You have been working hard. As a hard worker. You also accumulated cash in your transactional account. You don’t want this lazy balance to be in your transactional account. You know that, if money is in your transaction account. You are actually losing purchasing power as prices are inflating but your money is not growing. You are also thinking that your money can be easily accessed by criminals should someone get access to your account details.
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What is it that you can do with that money?
Invest your money in to any investment of your choice. You might have a low risk appetite or high risk appetite. But your choice must be suitable for your needs. There are various types of investments that you may consider. You may buy property and you start earning rentals. You may also realise capital gains or losses as the value of your property goes up and down. You may prefer to buy stock either on stock exchange or over-the-counter. With shares, there are dividends that you may get and there is capital gains and losses.
The other option you have is buying bonds. Bonds will provide you with guaranteed returns at the end of investment period. You earn interest with this type of asset. Lastly, you can just put your money into cash assets like fixed deposits, money market account or even notice deposits account. These are some one options that you may pick from. There are other options that are not mentioned here but available for you to take advantage of.
Options for someone who don’t need to conduct the research.
If you feel like taking type of investment that will not demand a lot of time from you. You may look at endowment type of investment. This investment is offer by insurance companies. However, endowment has assets mentioned above as underlying assets. Cash, equity, bond and property are the assets that endowment will also look at. But asset managers will do all the work for you. You don’t have to be involved in allocation of your money. Tax-fee Savings also form part of endowments, fixed deposits, and unit trusts. You just pick the portfolio that meet your needs. You may also consider collective investment schemes also known as unit trusts. Unit trusts will also invest in assets mentioned above. This type of investment, is more liquid than endowment.
Your appetite for risk
Before you embark on this journey of investments. You must first sit down and determine your risk appetite. Ask yourself few questions. How will you react if market goes the opposite direction? Will you withdraw my money or you will just keep your money in the portfolio to recover? How will complete loss of investment affect your financials? When you are investing. You must be mentally prepared for both worse and best case scenarios.
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