minihir blog

Using investment to supplement savings is becoming more widespread. With the world becoming more and more unsure these days, it seems that many more people are interested in building a personal savings to ensure that they have a safety net to protect them should hard times come. For many, wise investments become a major part of this savings safety net… after all, many investments have the ability to yield much more profits than the interest that is accrued from basic savings.
The risk associated with some investments makes many people hesitant to commit their financial futures to them, though. In most cases, however, investment can be a relatively safe and trustworthy way of supplementing basic savings, and smart investment practices combined with patience can reduce most of the risks associated with investing.
A Look at Investments
As a basic definition, investment can be looked at as purchasing something that will hopefully be worth more in the future than what was paid for it. The “something” that is purchased can be something physical, like a collectible or precious metals, or something without a real physical form, like stocks or bonds which may be represented in a physical way by certificates but don’t have a physical manifestation themselves.
Investments that are made to supplement savings use this purchase as a way of setting money aside for later, in the hopes that when the time comes to sell that the value will have increased significantly.
A variety of different types of investments exist, some of which are designed for short term use and others for long term.
Short Term vs. Long Term Investment
The main difference between short term and long term investment is that short term investments are expected to last only for weeks or months, whereas long term investing is expected to last for years. In most cases long term investments will be used with savings more than short term for the simple fact that savings is considered to be a long term idea.
Short term investments can be used with savings, however, especially in cases where the investment is only available for a limited time and a portion of savings is used to invest.
Long term investing is generally done separately from savings, supplementing the money that is saved instead of augmenting it directly.
More types of investments tend to be long term than short term, at least in part to the ability for investment items to continue rising in value as time goes by.
Common Types of Investments
Obviously, a large variety of investments exist… to compile a complete list of investment types would be nearly impossible. Instead, here are some of the most common types of investments that you might wish to use to supplement your savings plans.
First are the two most common investment types, stocks and bonds. Stocks are portions of ownership in companies and businesses, whereas bonds are investments in government-issued certificates.
There are several other types of investments which are traded along with stocks and bonds, such as futures (speculation on the future performance of commodities), indexes (groupings of commodities and traded items), and sectors broad groupings of industries.
All of these types of investments are traded on the stock market; there are, of course, other types of investments that aren’t.
These include private collections (such as rare dolls, stamps, coins, or other items), precious metals (usually presented in bars or coins), and even foreign currencies which are exchanged at one rate, and then exchanged back after values have increased.
Still other forms of investment exist, but they tend to get much more complicated than the scope of this article.

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The spate of credit card offers and leaflets that most of us receive through the post or in our daily newspapers, which promise us unlimited spending power and in some cases blank cheques, has threw up a major surprise and that is the way that small businesses are using personal credit cards that you or I use for granted in our daily personal use, to finance their business practices.
Many are doing this to the tune of almost 2 Billion a month and this is not getting spent on business expenses that they can claim back from the company coffers. The biggest uses are travel or entertainment. The personal credit cards are being used to fund the workings of the everyday running of the business and in some cases the company car is being charged to the credit card.
This has all come about because of the easy access to credit card lenders funds, which are put under our noses at every turn. You cannot even go to a supermarket or shopping mall without being accosted by some credit card sales representative offering you the chance of spending someone else’s cash.
So all in all it is hardly surprising that many people who either have to fund a small business or wish to start one, would feel this to be an easier road to go down, rather than sitting in front of the local friendly neighbourhood bank manager and having to explain all the little details on why you need a loan, while asking you to offer up guarantees. The guarantees enable them to be able to get their cash back and this could mean putting your home up as collateral if it all backfires.
Useful contacts:
Debt Advice - http://www.adviceguide.org.uk
Credit Card Advice - http://www.creditcards-gb.co.uk
So all of this makes the applying for the credit cards the easy option, as it quite easy to apply to credit cards and see yourself with a spending power of thousands and thousands of pounds with an amount as much as 50,000 easily attainable. So much easier than applying to the bank for this amount of backing! There a simple reason for this and that is that the bank, even if you think that they are killing your business plan, have to look at all the pros and cons to your claim and will access things that may even go wrong that you have not even considered or put into your business plan, before they will loosen the purse strings.
By doing this, the banks are also protecting you, yep that’s right protecting you from any irresponsible borrowing that may lead to you falling into a debt that you simply cannot find away out of. By going to the bank, you will be protecting yourself personally and if you are going the way of a limited company, with the assets of the business alone being the sole contributor of any debts owed, where as if you go down the personal credit card route, you will in no doubt find that a couple of big burly bailiffs, will come a Knocking at your door and start taking stock of you and your families belongings and that would be a tad more harder to take than a NO from your bank manager.

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