Investing is all about buying things that put money back into our pockets. Sound intimidating? It’s really not. Those of us who have a bank term deposit or are in KiwiSaver – we’re already investors!
We become investors when we put our money into things (assets) that can earn income or grow in value. The general aim is to earn a return that’s greater than any fees, taxes and inflation.
Being an investor also involves a degree of risk. Generally, the higher the returns we chase, the higher the risks we’ll need to take on.
There are some key fundamentals of investing money that we can rely on. These investment basics are covered at the link below:
We can ask ourselves a number of investing questions to get on the right track with our investments.
Shares? Bonds? Property? Term deposits?
How do we know which is right for us? And how much of each should we hold?
Knowing what type of investor you are will helps you work out the mix of investments (and kinds of investments) you should consider - what to invest in and where to invest.
Sorted’s investor kickstarter can help with your investor type, give you a typical mix of investments for each investor profile and show you what we can expect when investing money.
You can invest money 'directly' through a bank (term deposits), sharebroker (shares and bonds), real estate agent (property) or other brokers. If you invest directly in shares, bonds or property you’ll need to be well informed about the sharemarket, and the business or real estate scene.
You can also invest money ‘indirectly’ through a managed fund. In a managed fund (or unit trust) your money is pooled with that of other investors, and a professional fund manager invests it in a variety of investments on your behalf.
Before leaping into any investment decision, there are some basic rules to follow: