Why Are You Investing ?

Investing is obviously meant to make money, money is meant to serve a purpose. It doesn’t matter whether you are putting a few dollars away in a term deposit until your next holiday, or developing a major diversified investment strategy for the rest of your life. The things you need to consider will fundamentally be the same.

What are your financial goals?

Work out what goals you are aiming for and how long you want to keep the investment. If your goal is short term, for example, you want to buy a new car at the end of the year, then you may prefer products with greater certainty in the short term. But if your aim is a comfortable retirement in fifteen to twenty years, then you may be more willing to invest in products which may, over the short term be less certain but which over the longer term usually show a higher than average return.

What amount of risk are you comfortable with?

Think about what level of risk you feel comfortable with. If you are going to stay up all night worrying about your investments, then it is not a good idea to choose a more risky or volatile investment.
The theory is that a higher level of investment risk usually gives you a higher return. If you can live with a higher risk, then you will be comfortable with shares or share-related products. If you prefer lower risk investments, you may want to invest in safer products, but which offer lower returns. These include interest bearing deposits with banks or other financial institutions.

What stage are you in your life?

Your investment strategies may change depending on what life stage or “passage” you are at. If, for example, you are young and have just started work, you will be able to take long term risks with your investments, because time is on your side. On the other hand, if you are near retirement, you will want much less volatility in your investments and will be seeking a secure income. What Stage of Life are you in ?

How can a Financial Planner help?

You can discuss your goals with a financial planner. Your planner should understand your financial needs and goals and develop a plan that suits those needs. Only deal with a licensed adviser. 

Investment Trends

The most recent property boom coupled with the downturn in the share market, the dot com crash and low interest rates has meant that a growing number of Australians are now focusing their attention on investing and buying property.

This has also led to a rapid increase in the number of “property developers” and investment property owners. Many people have realised that they have substantially increased the equity in their own homes just about overnight. Many people are now utilising this equity to purchase more property.

If this sounds like you, then like thousands of other property investors you have probably purchased, or are about to purchase your investment property in your own name or jointly with your partner without stopping to think and seek advice on what would be the best way to go about it. Or even worse, you have sought advice and the advisor told you “trusts are dead buy it in your own name”!

Although simple in its solution there are many reasons why you should seek professional expert advice when identifying the best investment structure for your investment property. The wrong structure today may in fact cost you thousands of dollars during the term of your investment and when it is sold.

Many investors are making the wrong choice simply because they don’t know all the facts and options available to them and have not have sought professional advice from financial advisers specialising in this field.

HELPFUL INFORMATION

FIDO (ASIC site - Money Tips / Investing)