If your aspirations for 2021 include improving your financial situation, you might be unsure about exactly how you could do it without putting yourself under excessive strain.
Whether you are hoping to add to your retirement savings, buy a house or, indeed, do anything else that calls for further financial takings, here are four ways you could go about getting them in 2021. In any case, though, you mustn’t underestimate the importance of diligent planning.
Spend more time working
This is, of course, an obvious – and thoroughly tried-and-tested – way of earning more money. However, as there is only so much time in the day, you should think carefully about the nature of the work you undertake, not just how much time you spend on it.
As a general rule, the rarer and more in-demand your skills are, the more money you can get for them. A surgeon, for example, can often command a higher salary than a retail store worker.
Lend money and earn interest on it
Here’s a basic overview of how this strategy can work. If a property development company needs funding for their next project, you could lend them money in the form of a loan. That loan could charge the recipient a certain yearly percentage of interest subsequently passed onto you.
While you could lend money through using Cash and Stocks and Shares ISAs, you can benefit from even higher interest rates when you opt instead for Innovative Finance ISAs (IFISAs).
Make dividend income from a business in which you have a share
When you buy a stake in a company, you can look forward to regularly receiving a cut of its profits. Here’s how it works: if you own 25% of a company and it generates revenue of £1,000 on costs of £500, resulting in a profit of £500, you would be entitled to £125 – a quarter – of this profit.
Ideally, the business will be one that makes more money every year, adding up to an increased profit – and, consequently, a higher return for you.
Sell an investment or asset to make capital gains income
You would generate this kind of income from buying a particular investment or asset before selling it for a price higher than what you paid for it yourself.
So, looking back at the example of the previously-mentioned company, if you spent £1,000 on your 25% stake in it and then sold that stake for £4,000, your profit in this case would be £3,000. This difference between the buying and selling price would be your capital gain.
While you could naturally benefit from pursuing all of these income-generating strategies, focusing particularly on dividend, interest and capital gains income can prove especially time-effective in the long run. If you are wondering how you can make an investment portfolio work for you, feel free to phone 0207 096 0125 or email firstname.lastname@example.org for our expert advice.