Metals and ISA's

A few blogs ago I mentioned that I will be splitting my savings between holding cash and using the remainder to park it in a place where the return is better. I was also troubled by the paltry interest rates that are being offered [money that is paid to you on top of your money as a reward for leaving it in a particular account]. My searches took me through the world of ISA's, which are a fundamental for any saver, and the world of metals.

Precious Metals

I have learnt about the opportunity to build a financial foundation with gold and especially silver, which is a bargain at today’s prices. Major institutions advise that an individual should hold a certain percentage of their wealth in precious metals (Gold, Silver etc) so I’m happy feeling that I’m on the right track. At least for the moment, I’m interested in being boring and using it for security rather than trying to trade it and make profits going in and out, so I opened up an account on www.goldmoney.com, which allows you to simply open an account for free and buy as little or as much as you like. Seeing as I’m practically broke at this point in time, its brilliant for me because it allows me to slowly build up my holdings by buying a small amount each month.

Gold and silver are classified as real money, rather than the paper notes we carry around which are becoming more worthless as the government continues to print more of it.

Although Gold is very much the rage and still a bargain even at today’s high prices, silver is particularly special, simply because in addition to being classified as real money, it also has many other uses. It is currently consumed in mobile phones, light switches, utlilized in water purification, pharmaceuticals etc. Perhaps the greatest pull is the fact that there isn’t a huge amount of new silver being found which means that it is becoming rare. Economics 101 teaches that when supply is low and demand is high, costs increase.  As I write 1oz of Silver is in the $20’s, and will definitely go up as the public begins to cotton on to how much of a bargain it is at today’s prices.

In a grossly oversimplified way, as long as inflation continues to rise, the government prints more  money, as they did a few days ago,  and interest rates are NOT increased, gold and silver are an absolute safe haven.

An excellent book to have a look at in order to gain a much more in-depth understanding of the history of precious metals and how to utilise them to reach yell0brickrd and beyond is Rich Dad's Advisors: Guide to Investing In Gold and Silver: Protect Your Financial Future by Michael Maloney. As mentioned before, being equipped with adequate knowledge is an essential requirement in the rich toolbox.

With a few key pieces of knowledge it is practically impossible for your initial investment to go to zero and possible for you to get maximum returns on investment and, in some cases, build wealth extremely quickly. Once I have enough liquid cash in hand the majority of my ‘savings’ will be going straight into metals. In the interim however, as mentioned before, my savings are being split 50/50.

ISA’s

In the simplest sense, an ISA, which stands for ‘Individual Savings Account’, is a wonderful place to save your money because the interest rate paid on the account is applied free of any taxes. Normal savings accounts are taxed and why on earth would anybody be happy to accept that? As if being taxed on wages isn't bad enough!! Every single person who qualifies for an ISA should take advantage of it seeing as it’s practically one of very few things available to help you build wealth tax free.

Each year, the government provides you with a new allowance which spells out the maximum amount you are allowed to put in. As I write, interest rates on any kind of savings account are not high; however with an ISA returns are certainly better than parking it in a savings account and praying that my financial base grows sturdy.

Below are a few websites which provide comparison details on various ISA's and their interest rates:

www.lovemoney.com
www.moneysupermarket.com
www.thisismoney.co.uk

I used a few of these sites to make my decision on which ISA I wanted to use. Naturally I went for the one with the highest interest rate!! Using these sites gives you access to a much wider section of the market, giving you a greater chance of finding the best deal out there.

In short, I am analyzing the best ways to increase my wealth and achieve good returns, even on a basic plan for security. Perhaps this plan will work for me and perhaps I may change or alter it in a few months time. At every level however returns must be attractive in order to decrease the amount of time it will take to reach yell0brickrd.

How about you, do you have any other ideas for ways in which to achieve financial security? Leave your thoughts below!