Investments

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The Most Important Investments to Make In 2021?

Last year marked the beginning of the Covid-19 global pandemic, an event that is still ongoing and has triggered considerable changes in how we go about our lives. The virus has also changed the way we work, spend our money, and how some industries operate. Overall, these modifications have changed the investment opportunities that people have taken advantage of in the past years.

The major shift in lifestyle that the world has experienced in 2020 has led to some of the most lucrative investment opportunities of the last decade. Here is what you need to know when looking to invest money throughout 2021:

Invest in Real Estate and Offer Properties for Rent

The real estate prices in many areas across the country have been drastically reduced. This is a result of indebted individuals being unable to pay their mortgages and looking to sell their home and properties, or losing them to the bank. Regardless of the situation, 2021 may be the best year to purchase real estate and to offer it for rent once the pandemic is under control.

As the infection rates rise and more individuals have their income rates reduced, the price of properties will continue to go down.

It is also important to keep an eye out for office buildings that are for sale. The pandemic has determined many companies to allow their employees to work from home and stop renting office spaces for them. The building that contains these spaces can be quickly transformed into apartment buildings, hostels, or student accommodation.  Most have bathrooms, kitchens, and are structurally sound, reducing the amount of money needed for their transformation.

Invest in a Foreign Cryptocurrency

Although most traditional forms of currency have been unstable since the pandemic has started, cryptocurrency, such as Bitcoin, has been on the rise. The current price of a single Bitcoin is almost £25,000, and it is expected to continue increasing in the coming months.

Most trading platforms allow users to purchase fractions of a bitcoin, which makes the investment opportunity great for all individuals, regardless of income level. Furthermore, keep in mind that this is not the only cryptocurrency that is on the rise. The price of ethereum has been growing at a constant pace since 2021 began and now costs £930.

Ethereum may be the better choice for individuals who have a limited investment budget but want to take advantage of the cryptocurrency increase.

Invest in Ecommerce

One of the most affordable investment opportunities of 2021 is starting an online store. Ecommerce has become extremely profitable as a result of the fact that people are now ordering their products online rather than going out to purchase them in person. Furthermore, starting an online store only requires a domain, a website, and a minimal amount of money to serve as a starting budget for purchases.

Invest in a Local Delivery Company

If you ever have the opportunity to invest in a local delivery company, it is recommended that you do so. The shift in lifestyle that has been triggered by the pandemic has led to more and more people choosing to order products rather than go out and purchase them in person. This has made product delivery businesses extremely profitable, especially in large cities.

This having been said, it is not advised to start a delivery business from the ground up because there are many companies that are already competing with each other and it may be difficult to take a new entry that does not yet have a client base may and make it profitable, especially in densely populated urban areas.

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How to Quickly Improve Your Credit Rating in 2021?

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An individual’s credit score is his financial calling card. It contains detailed information regarding one’s financial habits such as lending, debt repayment, loan stability, utility bill payment, and others. This score increases or is reduced, over time, depending on an individual’s financial decisions, which often makes it difficult to quickly boost. This having been said, doing so is not impossible, but it does require discipline and a bit of planning.

Repay Your Credit Card Debt as Soon as Possible

One of the most important things that you can do to quickly increase your credit score is to repay your credit card debt. For most individuals, the winter holidays are filled with large expenses, from buying Christmas presents to paying for holidays and various creature comforts. Those who do not have the habit of saving money over the course of the year, especially for these purchases, may have been pushed to use their credit cards.

Using your credit cards from time to time will not lower your credit score. However, if you do not repay the debt fast, the score will drop. To increase it, you will have to not necessarily repay all of the debt, but enough to lower your credit utilisation ratio under 25%-30%. If your credit card debt is larger than 30% of the total limit of your credit card, and more than two months pass without repaying it, your credit score will be affected.

Furthermore, if your debt is spread across multiple credit cards, keep in mind that you will have to repay at least a portion of what you owe on each of them.

