Not is the current economic climate volatile, but it has also been defined by a number of worrying macroeconomic trends. The most worrying of these is the growing stagnation of real wage growth, which has reduced the average levels of disposable income in the UK and caused the household savings ratio to decline from 5.3% to 3.3%.
This is extremely worrying, as this will ultimately impact on the confidence of consumers and reduce the amount that they reinvest into the economy. A fundamental lack of savings may also exacerbate future recessions while driving long-term stagnation in the property market.
What Steps Can You Take to Get the Most From Your Disposable Income?
With this in mind, how should you strive to optimize your level of disposable income, and what are the best ways of utilizing this capital and making it go further? Consider the following ideas.
1. Start By Maximising Your Earnings
Before you look to leverage your disposable income and make it work for you, it is important to ensure that you are earning (and saving) as much as you can.
While this may mean cross-referencing your salary with the national average (in relation to the role that you are performing) to ensure that you receiving the right level of compensation, there are other steps that you can take to optimize what you earn. You could look to market a specific skill or area of expertise in your spare-time, for example, working as a freelancer in addition to your day job.
So long as you organize your time well and declare all earnings for the purposes of taxation, you can join a growing marketplace and earn as much as your talent allows.
2. Trade The Financial Markets
Once you have optimized your earnings and increased your monthly level of disposable income, the next step is to identify ways of leveraging this. One of the best methods in the modern age is to trade the financial markets, as the emergence of online trading platforms has broken down many of the barriers to entry that once surrounded assets such as currency, stocks, and indices.
[pullquote]Currency trading represents a particularly lucrative option, so long as you build in-depth knowledge of the forex market and gain practical experience through a demo account prior to making a financial commitment.[/pullquote] The foreign exchange is also viable as it remains an extremely liquid entity and one that allows traders to leverage spread betting and profit in a depreciating market.
Over time, of course, you can look diversify your portfolio and access new markets, but forex provides an ideal starting point for novice investors.
3. Become An Equity Crowdfunder
There are many different types of investment, but your core objective must always be to optimize your returns over time. In this respect, becoming an equity crowdfunder offers an outstanding opportunity to optimize your long-time gains, as it enables you to access unique business ventures at ground level.
Equity crowdfunding also rewards your investment with a fixed share of equity, which is a tangible and secure store of wealth in the modern age. This is an evolution of traditional crowdfunding platforms, which offered no fixed equity share and rewarded investors with novel, but often low value returns.
By leveraging the equity model and carefully selecting viable business opportunities (and preferably one which suits your own life experience and expertise), you can make the most of your disposable income over a sustained period of time.
By following these tips, you can boost your earnings and make your money go further while creating a greater sense of financial security in a difficult economic climate.