Investing is a great way to help ensure financial stability in later years, but with so many options available, how do you choose which path is best for you and your future?
Well, there are a few things you should consider before investing. For instance, why are you making an investment in the first place? How comfortable are you with the idea of large chunks of your cash locked away for the long term? And how prepared are you for the potential risks? Understanding the risks of any investment option and learning how to reduce or even remove that risk is very important.
So, what are the options? You’ve got traditional methods such as shareholding, fixed income (like bonds), cash in the bank, and of course property. Now, with the rise of digital currencies, there’s even Bitcoin, but it can be confusing to understand and even more confusing to use. With fewer companies accepting it as legitimate payment these days, it seems more like a fad than a viable, long-term investment option.
Property is perhaps the most dependable because you can track the stability of the market and trust that when times are good, your returns will be too. While the other options, particularly shareholding, have the potential to be extremely lucrative, they depend largely on circumstances outside your control, like the state of the economy and company performance.
Property, on the other hand, could yield consistent profit, so long as you understand the property cycle and know exactly when to start buying, renting out, and selling. Right now, the market in Perth is ripening, which means great property deals can be made and the value of your investments will continue to grow for the next few years.
Cash investments are also dependable, as most of your money sits in your account accumulating interest, ready to be withdrawn at a moment’s notice, but with a 3.1% per annum return average over 10 years, they yield the smallest profits and interest rates could suddenly plummet, depending on the bank.
So, playing the investment game can be rewarding, but you have to make careful decisions. Putting your money in property may require a bit of research, but it provides long-term returns and a steady income stream, which should be the goal of anyone looking to invest in the first place.