| There are many types of investment. Broadly speaking, they are divided into four groups: short-term deposits, bonds, property, stocks.1. Short-term depositsA) Bank savings accountsThe simplest type of cash investment is a savings account. Returns are lower compared with other investments, but returns are guaranteed by the bank. A part of the whole amount of money can be withdrawn whenever you wish (total liquidity).B) Fixed term investmentsYou give the bank an amount of money for a set period. In return, you receive a higher interest than you could receive from a savings account. You can withdraw your money, however, you will get a lower interest rate.2. BondsBonds are issued by the government or a business. You give them a sum for a certain period, and they promise to pay a certain interest and pay you bank at maturity. Although bonds lock your money away for a set period, they can be at times traded.3. PropertyProperty investments can be very profitable, providing it is properly managed. Property investments can be direct and indirect.A) Direct property investmentIf you have made a direct property investment, you can control the daily management of your property yourself, or use a property management business to do it for you. A property management firm finds tenants, collects the rent etc. Fees for these services are ordinarily a percentage of the rental income.B) Indirect property investmentFor an indirect property investment, you can make an investment in a private superannuation investment pattern or managed investment fund that invests a part of your money in property. This form of investment makes it easier for the average investor to benefit from different types of investment.4. StocksBy investing in stocks of a public corporation listed on a stock exchange you get the right to share the future income and value of the company. The return can come either in the form of dividends or capital gains. Certainly, shares can also decrease in value.Remember to check with your financial consultant before making an investment. |
