Knowing what to invest in
Which investment strategies are right for you? It depends on your financial circumstances and stage of life, but often a mix of several investment options can help provide you with a diverse portfolio that performs well in different market conditions. If you’re new to investing, here are some basic options to get you started:
Start a savings account – if you want to start putting aside some money for investment later in life, but are not sure where to start, a high interest savings account is a good conservative strategy to start you off. The major banks offer both savings accounts linked to your everyday transaction account, and term deposits which lock your money away for a set amount of time, usually 6 – 24 months. Banks will usually offer higher rates for term deposits to offset the inconvenience of not having access to your cash, but if you do need to pull the money out early, there can be break fees.
Contribute more to your super – starting a voluntary contribution to your super account on top of the amount your employer contributes can help you build savings for your retirement. You can look to build the contribution over time as your salary increases, and because it’s tax free you don’t have to worry about the possibility of owing extra money come tax time. The only downside to salary sacrifice is that you won’t be able to access this money until you are retired, so if you want to purchase a property down the line you will have to generate additional savings to do this.
Invest in shares – if you’re starting out in investment, it’s a good idea to think about entering the share market. Shares provide a strong level of capital growth over time, so they are a good strategy for younger investors who are not as reliant on their savings for income. It’s best to consult a financial adviser if you’re thinking of investing in shares, as they can talk you through some of the options on offer and help you decide on an investment plan.
Get into the property market – Property is a popular investment in Australia because of the potential for strong capital growth and rental yields, as well as tax efficiencies associated with negative gearing for investment properties. If you’re interested in taking on an investment property, a good first step would be to talk to a broker about your loan options.
If you’re thinking of making a property investment this year, Choice Home Loans can help. Our knowledgeable brokers are experienced in the investment market, and can help advise you on what loans may be best for you. Make an appointment to speak to one of our friendly staff today.