What To Invest In Right Now If You Have A Capital of Hundred Thousand?
What to invest in right now if you have about £100,000 of capital? We have scanned the market and asked some experts, giving them such questions as “What would you personally invest free 100k in?” and “The best way to invest 100k at this very moment.” The answers widely range – no wonder, as closing and opening markets constantly take from or add to the existing opportunities.
In this article, we’re only speaking of how to invest 100k to gain capital returns, not spending them on trifles like traveling to a remote part of the world for personal fun and joy. Also, you should understand that a hundred K will make your investment strategy completely different from what you would have if you had 1 million or 1 thousand.
What to do with 100k?
We are exploring all options that local and international markets provide at this very same moment.
- Real estate.
Those investing in real estate today nearly all over throughout the world have their capitals growing. The most interesting markets in terms of margins are ones in the developing countries like Ukraine, Poland, Bosnia and Herzegovina, Montenegro, Serbia, Romania, Bulgaria, Czech Republic, or Hungary. Also, the US is showing a nice raise in the cost of both types of property (commercial and private households). Experts from the Bailard Wealth Management tell their clients who invest in real estate through ETF, EWRE, and REIT, make around 10-15% annual. The core strategy today is to look for such funds, which have a highly diversified international portfolio, which includes all segments of property on at least two non-conjoined continents. Remember that most such funds have operating and entrance fees, which range anything in between 0.40% and 3% gross annually (from the sum of investment).
- Hedge funds, a.k.a. “funds of funds”.
Many reliable companies managing such funds have originated decades ago. Some are as old as centuries (for instance, companies managing the Rockefellers’ or Rothschilds’ wealth). For instance, the Millennium USA HedgeFocus Fund, one of our recommendations, has been operating since 1990, giving its clients steady returns thanks to its quite conservative investment portfolio. If you’re looking for solid yearly returns of 3-5% and don’t want to hear anything about risking your money, then such an option would be great for you.
What do you have to expect when looking for such funds to find the best way to invest money in the UK? These are:
- Proven history of nice yearly returns in most of the years of their existence (over 90% of all time), without sharp deteriorations in annual returns
- At least 2 decades of operation on the market – but the more, the better
- A possibility to receive guaranteed fixed income but with a reserved opportunity to yield more should the fund perform better (but that might draw a riskier approach to your particular investment portfolio and not all hedge funds provide such an option).
Typically, hedge funds have bigger entrance fees and maintenance yearly fees than the ones listed in the previous point. Usually, the price starts at 0.8%. And what you should know is that due to natural factors, such funds tend to fall together with the global economy and rise on par with it. For instance, in 2020, nearly all hedge funds of the world declined, and those promising a fixed income could not keep their word.
- Investments in high-promising areas that evolve rapidly.
Green energy has declined in the past years in the return on investments. Their high-yielding niche is today taken by medical, hi-tech, and biochemical companies and startups. Also, ‘social responsibility’ companies have rapidly developed during 2020 and the trend obviously continues in 2021. Another great option would be high-growing markets of delivery to home and organizing work of offices at home. So buying the shares of such companies is a great idea. But it is highly advisable to do it through funds and companies, which manage their own portfolios of such high-yield companies due to a more balanced approach they offer. The biggest part of this market today is highly volatile and opportunistic, so you are definitely interested in a smoothened approach. The first best investment funds you shall be looking for under this approach are ESG Aware MSCI USA ETF & U.S. Basic Materials ETF. Dozens of others are on the market so do your own research to find more high-yield options. What is good for you here is a relatively low management fee – about 0.2-0.4% annual.
- Healthcare and health insurance areas are on the rise.
There are hundreds of new market players in these booming areas – not only in the US or UK. The primary idea is to invest by buying their shares.
- Buy precious metals.
Namely, Copper and Palladium. Only these two metals add in the price in the course of the last decade. Silver, Gold, and Platinum roll back, actually being one of the worst assets to work with. If you’re interested in profits after 3-5 years, only two named metals would be a good idea (with or without physical delivery). If you don’t opt for physical delivery, your yield will be even higher since you don’t pay fees for transporting or the high commission of a seller.
- Buying shares of huge companies.
Apple, Microsoft, EXXON… There are hundreds of companies with unimaginable market value. You might be earning on their shares by holding them and getting paid yearly dividends. This would be a steady and relatively predictable income. Additional earnings come when you sell those shares after they rise.
But the drawback that you have to be aware of is that some shares cost a lot of money, so you don’t buy many of them for your 100k capital. For instance, you definitely won’t be able to buy even one share of Berkshire Hathaway because it’s over $428,000 as of now. Or you will acquire only 31 shares of Amazon, which today are worth $3,187 each. However, these are rather sound exceptions – the rest of the shares have a much lower cost. For instance, you can buy 682 shares of Apple, which is $146.70 as of now. You have a huge choice: top 100 companies only in the US have over 16 million shares in rotation on the stock market.
Remember about diversification! And don’t forget to play on the stock market, buying and selling in the right moments to gain more wealth.
