Investing became a catch-all phrase for anyone and everyone trying to generate additional passive income. And who doesn’t want that?
At Strategiq, we believe investing is key in establishing a financially stable future for yourself and your business. However, investing consists of so many nuances – that’s where we have you covered. Below is a brief overview of the basics of investing.
What is Investing?
Investing means putting your money into something with the expectation that you will generate income or profits in the future. Whether you invest in stocks or real estate, investing always comes with a risk – you may gain or lose profit.
One fatal mistake is confusing savings with investing. Putting your money in a savings account may allow limited and possibly no growth on your money. However, you can reap huge gains if you make smart investments.
Different Investment Strategies
There are generally two different strategies to approach when investing. The approach you choose highly depends on your financial goals and life place.
Short-Term: This strategy involves making the most profit you can in the shortest amount of time. For example, day trading stocks is considered a short-term investment approach. This form of investing can become quite risky as well.
Long-Term: If you want a long-term investment, this means that you expect returns over a longer period. For example, people investing in real estate hoping to sell their home in 10 years for a higher value, take a long-term investment approach.
What Can You Invest In?
Depending on your goals, there are many assets you can invest in. Here’s a brief list below of investments to look into:
- REAL ESTATE
Investing your money in real estate can generate large profits. From a family home to commercial properties, you want to look into the trajectory of the housing market and evaluate property value before you put your money down.
- MANAGED FUNDS
Investing your money into Managed Funds or Investment Funds is a safer way to invest in the share market as opposed to investing directly into shares as this is super time-consuming. A managed fund is a portfolio of shares that follow an Index, eg in Australia, the ASX200 managed fund would consist of the top 200 shares in Australia. An ‘Active Fund however would see a fund manager invest in shareholdings that attempt to beat the index. Either option takes the shares selection away from the investor.
When you purchase company stocks, this means you own a fraction of that corporation. For example, BHP and Telstra are popular stocks you can invest in. Once you perform the necessary research, invest in stocks that you find the most promising.
A huge plus side to corporate and government bonds is that these investments are generally safe and low-risk. When you invest in a bond, you are simply loaning the corporations or government that money. Depending on the payout plan, the government or company will pay you any interest generated on that loan.
The reality is you don’t need millions of dollars to start investing. You can start with what you have and still witness incredible returns.
While investing is an essential asset to your financial future, there’s a ton of regulations, rules, and insight that experts at Strategiq can walk you through. Our team of business and financial advisors has extensive knowledge to ensure you make the right decisions with your finances. Contact us today and receive your free consultation!