Best Place to put my savings

Where is the Best Place to Put My Savings?

When you find yourself with some extra dosh and wondering where to put it so it can grow, we’ve got you covered! Here are some options where you can put your savings so they don’t just sit idle in some box.

From the simplest savings account for the traditional thinkers to cryptocurrencies for the more adventurous, check out some investment possibilities below.

Property Investments

This big-ticket investment is for those with sizeable savings or who can score a guarantor in lieu of savings. Property investments can be pricey; it also has a long-term, huge payment plan that can reach more or less 30 years to complete.

With this type of investment, you can make money by renting out the place or wait for the property’s value to appreciate and then sell it. Even with the property market struggle in the last couple of years, Australians still saw 8% in gross returns in property investment per annum.

Bonds

Less risky than most investment schemes, bonds, or fixed-income investments provide a stable and reliable return. With bonds, you invest by lending the companies (corporate bond) or government (government bond) some money. You gain payments in interest; once it matured, the initial investment you made (called the principal) is returned to you.

Equities or Shares/Stocks

If you fancy being a shareholder of a company and are not easily intimidated by the volatile stock market behaviour, this may be an option for you. By investing in shares, you are buying a portion of the company’s share and become, in effect, a part-owner of that company.

Depending on your strategy, you may get a high return or lose a significant amount. Some people, particularly the beginners, employ the help of an experienced stockbroker for a small fee.

Managed or Index Funds

Also called a managed portfolio, this investment works by pooling investments from other financiers whilst a fund manager manages the shared pool. The investment manager will look for high-value stocks where he can invest the pooled money. The money invested is equivalent to fund units, and the growth or earnings are divided among the investors.

Exchange-Traded Funds (ETF)

ETF is best described as a hybrid of index funds and equities, but easier than the other two. With this type of investment, you buy shares in an index’s range of assets. The shares can be traded or sold on an exchange. Buying and selling a share in an ETF is easy and only requires a small brokerage fee.

Cash Assets

It is the good old savings account we are all familiar with. Cash investment can come in the form of savings accounts and term deposits. The return may be lower compared to other investment options. Still, what it lacks in returns, it makes up for with stability.

Cash assets provide low-risk income through regular interest payment. The more money you put in and the longer it stays there, the higher the interest you earn.

Superannuation

Superannuation is, in a nutshell, a way of saving for retirement. It works by having a percentage of your pre-tax salary paid into your super fund. The regular payment successions can be arranged with your employer and can come in fixed-term or lifetime annuity categories. The money earns interest pretty much like in a savings account or term deposit. You can access the funds when you reach retirement and enjoy the fruit of your salary sacrifice.

Gold

Physical gold, gold derivatives, gold mining stocks, gold receipts, gold ETFs — there are many ways you can invest in gold. Everyone knows gold is a precious metal, and in a market that can be so rickety, its value is always stable.

Many investors actually use gold as a means of securing their existing wealth, rather than making a profit. Investors usually use gold as a diversification strategy for when stock market crash, since gold will always remain a valuable commodity.

Alternative Investment Trends: Cryptocurrencies and P2P Lending

For the truly enterprising investors, there are emerging trends in the world of investment where they can tap into. Investors can grow their wealth with these popular alternative investment options:

• Cryptocurrencies – Virtual or digital currencies, such as Bitcoin or Litecoin, can be used to pay for goods and services. Cryptocurrencies make it easier to transfer funds between two parties without relying on a third party like a credit card company or a bank.

There are many methods of earning through cryptocurrency.  Investors typically earn in cryptocurrency by buying and holding it and then selling it for a profit when its value shoots up. And just by holding it, investors can also receive dividends. Cryptocurrency mining is also a popular method.

• P2P Lending – Peer to peer lending works by matching a borrower with a lender with the help of a third party website that facilitates the transaction between the two. In this arrangement, the lender earns interest from the money he/she lend. The lender can pick the borrower from among his/her matches.

Growing Your Savings by Investing Wisely

One crucial consideration when investing is that you fully understand everything that encompasses an investment, including the risks involved. It is also a wise idea to explore the potential legal and tax implications of an investment before dipping your toe into it. If you are not 100% sure, it is best to speak with an investment or financial adviser for more information and guidance.

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