Four of the Best Investments

When you work hard for your money, it is natural that you want your money to work for you. People in a position to invest funds are faced with many different options for investment – should you purchase an investment property or put your money into shares? Perhaps you should contribute more money to your superannuation or invest in term deposits.

With so many options available and promotional materials that seem to emphasise the benefits of each, it can be difficult for an investor to decide where there money is best placed.

So, what are some of the options for investment and what are their benefits and disadvantages?

#1:  Property:

Property investment is a perennially popular investment option which is acknowledged for the level of security and financial return that it can offer.

Investment properties are a great investment provided that you do some research and purchase a property in a sought after area with features that are desired by tenants. For example, properties that are located close to employment centres, public transport, schools and amenities will usually be popular.

Property is also a good investment option because, generally speaking, Australian property prices have increased significantly in recent decades and this trend looks set to continue.

#2:  Shares:

As the share market has been through incredible highs and lows in recent times, particularly during the Global Financial Crisis (GFC), people who have invested in shares have been subjected to a rocky ride. However, peaks and troughs will always characterise the stock market and this is something for which investors need to prepare.

It is also worth noting that some share sectors naturally do better than others. If you are interested in investing in shares, it is worthwhile doing some research and/or working with a qualified and trusted financial advisor who is best placed to advise you of the shares that may suit your needs and financial goals.

#3:  Superannuation:

Although superannuation is a structure that holds investments and is technically not an asset, superannuation funds have enjoyed increases over the past decade despite being very negatively impacted by the GFC.

#4:  Gold:

If you consider investments purely in terms of gains, gold has done very well over the past decade, significantly increasing in value.

However, to achieve the maximum financial gain from gold bullion, a person would have needed to invest their money in gold more than ten years ago. It is also worth keeping in mind that as the Australian dollar has strengthened and increased in comparative value, the gains to be made from gold have become a little less significant and appealing.

When comparing and evaluating each of these investment options, each has their merits and drawbacks, but property investment is generally the most safe, secure and financially profitable of the options.

Property investment has the advantage of rising property values, the possibility of leveraging other properties and investments and rental income helping to subsidise your mortgage repayments. Also, investment in property allows for a range of tax deductions for expenses incurred in running and maintaining your property and depreciation. For these reasons, property investment quite strongly outperforms the other classes of asset.

There are a number of possibilities for investors to place their money and sometimes, the range of options can be a little intimidating. Investors need to carefully evaluate their options and consider the merits and disadvantages of each in relation to their financial situation, needs and aspirations.

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