8th February 2016
The Chinese believe that the start of a new year is a time to put your financial house in order by settling any outstanding debts or it will bring you misfortune. A new year is always a good time to assess your financial goals and at Crowd2Fund we believe that alternative investments could help you reach your goals sooner.
Here are a few tips to get you started:
- Set financial goals
In the year of the monkey, you may have aspirations to save up for a new home, car or that once in a life time holiday. Set yourself realistic financial goals that will allow you to save up. Start by paying off any outstanding debts and setting saving targets to give you the capital to start investing.
- Make your savings work harder
Consider alternative ways to grow your savings with Crowd2Fund. Unlike savings in a bank account, money invested in growing business could potentially earn you between 7-10% APR meaning you could reach those financial goals sooner. Every investment on the Crowd2Fund platform also yields a non-financial reward. For example, Ruroc, a leading extreme sports and snow brand, rewarded investors with one of their signature ski helmets with a value of £250, for every £1000 invested, along with a 10% APR monthly loan repayments.
From April 2016, crowdfunding investments will become eligible for the Innovative Finance ISA, meaning you can shelter up to £15,240 of your Crowd2Fund earnings from tax.
- Spread your risk
You should spread your investment across products, borrower risk, sector, and even platforms. ‘More risk, more return’ is a common saying, but it is not worth taking high risk if you are not spreading that risk.
- Monitor and grow your portfolio
As you become more sophisticated with your crowdfunding investments, you may want to sell off part of your portfolio via The Exchange or diversify your investments in order to improve your earnings.
- Take advantage of tax schemes such as SEIS and the Innovative Finance ISA
There are lots of government incentives for investing and lending directly into UK businesses. You should look into the Seed Enterprise Investment scheme where you may be able to claim some of your investment back from the government. The new Innovative Finance ISA may also offer you potential savings.
Risk warning:
You must always consult your tax advisor before making an investment on Crowd2Fund and the amount you can claim depends on your individual circumstances. A Crowd2Fund account is different to a savings account as you are not protected by the Financial Services Compensation Scheme so your capital is at risk, but stand to potentially make significant gains for this risk.
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