Investing money is such a hot topic in 2021 and if ever you were going to try something new, maybe this is it!
But, it can be a big, scary thing to embark on by yourself. Read on to get some quality insight from Gerry Incollingo, the MD of LCI Partners who we spoke to for his great insight into investing your hard-earned dollars.
Everyone should start investing but knowing where to invest while minimising risk is key to growing your wealth or having a steady passive income. First time investors should be aware that there is some degree of risk with all investments, but by engaging the services of an investment strategist or financial advisor, together you can develop a solid investment plan to success.
The key to good investment is education
Many people think you need to be rich to invest, but the key to good investments is education. One of the biggest mistakes new investors make is diving into the investment pool with little to no knowledge and without talking to a financial expert or investment strategist.
Knowledge is power. Listen to podcasts, join online forums and read books on investments for beginners so you can feel more confident in your decisions. When you’re ready, connect with a financial advisor to customise a robust investment plan based on your personal circumstances.
Methods of investment depend on your budget and long term goals
There are a myriad of different ways you can invest your money—shares, bonds, property or even gold—but it all depends on your circumstances, budget, your long-term goals, the returns you want and how much risk you are willing to take.
If you are serious about investing, you will need to build a diversified investment portfolio that takes into account your end goal, no matter what the economy is doing.
Property investments is where most beginner investors like to dip their toes into the investment pool with it being relatively low risk. However, if you are looking for faster returns, you need to remember property is a long-term commitment. You will need to sell to get your money back, so if you’re looking for cash, there are different investment methods you can consider.
Stocks and shares
Always connect with a financial expert or investment strategist to minimise risks, but a good place for beginner investors to start is Blue Chip stocks. These refer to stocks from highly reputable companies with a long history of paying stable or rising dividends.
Property bonds
Investors can draw a monthly income or reinvest their earning in a low-interest rate environment. Generally, you can get access to your money when you need it.
Invest in a business
Investing in a large, publicly traded company can be very profitable. But there’s something to be said for investing in a small business or individual. Be sure to seek independent advice and do your due diligence as while the returns can be significant, the risk is also higher. Then again, no one ever becomes a millionaire by playing it safe.
Long-term interest accounts
When you invest money into a long-term deposit you won’t be able to access your money for an agreed term duration (for example 1-year to 10-years). In an emergency, you may be able to get access to the cash, but fees will apply.
Investment properties
Investment properties can provide you with a regular passive income. Building a diverse property portfolio will require seeking advice from an expert with real estate industry experience. You may be better off to buy and hold, rather than purchase the property with the intention of renovating and flipping it as soon as possible.
Salary sacrificing
Investing in your future, salary sacrificing is an agreement you can come to with your employer where a portion of your salary is withheld and paid into your super fund. This minimises the amount of tax you pay and is a good way of ensuring you can enjoy a comfortable retirement.
Before you make any decision, be sure to educate yourself and then talk to a proven investment specialist for a customised investment strategy.
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LCI Partners are a firm that specialises in accounting advisory, lending, wealth, property, insurance and legal.