“What’s the best way to invest money at the moment?”

Woah, there’s a loaded question!

Here’s some important advice… anyone who tells you they know the best place to invest money RIGHT NOW is either a liar or they’re kidding themselves.

There are many factors which need to be considered when choosing how to invest money. In broad terms, there are only four places you can invest money – cash, fixed interest, property and shares. You can invest your money across all four of them in any combination and how you choose to invest across them will determine how much risk you’re taking with your money and the potential you have to make money.

Everyone has a different tolerance for risk and different people are willing to go to different lengths to make money. It’s all about passing the ‘Sleep at Night’ test. That is, however you choose to invest your money, it needs to be in a way that you’re comfortable with. If you’re not comfortable with your investments, then you’ll likely panic when things change.

Many people I work with come to see me with preconceived ideas about what investments they think are best. Therefore, a big part of helping people find the right way for them to invest their money is in educating them about what the different investment options are and the pros and cons of each. Often this is quite enlightening for people as their preconceived ideas are usually based on only having some information to go on. The reality is that most of us pick up our money habits and our thoughts on investing from our parents. And most of our parents didn’t have much of an idea about these things because neither did their parents. It’s a fact that financial literacy is poor, but as we are all living longer and longer, it’s never been more important. That’s why I invest the time with my clients to open their eyes and empower them with information when it comes to investing.

Once you know the investments that are available and how they work, it starts to become much easier to see how you can make investments work for you. The key is to choose the right investments for the right time frame.

Cash and fixed interest are defensive assets – low risk, low return and they’re perfect for money earmarked for the short term. Property and shares are growth assets – higher risk, higher return and they’re perfect for money earmarked for the long term. Matching the right investments to the right time frames is how you achieve the balance of protecting money in the short term, while also growing money to combat inflation and create wealth in the long term.

At the end of the day, the ultimate investment mistake is not investing. The trick is to get the right mix of investments.

If you’d like to get clued up on how investments work and what could potentially be the right mix for you then just give me a call on 0411 484 464 and book a complimentary appointment.

Cheers,

Daniel