Open a Savings Account and Make Regular Deposits

Opening a savings account, especially at the start of the year, can have multiple benefits. First of all, it will signal lenders that you are in control of your finances and shows them that you would be able to repay any loan that you apply for. Secondly, it will give you a small financial buffer that you can use, and you will also be paid interest by the bank.

Please keep in mind that you do not have to make large deposits, but you must be consistent. Even if you are only able to deposit £100 per month, it will be enough to increase your credit rating.

Cancel Your Unused Credit Cards

Having more than one credit card can be useful, especially during the holidays, however, if you use them all at the same time, your credit score may be affected. Unfortunately, not using them can also lower your credit score.

If you want to increase it, you will have to repay your credit card debt and cancel most of your credit cards. Keeping one or two will not be a problem, however.

Plan Your Loans at the Beginning of the Year

While it is not a quick method of boosting your credit score, it will enable you to constantly increase it, as you take out loans when you need money and repay them. Look at what your major expenses will be this year and establish how much money you will have to borrow. Once this is done, decide when it will be best to apply for the loans.

This will prevent you from borrowing a lot of money at once or getting multiple loans that you will have to repay simultaneously.

As a reminder, make sure that you pay all of your debt and utility bills on time. Utility companies report their activity to credit agencies, which means that you will be able to build up your credit score by paying your utility bills.

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How to Create an Effective Savings Scheme for Retirement?

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As reliable as the governmental retirement pension may seem to be, its value can still be affected by a multitude of factors, the most important of which are state laws and the state of the national and international economy. This makes it important to have a financial backup for when you retire, and the best course of action is usually to deposit as much money as possible in multiple accounts. Furthermore, it is important to ensure that the accounts are from multinational banks or established private lenders.

Open a Savings Account and Avoid Withdrawing Money from It

Savings account are designed specifically to give individuals a place to keep their money for an extended period. They are extremely affordable and most banks will open and administer them for free provided that the account holder makes regular contributions. Generally speaking, you can access the money in your savings accounts whenever you need to, however, it is better to avoid doing so.

The bank will pay interest to the account owner, depending on the amount of money that has been deposited. While the interest rate alone may not seem like much, the compound interest that can be earned over time makes savings accounts very profitable.

It is not uncommon for individuals to open one or more savings accounts, contribute to them regularly, up to the point where they can live off of the interest rate alone. However, this requires decades of regular contributions are a bit of planning.

Budget Your Income

One of the main issues that some individuals have with savings accounts is the fact that the contributions need to be made every month and they need to be somewhat consistent in terms of value. This can be difficult for those who either have debt that they need to repay, or who have large monthly expenses.

Luckily, these issues can usually be resolved by budgeting one’s income. There are several ways to budget your finances, however, the most efficient one is to create lists that contain essential expenses and creature comforts. The essential expenses cannot be modified, however, should be possible to divert money from creature comforts and optional expenses (Netflix, Hulu, game subscriptions, premium device purchases, etc.) to the savings account deposits.

Doing so will not only enable you to waste less money, but also give you a chance to focus your finances on important things.

Set Up Automatic Deposits

Once you have your budget, consider setting up automatic payments to your savings account. Also, it is better to make the deposits on the same day that you receive your salary, to prevent the money from being used on other things.

These automatic deposits can usually be set up through a smartphone app offered by the bank. Please keep in mind that you may be charged for the money transfers, especially if the account that your salary is paid to is from a bank other than the one that you opened your savings account with.

It May Be Beneficial to Have Two Savings Accounts

Not all banks and lending companies that offer savings accounts are created equal. First of all, each one may offer a different interest rate, which means that is important to look at multiple offers before deciding to open the account.

Secondly, some companies or banks can be more financially stable than others. Starting a retirement fund through a savings account is an endeavour that requires several decades to complete, a time during which a lot can happen. This is why it is usually recommended to open two savings accounts: one with a very stable bank (so that your money will always be safe), and one with a private company that offers a very high interest rate. You should contribute to both of them, however, if the company ever has financial issues, be prepared to transfer all the money to the more stable savings account.

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