Whenever you talk to someone about financial security and wealth building, invariably the topic comes around to investments. For most of us however, we just hope to pay the bills, let alone find money for investments!

It’s not such a hopeless topic however - you might be surprised how easy it is to put together your own investment portfolio by reshuffling your budget. So let’s take a look at some of the basics of investing, by identifying the four different types of investments that you might want to investigate further: fixed interest, shares, property and cash.

Fixed interest investments

These are usually issued by governments, corporations and financial institutions to raise money for their own investments. In return for you ‘lending’ your money to these financial bodies, you receive a fixed rate of interest that does not change over the life of your investment. Australian fixed interest investments are considered low risk, giving investors a regular income and helping to diversify investment portfolios.

Share market investments

You can buy shares in Australian or international companies either directly or via a managed fund, where you enjoy the benefits of the company’s profits in the form of dividends. Unfortunately, you can also suffer from the vagaries of the share market, resulting in substantial losses if you are not experienced in these types of investments. Your best option might be to invest using a managed fund where you rely on the experience and skills of a fund manager to make your investment decisions. These can be high risk investments, but if you are in it for the long term, they can be a valuable part of your investment portfolio.

Property investments

You can invest in commercial, residential or industrial properties, but if you are new to property investing, it might be best to utilise a property managed fund, where just as with share market investing, you rely on the skills of a fund manager to oversee your investments. On the other hand, many Aussies own investment properties themselves, benefiting from both negative gearing and capital gains. It all depends on your experience and your comfort level, as to whether you join a fund or manage your own property portfolio. In the long term, property investments tend to be low risk and some can deliver very high returns indeed.

Cash investments

These types of investments include bank term deposits and savings accounts in financial institutions where you receive interest on your savings. Many Australians have these types of accounts and whilst the interest rates you receive on your money at the moment is very small, it is a move in the positive direction. Cash investments can also include gold and other precious metals, as well as precious stones. Whilst these can’t be used as cash themselves, you can liquidate them very quickly and turn them into cash.

A diversified investment portfolio usually includes at least two or more of the above types of investments, but the percentage split can change depending on your needs and your returns.

If you need help to create an investment portfolio for yourself or your family, call Amanda McCall on 07 3356 6929 or complete our online enquiry form.