The Four Types of Investment

Ever wondered exactly what your options are for investments. Essentially there are only four types of investments:

• Speculative
• Loans
• Shares
• Property

Speculative

This includes such items as gold, art and wine. The idea is that you buy a collector’s item in the hope that you can sell it for a profit in the future. There are often ownership costs, such as storage and insurance to also take into account. And just so you know, we’re not into speculation!

Loans
When you deposit money in the bank you are loaning money to the bank to use; for which you receive a very low interest rate. When you see organisations advertising high interest rates, do you think you’re placing your money in a high-risk situation? The interest you receive is taxed and in most cases is being eroded by inflation. While cash is still king, you can’t consider savings in the bank as investing!

Shares and Property
We like both because they offer potential capital growth possibilities and tax-efficient income. Each has different characteristics – you can’t sell the third bedroom, whereas with shares, you can sell all or part of a portfolio. You can use both property and shares to borrow more capital so as to invest more. Property will generally give you more borrowing capacity. You can use companies, family trusts, superannuation to jointly or individually own these assets.

But you don’t have to buy ‘penny dreadful’ stocks, nor the latest property spruiker offerings – we can help steer you in the right direction to build wealth.

Take a look at the last 12-month returns we have achieved for our clients’ superannuation and investments: CLICK HERE

If you aren’t actively involved in these markets and need to know how to structure for the best after-tax effect; and would rather seek professional advice, call us for a chat. 0414 583 558

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