Smart Investing In Your Stable Future

You’ve probably heard the age-old adage – “you’ve gotta spend money to make money”. But it goes without saying that you need to spend money, in a smart, often heavily-researched fashion, if you wish to see a good return on your investment.

Investing can be an enjoyable and rewarding process, and thanks to the internet, it’s never been easier to start! What you choose to invest your hard-earned money into is a very personal choice and not every form of investment suits every person. Some people may gravitate towards the thrill of a high risk, high reward venture, while others may prefer the stability that comes from a lower risk investment.

Below are a selection of popular options to consider, if you are looking to begin your foray into investments:

1. The Share Market

The sharemarket can be a great place to start your investment journey. One great attribute of the sharemarket is that you can invest small amounts of money, which means you’re not putting all of your eggs in the one basket.

There are many different ways to invest in shares – from purchasing individual shares in a company to index managed funds.

You make money from your investment either when the share price increases, or when the company pays out their dividends. Dividends are usually paid out twice per year.

The famous quote from Baron Rothschild: “Buy when there’s blood in the streets”, is one many an investor apply to their strategy. Buying when the market is low often means you get more bang for your buck in the long term.

2. Property

For those with a bit more capital available, and who are looking for a brick and mortar investment, property might be the way to go. This isn’t just restricted to buying houses, either. Some other options for property investment include apartments, land, and retail real estate.

If you already own a property, there’s a good chance you can use the equity from it to help you in getting a larger loan amount for a future purchase. Equity refers to the amount of your property you own outright. There are many helpful, free tools that can assist you in calculating your property’s equity, such as this one from Lendi.

When looking at properties to purchase, remember to research the area you’re looking to buy in thoroughly. If you’re looking to invest in a place out of your home city or state, sites such as StreetAdvisor can be good places to start when researching, as they offer opinions on the potential area from those who have visited or live within it.

3. Bonds

One of the positive qualities of investing in bonds is you can choose the type you wish to invest in, with the right kind of risk profile for your comfort level. The basic premise of bond investing involves a person lending money to either a company or the government, for a set period of time. This lending is referred to as a bond. During this time you receive interest at an agreed-upon rate. Bonds are issued by both the government and companies to raise money.

The interest you receive from bonds is paid either quarterly or every six months. For most bond investments, you purchase the bond at the beginning of the term and hold it until its maturity. At this point, you can receive your initial investment back.

Bonds from companies do not give you ownership rights to that company (unlike shares).

Not all bonds are created equal – there are high-risk and low-risk bonds, and those in between. In general, bonds that are more likely to be paid on time and those with shorter maturities offer lower interest rates than higher-risk bonds.

There are also ‘exchange traded’ or ‘listed’ bonds, which can be bought and sold on the secondary market.