Introduction

Whether it’s taking a more active interest in our superannuation, starting to build an investment portfolio, or even trying our hands at playing the stock market, we can all benefit by understanding the language and key concepts of investing. Here’s a quick introduction.

Asset classes

There is a huge range of potential investments out there, and these can be grouped together in asset classes that are based on shared characteristics. There are many asset classes, however the major ones that most mainstream investors focus on are shares (or equities), property, fixed interest and cash.

Introduction

Far from being the realm of the rich, building an investment portfolio is something that most people can do. It can start as a simple savings plan – a few dollars in the bank – before expanding into a diversified portfolio containing a range of asset classes.

Introduction

One of the most common questions I’m asked as a financial adviser is “will I have enough to retire?” It truly is the $64,000 question and if $64,000 was the answer, we’d all be on easy street!

With so many variables involved, there is no set answer, but these days with many of us expecting to live longer, at least one million dollars is the minimum required to fund a comfortable retirement.

Below I have outlined some key tips that I would talk to you about if you were sitting in front of me:

Introduction

A regular savings plan can turn small amounts of money into a sum that can take you closer to your dreams much faster. All that’s needed is time and discipline.

For example, let’s see what happens to an investment starting with just $100 and adding $100 each week from your regular income. Table 1 shows what the investment value would reach after five years and up to thirty years. In this example, we have assumed that the investment pays a return of

Introduction

But there is one big difference and it’s all about perception of risk.