Thanks to the economic issues caused by the pandemic, the Bank of England chose to slash the base interest rate in the UK to just 0.10%, with this remaining in place as part of wider quantitative easing measures.

Because of this, placing your money into a standard savings account is no longer particularly appealing or lucrative, so it may be better to seek alternative ways of speculating to accumulate in the current economic climate.

We’ll explore the reason for this below; while asking how you can make your money work for you and to generate even more income for your future.

Why should you speculate to accumulate in 2021?

Quite aside from stagnant interest rates, regular earnings are also in decline in the UK, so the traditional ways of earning and boosting your income are no longer viable in a post-Covid universe.

What’s more, energy and council tax prices are expected to soar in the next 12 months, potentially adding hundreds to your annual housing costs and stretching your existing capital further than ever.

In this scenario, your existing and disposable income remains your most important asset, and one that can be used to generate more wealth in the near and medium-term. There are various ways in which this can be achieved too, and we’ve outlined some of these in detail for you below:

#1. Investing rather than saving

Most of us put our money into savings accounts out of habit, but it’s usually much more beneficial to seek out investment options that suit your available amount of capital and risk outlook as an individual.

For example, you can access investment savings accounts to ensure that your money is sunk into managed portfolios according to your risk profile, with these likely to deliver an incremental yield over time.

Alternatively, you could consider investing in a diversified stock index such as the S&P 500, with this known to bring an average annual return of between 10% and 11%.

This compares favourably to the current average savings account rate of less than 1%, so it’s a more than viable option that can make the most of your hard-earned cash. 

Investing can mean you get much more back more than you put in, but it is never guaranteed.  Capital is always at risk when investing so pick a risk level that suits you and seek financial advice. 

Interested in getting some free money? Check out my list of free money offers to get started:

#2. Trading 

For those of you with a slightly healthier or more significant appetite for risk, you may want to consider trading assets and securities in the financial market.  There are many reasons forex trading has become a popular side hustle of late.

By using a forex broker to start trading, you can begin to speculatively trade currencies as derivative assets, for example, enabling you to capitalise on fluctuating currency exchange rates without assuming ownership of the underlying instrument.

This market is also highly leveraged, which means that you can open relatively large forex positions with a small cash deposit.

Over time, you can also use your forex broker to access a wider and more diverse range of markets, as you look to bank more sustainable returns.

#3. Launch a new business

This option is also at the higher end of the risk spectrum, depending on your choice of business venture, the market and how much you’ll need to invest in startup costs.

However, the potential returns here can be huge, particularly if you create a viable business plan and accurate financials that enable you to plot a profitable and lucrative course as an entrepreneur.

The key is to do your market research thoroughly, ensuring that you strike the right balance between risk and reward and afford your venture every possible chance of success.