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The Main Types Of Investments

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Financing Tom Jennings, has a job where he earns $320 a week and attends University. He lives in a share house with 3 of his classmates which totals $125 weekly and shares the cost of groceries and internet. He owns his current car and pays for fuel, insurance and registration. He has a phone plan which totals $60 monthly. He has a total of $1000 currently in his savings. Examination of the budget shows a deficit of $44. He must remove examine the non-essential items and cut back were possible. This may require spending less on personal items, entertainment and the holiday. Or looking at what establishes emergencies or some of the other items until the budget is balanced. The 10% of savings could be reduced but is not recommended because…show more content…
A term deposit lets you earn interest on your savings at a similar, or slightly higher, rate than a cash account, but it also locks up your money for the duration of the ‘term’ so you can’t be tempted to spend it. Bonds, on the other hand, basically function as loans to governments or companies, who sell them to investors for a fixed period of time and pay them a regular rate of interest. At the end of that period, the price of the bond is repaid to the investor. Although bonds are considered a low risk investment, certain types can decrease in value over time, so you could potentially get back less money than you initially paid. • Shares are considered growth investments because their value can rise. You may be able to make money by selling shares for a higher price than you originally pay for them. If you own shares, you may also receive income from dividends, which are effectively a portion of a company’s profit paid out to its shareholders. The value of shares may also fall below the price you pay for them. Prices can be unstable from day to day and shares are generally best suited to long term investors, who are comfortable withstanding these ups and downs. Although they have historically delivered better returns than other assets, shares are considered one of the riskiest types of investment. • Property investments include: Residential property such as houses and units, Commercial property such as individual offices or office blocks, Retail premises such as
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