A financially secure future is something we all look forward to in life, but the question remains… How do you build security for tomorrow without sacrificing your lifestyle today – especially if you have a family to raise or a mortgage to manage?
It’s time to set your sights on the future and what it brings for you and your family. Your long-term strategy is likely to include everything from cash, managed funds and shares, to the family home and your super. So it makes sense to look at all your assets as a diversified portfolio rather than a collection of separate investments, that way, you can improve your strategy and make sure you’re getting the right overall balance between risk and return.
Risk Vs. Return
Most investors understand that there’s a trade-off between risk and return - with higher growth assets comes greater risk. What you might not realise, however, is that the right mix of investments can give you better returns without driving up your overall risk. That’s because different asset types tend to rise and fall at different times, therefore the right combination can help you take advantage of the rises, while cushioning the impact of the falls. With this in mind, it’s important to review your investments and think carefully about the role they play in helping to build your portfolio.
Investing in Property
The family home is often a large part of our personal wealth – therefore, we invest a large proportion of our income, and our lives, into paying it off. The current record-low mortgage rates are a great opportunity for property investors, whether you’re looking to get a foothold in the market, grow your property portfolio or simply pay off your home faster.
While property can be a great long-term investment, it should only be one part of your portfolio. The value in your home is often locked up and hard to access; that’s where the other assets in your portfolio come into play – especially if you need funds in the short term for things like the kids’ education.
Investing in Shares
Australian shares have outperformed most other investment options, so despite the short-term ups and downs, history shows that shares are a great long‑term investment.
It could also be worth investing in global shares for further investment opportunities.
Investing in Managed Funds
Managed funds - what are they? With a managed fund, your money is combined with contributions from other investors, and an investment manager then buys and sells shares or other assets on your behalf. This is a great way to take advantage of the benefits of a diversified portfolio and draw on a wider range of opportunities not available to individual investors.
Whether you’re looking to grow your money over the long term, earn an income today, or something in between - if you have some money to invest but would prefer a professional to make the investment decisions, a managed fund could be the right solution!
Super – A Tax-Effective Investment
Super is likely to be your biggest asset after the family home. Like a managed fund, super isn’t a separate asset type, but a vehicle for investing across a range of different assets. One of the main differences is that super can be extremely tax-effective.
Generally, you’ll pay less tax when you put money into super – less tax on your investment returns and less tax when you take it out. So compared with a non-super investment, super can give you more value from every dollar you invest. It makes sense to treat super like any other investment and give it the attention it deserves - think carefully about your super investment options and ensure you’re managing them actively to achieve your desired outcome.