Buying gold stocks how to invest when you dont have enough for a house deposit

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THEY say in order to make money you need to spend it.

But what do you do if you actually dont have much or anything to start with in the first place?

You can either save like mad and stick it in a savings account, hope you win the lotto, or you can get smart and invest wisely according to financial experts.

Lets face it while some savings is always great, unless youre buying a car or going on a holiday $5000, $10,000 or even $20,000 wont get you very far.

And you can forget about investing in a home because in most capital cities this amount wont cover the stamp duty.

The good news is whether youre renting out a room to boost your coffers or investing in stocks to sell for profit later theres always a way to generate some extra cash.

You just need to know how.

News.com.au contacted the people in the know about how to invest when you dont have a lot of money and heres what they had to say.

STARTING FROM SOMETHING

Those savers who might have a little more cash at their disposal have plenty of ways to increase your savings.

Depending on how long you invest for or how you go about it, the rewards can be enormous.

You can either take the low risk or the higher risk road, but either way it pays to do your homework first.

HIGH INTEREST/TERM DEPOSIT SAVINGS ACCOUNTS

For savers wanting a low risk option this is your best bet of a return on your investment with the average maximum savings account rate being three per cent, based on a $5000 balance.

The average 90-day term deposit rate is 2.38 per cent for a $50,000 balance.

However according to finder.com.au spokeswoman Bessie Hassan it helps to shop around for the best deal.

She also warns there is a downside to playing it safe as low risk often means low rewards.

Some people are cashing in on honeymoon introductory rates on savings accounts by switching to a new account once the introductory period expires, she told news.com.au.

However you should be careful if youre thinking about pursuing this strategy. Make sure you check the amount that the maximum rate applies to as it may only be offered on balances of up to $250,000.

INVESTMENT/INDEX FUNDS

Weve all heard of the phrase playing the stock market, but unless youre a broker youre better off to leave it to those who know best.

According to Founder and CEO of Stockspot Chris Brycki many frustrated savers trying to crack into the property market look to index funds as a way of growing their wealth.

He said the major advantage of index funds was that investors could diversify in a range of assets rather than just stick all their eggs in one basket.

The days of investing in just one big company is a little outdated, he told news.com.au.

Instead, by investing in lots of different assets the risk is spread (of loss) so you have a greater return in the long run.

Mr Brycki said people could start with as little as $2000 and, like a regular bank account, can add to it each month.

However, he said investors shouldnt expect a quick return and realistically should look at least a three-year plan to grow their returns.

Obviously any investment has some risk, with a bank account youre guaranteed at least two per cent for example so thats less risk, the former trader said.

But by diversifying youre spreading that risk over say shares, stocks, bonds or gold so if one goes down chances are the others go up.

GOLD/PRECIOUS METALS

ABC Bullion chief economist Jordan Eliseo reckons when it comes to making money, people who choose to invest in gold and precious metals are making a smart move.

Mr Eliseo said leaving money sitting in a savings account was a waste especially when interest rates were at record low levels.

He said not only did gold offer strong returns, but people didnt need as much money as they think when it came to investing.

Over the last 15 years, Australians would have been much better saving in gold rather than a bank account, he said.

While cash rates have persistently declined, gold prices have been rising by more than eight per cent per annum, something that is set to happen again in 2016.

Gold is also really easy to buy, with the ABC Bullion Gold Saver for example allowing any Australian to build their savings in gold with as little as $50 a month.

Its set up as direct debit plan, so its a very easy way to build savings in something that has traditionally risen a lot further than cash, and has also done better than shares and even property over the last 15 years.

SUPER

Adam Gee, Chief Executive Officer at SuperRatings said the major advantage of investing in super were the tax benefits that came with this long-term asset.

The key thing is the tax concessions as well as the income youll earn with a super fund, he said.

Super is taxed at a rate of 15 per cent and it tends to be much lower once the fund has claimed deductions which effectively means youre only paying around eight per cent on this investment, he said.

Mr Gee said tax paid on other investments could often be much higher.

He said with the average return of a seven per cent per year investing in super offered a better return than just leaving your spare cash sitting in a standard savings account.

Of course you cant access your super until later but the interest earned over say 40 years is enormous, he said.

STARTING FROM SCRATCH

But what if you dont actually have any money to start with or not enough to do much with?

Every investment needs at least a small amount of cash to start with and theres a few ways you can easily turn no money into something a lot more.

And more often than not it requires little effort and you can pretty much use what you already have.

RENTING A ROOM

A recent study by financial comparison site finder.com.au found that there are seven million spare bedrooms across the nation which represents $1.4 billion in untapped real estate.

With around 85 per cent of owner-occupied properties and 60 per cent of rental properties having bedrooms sitting idle, this is a golden opportunity to up the coffers.

Renting out a spare bedroom is an easy way to give your bank account a monthly $808.24 boost which can help you pay down your mortgage or personal debt, finder research reveals.

But make sure you level it with your accountant as you can claim a tax deduction.

RENTING A GARAGE

It seems rooms arent the only things going to waste when it comes to making money if you have one going spare hire it out.

With the average cost of renting a short-term car park in Sydney costing around $361.26 per month it is easy money to make and invest elsewhere.

According to finder.com.au many investors are now purchasing car spaces and renting them out

With a low initial outlay, a car space can potentially provide investors with a high yield. As an estimate, some users are willing to pay $70 per day for a sought-after car space, Ms Hassan said.