The best options for investing your money in 2018
If we’re honest, the one thing we all want is to live a comfortable life.
You want to have enough money to live your ideal lifestyle, to be able to pay your bills on time, to take your family on holidays, to give your kids a kick-start in life…
So, you start aiming to squirrel away what you can and pay off your bills as quickly as possible. But it’s not always easy, is it?
With the banks giving us next to nothing in interest, there are better ways to grow your wealth than trying to ‘hide’ it in your bank account.
And that’s through investments.
Now as financial advisers, we know that many clients initially shy away from investments thinking they’re ‘too risky’. And to some extent, they’re right. Some investment options are riskier than others.
But that’s why you need a financial adviser on your side when making investment choices.
Have you ever done a risk profile?
The first thing your financial adviser will run through with you is what’s called a ‘risk profile’. This is a series of questions that assess your understanding of investments, share markets and your comfort zone with the whole idea of investing.
The profile will ask you questions such as, ‘How would you react if your investment portfolio fell in value by as much as 20% in one year?’. It’s important to find out your preferred options you invest.
Once the profile is complete, you’ll have a score to rate your ‘investment tolerance’. Your financial adviser will then talk to you about your best options.
What are the most popular investment choices?
1. Bricks and Mortar Property: What we’ve seen over the past years, is that Property is a steady investment option. With the population booming, the value of houses is constantly rising, meaning your investment will give you a decent return.
2. Property Trusts: When you invest in property trusts, you purchase ‘units’ which are shares in the property. These trusts are usually for commercial properties such as shopping centres, large buildings in the city and infrastructure like airports or rail. In return, you receive dividends on the rental in the investment.
3. Shares: One of the best-known investment options with most people’s superannuation made up with share investment. You have a couple of options with shares:
- Invest in direct equities: you buy shares in companies such as Telstra or the Commonwealth Bank, and your rate of return (made up of income and growth) relates directly to the company’s performance.
- Invest in managed funds: a professional fund manager (such as a super fund) will pool your money with other investors and choose companies for you. When you invest in Australian shares, you are more than likely investing in the top 200 companies in Australia.
4. Managed Funds: If you’re looking to invest outside of your super fund, managed funds are a great way to go. A fund manager takes care of all the decision making for you, helping you to start small and invest in different companies while you build a portfolio.
Start investing today to build your wealth and financial security
Start now! It’s never too late to start, and you can do it for as little as $100 per month. The key is to begin somewhere and build it over time as your circumstances allow (i.e. your mortgage reduces, the car is paid off, kids have left home etc.). Aaron Kane at EK Financial would be more than happy to help you make an informed decision about investing your money.
Over to you
Email me at: aaron@ekfinancialgroup.com.au
