Making your money work can be an exciting prospect and it's very tempting to dive right in with the cool stuff - stocks and shares, futures, bonds and so forth.
But often the basics can be forgotten! A SOUND FOUNDATION, to use a well worn metaphor, is what I always want as a starting point .. trouble is this can be the boring bit, in my view essential though, your hard earned money can work for you and work very hard indeed, keep it simple to start though - there is plenty of time to play later.
We are lucky here in the UK as we have a great starting point ... National Savings & Investments, these are backed by HM Treasury, which means savings are 100% secure.
Premium Bonds are a great starting point, I've always been fond of them due to a fifty pound win aged seventeen!
Premium Bonds work this way - you can purchase them in hundred pound blocks and you must be over the age of sixteen. The maximum holding is 30,000 pounds. Each Premium Bond is worth one pound.
They pay no interest directly, however there is a prize draw every month, where the famous Ernie - an anachronism for Electronic Random Number Indicator Equipment, selects actual bond numbers and allocates prizes to them, prizes range from fifty to one million pounds.
The odds of winning as per September 2005 are 24,000 to 1, which translated into cash terms means that on average you will earn 2.4% interest.
However this interest is tax free which is not such a big deal on a fifty pound win but if you were to hit the jackpot million pounds then not paying tax would be handy.
You can cash in your bonds for face value at any time, which means you will always get your money back!!