Today, an increasing number of people are starting to realise the importance of managing their finances. Especially after the 2008 meltdown, most people are careful about where and how they spend their money. No financial discussion, however, is complete without considering the different investment options that are available today. A financial investment is something that requires an initial purchase or a monetary deposit with the understanding that it will appreciate in value and give you return benefits. Since investments can potentially fetch you higher returns than regular bank interests, it is considered a wise move to invest a part of your income rather than saving all of it. Buying stocks, real estate and gold are the conventional ways of investing. Today, there are also a number of non-traditional options like renewable energy investment, teak investment, SIPP investment and Brazil social housing investment.
Investing in Forestry
Putting your money in forestry is a newer form of investment, but is fast becoming popular. It involves investing in commercially managed timber forests, and is popular for many reasons. For one, the returns it fetches have been reported to be almost 10% higher than traditional investment options. Secondly, investing in a commercially managed forest makes you eligible for certain tax breaks and exemptions. Though this differs from country to country, this is a significant point that needs to be considered. Thirdly, properly managed lands provide significant environmental and ethical benefits. Sustainable practices go a long way in preventing deforestation, combating greenhouse effect and climate change, and facilitating biodiversity. However, it is always advisable to research your options before going for a forestry investment. As with anything else, ensure that the forest plot you’re investing in is genuine, registered and- if you’re looking for tax breaks- commercially managed. Estimate how much you’re willing to invest, whether you want to buy the entire forest land or some shares in it. The quality of timber, the location of the plot and the condition of the market are factors that determine how much return the investment will fetch. Also, remember that this is a long-term investment, so don’t expect to see results within a couple of months. However, if these factors are kept in mind, forestry investment can be a smart, resourceful way of making profits.
Other Smart Investments
There are two other forms of investment options that you can consider depending on what your aims are. Those looking for a comparatively low-risk proposition can go for renewable energy investment. Initially, this saw a slow growth because it required large capitals, and thus proved to be too expensive for many. But now that these costs have seen a sharp drop, people are starting to realise the benefits of investing in this vertical. Renewable energy resources encourage sustainable development. In the modern context, where green practices are highly valued, not only is this an ethical option but is also a smart financial move. In many cases, the government offers a lot of tax benefits for people investing in here. Additionally, it allows you to invest only as much as you’re comfortable with- and do it the way you want. For instance, you can opt for bonds which give you low returns but are almost risk-free. Or you can go all out and invest in your own venture and stand to make heavy profits. People who are more experienced and ambitious might want to go for an oil-drilling investment. This is a high-risk proposition but the profits are also rewarding. This offers some fantastic tax break opportunities as well- tangible and intangible cost deductions, depletion allowances and lease cost deductions are some good examples of how oil-drilling investments can prove to be beneficial. Mutual funds and such lower-risk options in oil investments, however, will not come with these tax benefits.
So, though no investment is completely risk-free of “fail-proof”, you do have the option to pick and choose where you put your money. A little research and a bit of caution can go a long way in helping you make profits from your investments.
Nigel Walters is an experienced blogger whose main interests are investment, stocks and property market, he loves trying to help/ guide people in the right direction with his writing and would one day like his own consulting company, at the moment he writes for property and investment companies such as Emerald Knight Consultants.
