Investing your money is the best way to get the highest returns, but it’s also the riskiest. If you want to build up your personal capital but you’re starting at the economy end of the scale, investing in stocks and shares might be too risky for you. The golden rule of stock market investments is never to put in more than you can stand to lose, so risking everything you have on traditional investments could be a gamble you don’t want to take.


If you can’t afford to risk losing your money, how can you grow what you have without taking any chances? There are several options that are worth considering:

  1. Debt management. If you have any debts, however small, ticking away in the background, you should use your cash to clear them before considering any other actions. There are occasionally ways you can make more from savings than you’d spend on interest accrued on a debt, but they are few and far between. Far better to clear off what you owe and build up your credit score in the process than start building up your nest egg.
  2. The easiest way to put money aside is to put it into a savings account, but it also has one of the lowest return rates on offer. If you want to opt for savings, find out about accounts that pay higher rates of interest for a restricted notice account rather than sticking with a standard savings account at a very low-interest rate.
  3. Do you have a pension scheme set up yet? The younger you are when you start paying into a pension, the more you will save, ensuring you have a comfortable retirement when the time comes. The world of pensions can be somewhat complex, so talk to a pensions advisor to find the best scheme for your situation.
  4. Most insurances cost you a premium annually or monthly, which covers you should anything happen to your pets, your home, your car, etc. In some senses insurance is a wise investment, because you could lose your entire savings overnight if you don’t have adequate insurance and something goes wrong. On the other hand, you could argue that you might never have to make a claim, in which case all those years of paying won’t have achieved anything, except perhaps given you peace of mind. You’ll have to weigh up which argument you think is more convincing for these types of insurance.
  5. Life insurance. Life insurance can offer a different kind of cover, as, with permanent policies, you not only cover yourself if you die or can’t work, but you’ll also be building up for a long-term pay out when the policy matures. It’s a popular way of investing for later life and retirement without risking losing the money you put in. You’ll need to research which type of policy is best for you, and compare the cost of life insurance with a specialist comparison site like Insurance Geek.

If you’re careful with your money, over time, it will build up to a point where you’ll be able to start putting some of it into the higher risk investments, but if you’re on a budget, make sure you start off slowly and build up gradually.