The best way to invest 100k in property
There are more ways of earning a quick buck from real estate (in addition to investing in various ETFs, EWREs, and REITs). You could become a landlord yourself by buying a particular object of property. Usually, the acquisition is intended for the purpose of letting it for rent, as simply holding a property is a more opportunistic and less obvious income despite the fact that markets are rising. You can own rental property and have monthly cash flow, which potentially can cover the bank financing expenses and leave you some money to accumulate or reinvest. But your financial management has to be wise. We have a large series of articles about landlord opportunities, drawbacks, incomes, calculations, and tax returns. Read them to get into bigger detail before you actually adopt a decision to become a landlord.
Another way for dealing with a property is flipping. But it is a good option only for those investors who are good at rehabbing/renovating a property with their hands or have a dedicated team of workers. You can hire them as paid professionals or have them as co-owners of your business – each business model deserves its own attention and it’s actually so full of nuances that flipping is a theme for a story of its own. The process, in general, is as such: you buy some undervalued and/or bad-conditioned property that requires extensive renovation. You rehab it to give a completely new look to arouse a desire in people to buy it. Later, you sell it for profit. Thousands of people (if not more) in the UK alone do it for a living. Again, you have to be really keen on working with your hands or organizing other people.
All in all, having 100k free money, it is quite possible to work on the markets of the UK and US (not speaking of other, cheaper, countries). There is a plethora of commercial buildings to acquire for renting or flipping. You can even buy some land plots with the potential to resell it in a few years. Surely, you are devoid of some high-cost opportunities like building homes on such a land plot and selling them to buyers. It is a much costlier undertaking than 100k. But nobody prevents you from accumulating bigger capital over the years to start doing so, right?
Conclusion on what to invest in right now
There are many investment opportunities. Some of them require less activity and involvement, some are so demanding that they basically become your second job. Select what is better for you personally and make your money work for you better already today!
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More about DGY
DGY is a real estate investment and property management company. Our experts have an impressive experience in turning businessmen into smart real estate investors. We collect limitless opportunities throughout the world’s best real estate markets and help our clients implement the best deals. We take care of all due diligence and customize documentation while your income grows. We also provide you with property management services so you can forget about the tiresome maintenance of several objects and entrust this process to professionals.
Investment advice and recommendations
DGY is an investment company that takes care of every client and helps them become successful investors. With the help of an investment experience and a well-thought plan, we will help you examine the market, choose a strategy specifically for you or your business, and calculate future costs to start making money with real estate investment.
In order to invest in real estate, you should consider how you will run your management in Ukraine. DGY will help you eliminate all possible pitfalls at an early stage as a personal project manager will be assigned to your case. They will assist you in choosing the project according to all required objectives.
DGY Investments takes care not only of purchasing property but also renovating an existing one. With the help of a thorough plan and estimating, we will thoroughly prepare a property for sale. Our professionals evaluate an investment property and create a strategy that includes the costs for renovation, possible taxes, fluctuations on the market, etc. Therefore, our clients are able to resell the renovated properties in Ukraine with more than 15-20% profit from the initial price.
Before our clients decide to deal with real estate investing, they consult with our experts concerning details such as the necessary documents needed to purchase a property and successfully run all the processes connected to it.
Therefore, if you are eager to invest in Ukraine, it’s essential to have all the paperwork done correctly, and that’s the moment when our team of experts takes care of this step. DGY Investments helps investors buy real estate property, manage the paperwork, start preparing relevant documents for purchasing realty in Ukraine, and close the deal successfully.
Real estate investment opportunities in Ukraine
When an investor decides to invest in real estate in Ukraine, the most affordable way to attain stable passive income is through buying residential real estate. Investors can expect to receive a regular monthly payment from their tenants at a fixed monthly amount, unaffected by inflation or other unforeseen circumstances. The amount of rental income will vary depending on the size, type of property and location. For example, buying an apartment in Ukraine’s capital Kyiv is beneficial to investors due to offering a large working population, central location and affordable prices. Hence, the minimum price of renting a decent one-bedroom apartment in Shevchenkivskyi District will be around $1000 per month in 2021, followed by Pecherskyi District with a cost of $850 per month. Besides, investing in real estate in Ukraine annually brings clever investors up to 15% of yield, attracting many business people every year.
Properties for investments in Ukraine
Ukraine has a giant sector for real estate investing. Businessmen who come there all over the world often choose between investing in residential and commercial properties. The main advantage of buying property in Ukraine is the affordability of prices on the houses and apartments. For instance, if you invest in real estate in a historical district, a luxurious apartment will cost you around $80k only.
How to invest in Ukrainian Real Estate
In order to invest in Ukrainian real estate, you should take into account a list of crucial factors. The first one is to choose what kind of realty you are going to invest in: residential or commercial. It is vital as it should comply with Ukrainian real estate law. The second tip is to identify the purpose of purchase in order to make a strategy for the property. For instance, you may purchase the property for your own use or buy it for lease. The next step is to calculate the taxes and what kinds of taxes are payable during the purchase, owning, or selling. Also, to invest in real estate properly, you should keep in mind currency control rules in Ukraine to sell a property and get a higher profit.