| There are a lot of types of investment. Generally, they are divided into 4 groups: short-term deposits, bonds, property, shares.
1. SHORT-TERM DEPOSITS
A) SAVINGS ACCOUNT
A savings account is the simplest kind of short-term investment. Returns on these investments are lower compared with other investments, but returns are guaranteed by the bank. A part of the whole sum can be withdrawn whenever you want (total liquidity). This makes these investments ideal for short-term savings goals, or as a place to keep your emergency fund.
B) BANK FIXED TERM INVESTMENTS
You give the bank an amount of money for a set period. In return, you get a higher interest than you could get from a savings account. If you withdraw your money, the interest will be lower.
2. BONDS
The government and businesses issue bonds. You give them money for a fixed term, and they promise to pay a set interest and repay you at maturity. Though bonds lock your money away for a set period of time, they can be sometimes traded.
3. PROPERTY
Property investments can be profitable, providing it is properly managed. Property investments can be direct and indirect.
A) DIRECT PROPERTY INVESTMENT
If you have made a direct property investment, you can handle the day-to-day management of your property on your own, or use a property management firm to do it for you.
B) INDIRECT PROPERTY INVESTMENT
In case of an indirect property investment, you can make an investment in a private superannuation investment scheme or managed fund that invests a part of your money in property. This form of indirect property investment also makes it easier for the average investor to benefit from diversification.
4. SHARES
By investing in stocks of a public corporation listed on a stock exchange you receive the right to share the future income and value of that corporation. The return comes either in the form of dividends or in the form of capital gains. Certainly, shares can also decrease in value.
Remember to check with your financial adviser before making an investment. |
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