Saving is putting money aside for a short term goal or in case of emergency. Generally, funds are held at call and might earn a relatively low rate of interest.
Investing is strategically putting your money to work for the longer term, usually with the aim to build wealth and increase your financial security.
Factors that determine the nature of your investment include:
- Objectives – what do you want to achieve?
- Timeframe – how long do you have to invest?
- Risk tolerance – how comfortable are you if the value of your investment fluctuates?
All investments carry a level of associated risk. Generally, investments with higher rates of return over the long term have a greater level of risk in the short term. Similarly, those investments with lower risk usually have a lower long term return.
Diversification is a strategy that spreads the ‘risk’ across a variety of different asset classes, minimising the overall risk. Over time, this approach can help build the total value of your portfolio.
There are many types of investments than can help build wealth - including:
- Cash
- Fixed interest
- Property
- Australian shares
- International shares
Shares - direct investment vs. managed funds
If you prefer to control where your money is invested you can purchase shares directly.
Managed Funds pool the money of multiple investors into a single investment vehicle with a common objective and strategy. They provide a relatively easy way to invest in one or multiple asset sectors such as shares, property and fixed interest.
Bridges offers a full stockbroking service that helps you identify investment options for your specific circumstances.
The right advice
A Bridges financial planner can help assess your needs, explain suitable investments and develop appropriate strategies.
1. This is general advice only and does not take into account your objectives, financial situation and needs. Before acting on this advice, you should consult a financial planner.
2. Bridges Financial Services Pty Limited trading as Bridges Personal Investment Services (Bridges). Bridges holds an Australian Financial Services Licence No.240837 issued by the Australian Securities and Investments Commission (ASIC), is an ASX Participant and a Principal Member of the Financial Planning Association of Australia.
3. In referring Members to Bridges, Gateway Credit Union does not accept responsibility for any acts, omissions or advice of Bridges and its authorised representatives.
4. Gateway Credit Union may receive commissions from Bridges, for referring Members who invest through Bridges. See Gateway’s Financial Services Guide.