Savings & Investments: When To Cash In!
Put something by for a rainy day is a phrase everyone is accustomed to hearing, but what is a rainy day, how rainy does it need to be to cash in on those savings? What about other investments that are not for a rainy day as such but are for ‘the future’, when is far enough down the line to start using some of these reserves? Let’s take a look at some of the types of savings and investments you might have and what best practice is for them.
If you have regular savings in an account and wonder when is best to cash in on them then it’s a very legitimate question as regular savings accounts don’t offer very competitive interest rates so it’s good advice to not keep a high balance for very long in such accounts. Either move them into another investment vehicle or use the funds for something.
If you are holding shares in companies when to sell is an extremely difficult decision to make a lot of the time, how to tell whether or not now is the right time can be nearly impossible at times as, let’s be honest, none of us can tell the future. But there are a few things to consider, what changes have made a price surge up or down can be studies and is it likely to be temporary, is the company failing (if so sell before it drops further) and if it is surging you should be aware that if it’s a good price for you and you’re waiting for more then that’s your risk and you should consider a profit a profit.
Your house is most often the largest asset you will ever own and the downside is that although it’s extremely valuable on paper you have to live in it so it’s wealth in name only in that way. You could consider downsizing if that works for you but then you need to carefully consider why you would do this and if it will work for you? You can though release equity in the property without selling up and it’s easy to check that with a free equity release calculator.
A pension is another asset you have that is tied up until retirement and choosing when to retire or when to start drawing a pension can be a difficult decision to make. If you choose early retirement it’s true you can take some pensions early but you’ve also got to consider that a pension is an investment and has limited returns so if you spread it over too many years you may end up with less per month than you can afford to live on.
Sometimes you have a huge amount of assets just sitting about in your house and don’t even realise it, you could have piles of old books or vinyl records and it’s surprising how much some of these can be worth if it’s an early or rare edition and it’s remarkably easy to sell these things and turn them into cash.