Common Investment Options: Pros & Cons

Investment Options

There comes a point in life when your financial future becomes a matter of concern. When you are stable in your finances for the immediate term, you begin to look above and beyond. How will you fund your retirement? How good is a quality of retirement it going to be? How much money are you going to be able to leave to your children?

When you’re trying to answer questions as big as these, it can feel like there are so many choices in front of you that you will never be able to make the right one. That’s why it can be helpful to cut it down to the basics, free of emotion, and just focusing on the facts. With that in mind, let’s keep it simple: what are the pros and cons of the two most common investment options for those with one eye on the future?

Investing In Property

Thousands of people do it every year – do you think the future of your finances lies in good old-fashioned bricks and mortar?

Pros 

  • Relatively little experience needed. If you have ever bought a house for yourself (which it’s safe to assume anyone considering investment choices has), then you’re already familiar with much of the process.
  • Lots of options; you could rent the property out, renovate it, or just sit on it and wait for the market to increase your return on investment.
  • There’s plenty of help available; if you’re looking to sell quickly, then you can enlist a real estate agent to do a lot of the tough, paperwork-heavy work. If you want to rent the property out, then all you need to do is select a property manager  and then let them handle much of the day-to-day running.
  • Stable – there’s something to be said for physical assets, rather than just numbers on a screen.

Cons

  • Can be time-consuming, even if you enlist assistance. 
  • You’re subject to the volatility of house prices, which can be subject to all kinds of seemingly-unrelated financial and economic problems.
  • Competition and demand. Due to the aforementioned pros, you might find plenty of other people have had the same idea as you when it comes to securing their retirement. That means you’re going to be in competition for the best properties when purchasing and willing buyers when you come to sell.
The benefits of investment

Stocks & Shares

This option is probably the best-known method of investing in your financial future, but does that mean it will make sense for you?

Pros

  • Can be lucrative. If you get it right, then you might find that you make more money on the markets than you ever have in your real job.
  • Practice is possible. Before you take the risk with your actual money, you can try your luck and see where your instincts are at with a dummy trading account. It’s worth letting it run for at least six months just to see how you might fare.
  • If you don’t want to play the markets for yourself, there are literally thousands of financial institutions willing to do it for you. You can shop around and see who is offering the best deal, meaning you don’t have to learn any new skills – instead, you can just sit back and count the cash.

Cons

  • If you want to make a lot of money, then you’re going to have to take a lot of risk. While you don’t have to invest a fortune in the markets, you’re not going to make a fortune if you’re not willing to be adventurous.
  • Unreliable. The 21st century has already seen one worldwide economic crash that few people saw coming. If you find your money trapped in the middle of another global spiral, then you could lose everything despite never having done anything wrong.
  • Complicated. If you don’t want to hand over control to another company or hire a financial advisor, then you’re going to have to spend a lot of time learning the tricks of the trade.

If the above options don’t appeal to you, then don’t worry, there’s plenty of other choices. You could consider becoming an angel investor in new businesses, or even dabble in the precious metals market. There are always new investment ideas to consider if you are willing to look for them.

Just be sure that whatever route you decide to pursue, you weigh up the good, the bad, and the ugly of your decision before taking the plunge. There’s always a downside to even the most promising of investment opportunities. To truly protect your financial future, you need to be aware of the potential problems, and still be able to make a cool, calm, and rational choice for you and your family.