With such a huge range of options for investing your money in an ever-changing market, making the right choice can seem like a minefield. While the future can never be predicted, we take a look at some of the places you could put your money and how they could potentially pay off. Investing your money is a big decision to make, so whether you are new to trading or already have some experience, make sure you’re familiar with the different trading terms.
Investing in company shares will give you a stake in that business that will help you to directly benefit from its success. If you are looking for a longer term investment then this could be the right move for you. When investing in shares there is the potential of capital gains (which is taxed) from owning an asset that can grow in value over time. This comes with the added bonus of lower tax rates as well as potential income from dividends. But beware, as share prices can rise and fall rapidly – you must invest wisely.
Property has long been regarded a good long term investment, whether you want to actually live in it or wish rent it out to tenants. As shown in a 2016 report in the Adelaide based Advertiser big property gains can potentially be made by investing in real estate in regions outside your normal ‘comfort zone’ with lower risk and lower land tax bills. It predicted Melbourne and Brisbane were set to deliver the strongest growth on the property market.
3. International Investments
As the name suggests, this involves investing your money across global markets. Investing overseas can provide investment opportunities not available in Australia and lets you take advantage of potential for growth in foreign countries. Be aware, however, that while some countries may have higher growth and potential returns, they can also bring higher risks. Countries – like potential assets – need to be assessed for their earning potential.
4. Complex investments
Complex investments include things such as hedge funds, collateralised debt obligations, futures and options. While these can bring high returns that also means high risk. You will need to take on board plenty of advice and choose your investments wisely before you commit your money or you may end up losing more than you bargained for.
5. Managed funds
In this form of investment you will have your money combined together with other investors; then a professional investment manager will buy and sell your shares collectively on your behalf. This means you can access a broad range of assets or markets with a small amount of cash, plus it reduces paperwork and can make completing your tax return easier. However, you can be charged higher fees for these types of investments, which can eat into your profits.
6. Investments paying interest
Often seen as one of the safer investments you can make, this means that you will be lending money to a company, government or financial institute and in return you get the interest back. Not all types of interest bearing investments are safe though so be sure to seek financial advice if you are unsure.
While investing can bring great returns, help yourself avoid bad investments by being aware of scams and checking out anything that seems too good to be true. If uncertain, seek out independent financial advice.