Financial Investment

A financial investment is an asset that you put money into with the hope that it will grow or appreciate into a larger sum of money.

The idea is that you can later sell it at a higher price or earn money on it while you own it. You may be looking to grow something over the next one year (saving up for a car) or over the next thirty years (saving for retirement). How you invest these dollars can be very different. How much time you have on your side is often a key thing to consider when making a financial investment. The more time you have, the more risk you can usually take. The more risk you take, the more potential for making more money.

Ways to invest

You can invest '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 ‘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.