. But, as always before storing your money at any bank, please do some research on the particular bank.
10. Last but not least…Invest in yourself!
Think about how the workplace looks like these days and compare it with ten years ago. Technology is moving fast and I find it hard sometimes to keep up with all the new technologies and gadgets. Working in the financial sector, I have seen all the technological development in the past decade and how it has impacted the way we work. More and more people only use the online banking platform and its related money apps to control their finances. Who is going to a local bank branch these days? Well, this answer obviously depends on which country you live in. But in the Netherlands thousands and thousands of employees in the financial sector have lost their job or will lose their job in the coming years. This is not only the result of the aftermath of 2008, but also because of the developing technologies.
Now think about yourself. How future proof is your own job and could you be replaced by a robot or an advancing technology? It could be that your job will no longer exist within the next ten years. In that case, invest in a degree and invest in yourself. That way you will make sure that you are future proof as well. Remember, your value on the labour market will be measured against what you have to offer and if you can offer something which others can’t. You have to make yourself more valuable than others. You can do that by investing in a skill set where the market asks for. A good example: I think we all know the difficulties companies face in fulfilling vacancies which require technological skills. Once you have that particular skill set which the majority of the labour force doesn’t have, you will continue to be of great value, in good times and in bad times. Investing in yourself, might be the best investment there is and it will certainly pay off in the future.