Nathan Long, senior analyst at Hargreaves Lansdown, says pensions are beneficial because the Government tops up any money you pay in, your employer should pay in and your investments are sheltered from tax while being built up.
“Someone with national average earnings of £28,000 every year could expect to build up a pension pot of £416,000 if they save 10% of their salary every month,” he says. “Of this pot, only £129,000 would represent money paid in and £287,000 would be investment growth.”
Invest in something you love – and can potentially make use of.
For example, buy a classic car, maintain it and hope its value rises due to increased demand or a fall in the number of surviving models.
The Historic Automobile Group’s Top 50 Index uses a variety of benchmarks to analyse the global market for rare collectors’ cars.
Over the past decade, it has soared and nosedived due to fluctuating demand for such machinery.
Nobody can consistently predict which asset classes or sectors will perform the best so you can improve your chances of success by diversification.
Don’t have too much money invested in one area in case it underperforms, advises Patrick Connolly, a certified financial planner with Chase de Vere.
“Spread your money across different assets such as equities, fixed interest, commercial property and cash - in the right proportions to meet your objectives and attitude to risk,” he says.
When you’re investing, try to stay calm and rational.
You’ll achieve better long long-term returns by riding out the difficult periods, according to Patrick Connolly, a certified financial planner with Chase de Vere.
“Adopt a long-term strategy and stick to it without being distracted by all of the short-term noise,” he says. “If your investment strategy was right for you before a bout of market volatility, then it’ll probably still be right for you afterwards.”
Your opinion counts. Specialist agencies can pay up to £40 for people to take part in market research panels and token payments for just answering questions.
You can also apply to become a mystery shopper and have the chance to make extra money as well as enjoying benefits such as all-expenses paid meals in restaurants.
Check out www.i-say.com, which gives you points for completing surveys that can be redeemed them for a variety of rewards.
It might sound menacing but the idea is to invest in a business and – hopefully – earn a return when the venture starts making a profit.
The amount you can make will depend on how successful the business and the arrangement you have in place with other partners.
Of course, there are no guarantees. Start-up businesses are notoriously volatile so there is a good chance of losing your money… and the friendship of fellow business partners.
If you love taking photographs, you can register with companies such as www.istockphoto.com and become a contributor.
Your snaps will be seen by more than a million customers and you can earn a basic royalty rate of 15% every time one of them is downloaded – and 20% for videos.
The ideal business is one that works while you’re asleep – and online selling can achieve exactly that with potential customers around the world.
As well as making your products available on established marketplaces such as Ebay, you can also set your own website up cheaply and easily.
For example, www.create.net offer templates and everything you need to get set up and start making sales. How much you earn is then down to you.
You might not want to make it a full or part-time business but selling unwanted items can help bring in the cash.
As well as attending boot sales – and thousands are held every weekend across the country – you can also use free groups on Facebook to advertise your goods. See how our writer got on doing just that.
Buying properties and renting them out was hugely popular but regulatory changes – such as an extra 3% Stamp Duty being payable – have dampened enthusiasm.
The benefits are earning a regular income as well as benefitting in the future should the value of the property rise. However, costs can be prohibitive and the income isn’t guaranteed.
Ian Millward of Candid Financial Advice adds: “There is also a lot of risk in a specific property – especially if it goes unlet or you have a nightmare tenant.”
An increasingly-popular alternative to residential buy-to-let is snapping up a commercial property, such as a shop.
Businesses will generally sign longer leases and take on responsibility for many of the costs normally met by landlords, such as general maintenance.
However, the values of such properties have risen in recent years and you may also face vacant periods with the property being empty for months unless it’s in a popular area.
The taxman allows you to make £7,500 tax-free every year by taking in a lodger at your main residence, under the rent-a-room scheme. You can obviously charge more but any extra income received over this limit must be declared.
Consider your skills. Are you a qualified plumber? Do you have a passion for model making? If so, then consider teaching at an evening class.
The pay can be attractive – £20-an-hour – but bear in mind you only get paid for time spent with students and you will need to prepare for lessons and mark assignments.
Contact your local colleges in the first instance to check out the possibilities.