With the £2.73 Club we cover several types of Cash Investing - Peer-2-Peer Lending, Bullion Investing and Treasury Bonds are the most common. All offer a wide scope of investment opportunities and are cheap ways to start investing with very little cash.
Peer-2-Peer Lending (P2P)
You can become a Peer-2-Peer lender with just £10 (ten pounds). There are lots of different platforms available for you to choose for investing.
How P2P works is a borrower wants £1000 loan to purchase a car, for example, so your £10 is added to other investors £10 until the balance of £1000 is achiever (100 investors) then the money is given to the borrower. Each month the borrower will repay interest and part of the capital. This is ten evenly distributed between the 100 borrowers. This is repeated every month until the loan is repaid in full.
In the UK, most P2P platforms will only allow £10 per investment. This is to protect the investor should a loan default then the investor has a maximum of just £10 at risk.
Peer-2-Peer Lending allows the investor to start investing with very little cash. It is then built up over a period of time.
The Government needs cash to run the country. They can borrow it from the money markets or they can borrow it from smaller investors. Treasury Bonds start at £500 and you receive interest on the money you lend to the government. There are different products available which offer fixed terms with interest added at the end of the term or monthly income where you receive your interest each month at a set time.
The government will guarantee that you receive the full amount of your investment back plus interest for investments up to £1,000,000 (one million pounds).
Bullion is used as an investment to protect your capital against downward trends. When the economy has problems Gold and Silver Bullion are seen as a safe haven especially as it tends to go up in value.
Gold - can be bought in bars and coins. A 1g bar starts at around £50
Silver - can also be bought in bars and coins. The one troy ounce silver coin tends to be the more favoured way to start investing for beginners. A coin can be purchased for around £20
There are other commodities investments such as Copper, Lead, Tin, Platinum and Palladium which all react differently to the markets and are good investments for those conditions.