Unfortunately, in the complex world of financial services, building up a ‘nest egg’ large enough to outlive you is not easy.
Back in the day, everything was so much simpler. The state pension provided a reasonable income, which, coupled with a healthy community spirit of friends and neighbours, would look after you for decades after you retired from work aged 60 or 65.
Today, knowing that the state pension will be enough to live off is less certain and even the date that you will receive your pension is not guaranteed. Will you get your pension when you are aged 66? 67? 68? 70? And how much will it be worth?
Other forms of investment have also become less rewarding.
· High Street banking – once the ‘go-to’ option for saving money, today’s record-low interest rates when compared to the rate of inflation mean that you actually lose money when using investing this way.
· Gold – often seen as the ‘safest’ investment, but actually offers no return unless the price goes up. With the price of gold often linked to the health of the wider economy, the value of your investment may actually fall significantly at the moment when you need to sell.
· The Stock Market - while long-term investing in stocks and shares has historically performed well, share prices are famously volatile. A market ‘correction’ (a 20% average share price fall) has taken place in the US S&P 500 every 8 years since 1950.
In addition to these significant hits on your investment, stock trading frequently requires employing a broker who charges a fee for every transaction you make.
· Cryptocurrency – with the meteoric rise in the value of Bitcoin, many savers wish they had put their money into digital currencies. However, as more and more new cryptocurrencies are created every year choosing the right one has become guesswork. Meanwhile, you cannot spend Bitcoin in any shop (except maybe the dark web) and its value is still based solely on speculation.
Furthermore, research from Cambridge University found that the global power cost of mining Bitcoin alone is equal to the power consumed by a country the size of Argentina. The environmental cost of using 121 terawatt-hours (TWh) of electricity a year for something without real worth will soon be under closer scrutiny.
Fortunately, a financial tool does exist that offers a healthy, fixed return without excessive risk and volatility.
Corporate bonds offer interest rates which are much higher than those provided by savings accounts in high street banks. At the same time, at the end of the agreed period (typically two, three, or five years) the full investment sum is returned.
The advantage for any company that is selling bonds is that they are able to raise investment sums without having to issue shares. Instead of selling a part of itself, the company borrows the money to take advantage of a new opportunity, and then makes regular interest payments (monthly or annually) to the investor, before finally repaying the loan in full on the agreed date.
Typically, companies use this tool to fund special projects. For example, in 2017, Microsoft issued corporate bonds worth $20 billion in order to buy LinkedIn, while the World Trade Center in New York was also funded by a 2014 bond sale (worth $1.8 billion).
One sensible approach to choosing a corporate bond to buy is to find an industry which is set for decent growth and to select a company that is well-placed within that sector.
The nanotechnology market has great potential. Worldwide, the use of nanomaterials for industrial applications is dramatically expanding.
Whereas, twenty years ago, only bulk raw materials such as industrial chemicals, rubbers, metals, and plastics were used to make consumer items, today these products are enhanced with nanoparticles, carbon nanotubes, and other nanoscale products, such as graphene. These nanomaterials are used to make paints and varnishes, are used in the automobile industry, in cosmetics, in the pharmaceutical industry, in making ships and sports’ equipment, as well as everyday products, such as glass, detergents, and fabrics.
Even if you are unaware of their presence, you have already used nanomaterials, in, for example, sunscreen, which offers better skin protection by containing nanoparticles of titanium dioxide or zinc oxide.
With a sturdy industrial base, the Czech nanotechnology sector is primed for development. Located in the heart of the EU economy, with a strong automobile industry, and a well-educated workforce to handle the next generation of raw material supplies – Czech companies producing and designing nanomaterials are looking for new investors.
One such business, is AG CHEMI GROUP, a Prague-based supplier of raw materials for manufacturing for the past 27 years.
Realising the burgeoning demand for nanomaterials, the company is now spreading its expertise in this sector.
The company already has two patents pending for nanotechnology in plastic production and modification, has helped numerous manufacturers design nanomaterial solutions for coatings, plasterboard, construction materials, and even anti-microbial fabrics.
Meanwhile, work has already begun in constructing a NANOTECHNOLOGY RESEARCH CENTRE to work directly with industrial users of raw materials in designing and producing the nanomaterials that they require.
The company has already been issued with an EU grant to help finance the project but is looking for further support via the sale of publicly available bonds with an annual interest rate of 6.8%.
While the project offers long term advantages, the interest is paid to investors every month. The size of investment available and the amount it will earn can easily be worked out with the company's online calculator.
Bonds can be bought for as little as 10,000 Czech crowns and there are no broker fees or hidden costs.