How to invest wisely and maximise your returns

If you’re going to put your money away, at least make it work for you.

By Craig Falck for Africa Report
Photograph: © Skypixel | Dreamstime.com

When it comes to investing your money, you’re not always guaranteed a positive return. In some instances, you might lose it all. However, if you take care and do your research, you’ll find that you can make your money work while it’s invested. Here are a couple of ways to invest wisely and maximise your returns…

Retail savings bonds are a fabulous opportunity for you to invest your money over a number of periods (3 months, 6 months, a year, three years and five years), choose your interest payment method (monthly, annually or accumulated at the end of the investment period) and still come out tops. South Africa has the Government Retail Savings bonds at the Post Office, which has for a number of years guaranteed more than 8 percent interest on your investment. That’s a lot more than you’d received from most banking institutions, and since it’s a guaranteed return, you can rest easy knowing that your money is safe.

The stock market has for years been a place where billions can be made and lost in the blink of an eye, and that’s why it’s always spoken about with care – you never know when you’re going to be bitten by it. However, if you do your research and also speak to people who know what they’re talking about (and have a proven track record), you could find yourself making some serious cash with little investment. Obviously, you need to keep an eye on the markets because things can change in minutes and you could find yourself tapped out. Just be smart and think things through before investing in just any stock.

Another great area for investment is property and buildings. People and businesses are always looking for accommodation and offices to rent, so getting into buying property is a great way to invest and make money at the same time. You’d be surprised how much people and businesses will pay to rent the right property, and you’d also be surprised how many of them are interested in long-term leases. There’s no such thing as one-year leases anymore… nowadays businesses rent for periods of 5 and 10 years and don’t bat an eyelid at the annual increases stipulated in the lease agreements. What you can do is buy the property with a loan and set a rental that will cover the bond repayment, all rates and taxes and levy amounts, and still have some left over to save. At the end of the lease, you might find that you now have a fully paid-off property and you’ve actually spent very little investing in it.

Lastly, and on a more general term, invest money in something that you’re passionate about. Look at industries that you have always been interested in, love knowing about or working in and will have that drive for many more years to come. Even better, open your own business in these industries and give yourself a new lease on business life. That way, the sky is the limit and you’re the driving force. If you love something enough (and put enough of your own money into it), you’ll be pretty motivated to make a success of it.

Investing your money isn’t something that you should have blind faith with. Even the world’s richest men, who can afford to literally burn millions every day and still have billions left, do their research and take a lot of time to decide where to spend their money. That’s because very little in life is guaranteed, and the only way to get ahead is to know all there is to know about something before pulling out your cheque book.