Why Investing is one of the best ways to save for your child’s future

(Guest Post) It’s a tricky time for money management. With a new national lockdown and COVID-19 already costing thousands of jobs, you may be worried about what the financial future holds for you and your family. 

Modern apartment building with brick walls from Pexels

Whether you’re a stay at home parent, a single parent or even if both parents work, it can be a challenge to balance finances and make ends meet. From nappies to packed lunches, clothes to school trips, costs can quickly start stacking up and it can become a lot to deal with. But fortunately, there are ways to help these costs.

If you’ve ever wanted an extra form of income or have wanted to secure savings for your family’s future (who hasn’t?), chances are you have already considered investing. But with a range of investment opportunities to choose from, it can be quite overwhelming to know where to start and decide which option is right for you.  

Is the stock market right for you?

For starters, I imagine if you have considered investing, the stock market has probably been one of your first choices. 

Stocks, or equities, provide you with the opportunity to own a small piece of a company. You can buy multiple shares, with each wildly differing in price dependent on how big the company is. From bank HSBC to Tesco, shares can be bought and sold on stock exchanges, with plenty of opportunities to make money depending on how much you are willing to spend.

But, while some serious money can be made on the exchange, prices can fluctuate constantly, making it a hassle to know when the right time is to buy and sell your stocks. It means in the short term; you could easily lose out on money if you make a wrong decision.

Buy to let investment can be more secure

For many, the stock market can seem wildly inaccessible and if the idea of buying shares makes you nervous, there are some much more secure and reliable forms of investment.

One of these forms is investing in buy to let property. For beginners, buy to let refers to buying a property with the purpose of renting it out to a tenant. While being a landlord may be daunting, the property market is can be an excellent way to make regular money securely. 

The UK rental market is currently booming. After an initial 55% dip in demand for rented homes at the start of lockdown back in March, the market saw an instant recovery with a 30% surge in the first two weeks of April, according to Zoopla. 

All living trends point to renting overtaking house ownership in the UK. There are an estimated five million households in the UK already renting, offering a massive opportunity to get started and make money.

And if that wasn’t convincing enough, you can be far more secure and confident in your investment, with house prices set to continue to climb by a staggering 20.4% over the next four years according to Savills’ five-year house price forecast. 

How to get started in property investment?

But where to start? For beginners it might be hard to know exactly how to get involved in UK property investment. What area should I invest in? What is a good price for a house? What even is a rental yield?

For starters, the North West property market is thriving at the moment and is thought to be a smart place to invest to maximise returns. Liverpool currently sits at the top of the pile with rental yields of up to 11%.

In a nutshell, rental yield is the percentage of return on investment you receive through rental income. In general, anything above 5 or 6% is considered good, making 11% an exceptional return. If rental yield is still confusing or you want to learn more, be sure to check out RWinvest's ultimate guide.

Overall, now seems to be an excellent time to get involved in property investment, particularly in the North West. Despite the uncertain future from lockdown, there is an excellent opportunity to create an extra income source and provide a low risk secure financial future for your family.  

***Disclosure: this post is not designed to take the place of expert financial advice. All investments can go down in value as well as up. You should think carefully before making any investments***

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