It’s significant to learn the different ways to invest your money. It’s easier to decide which ones are right for your investing goals once the light is shed on the available choices.
How this works is, for a fixed period, you invest a sum of money with your bank and earn interest. Interest can be paid on a monthly, quarterly, or annually manner. A bank offering 4.99% p.a. for 12 months is an example of a term deposit. An offering of 2.00% on balances above $500 is an example of a bank deposit.
This is where you loan your money to a company. They will provide you with a fixed return — usually higher than typical bank offers. You can buy bonds in companies which may offer a return of 5.50% p.a. for 2 years.Different Ways To Invest Your Money Click To Tweet
Buying houses is a common way to invest in New Zealand. You can buy a property then rent it to pay the mortgage. It can also provide you an income from the increase in value over time.
Most of the time, investor mortgages require 35% or 40% of the price of the house upfront. The rates of returns differ depending on the property type and location.
Buying a share means buying a piece of a company. The more you buy is how much you own the company. Simple!
What makes this attractive is the dividend. You buy shares believing the price will go up in time. Although it’s risky as the price can go up and down anytime. You make or lose the actual money once you sell your shares.
This is a current type of investment where you lend to a platform, who lends your money to borrowers. This offers higher return than those by banks. The platform assesses the borrower’s repayment capability before lending out your money.
Same with peer to peer investments, private companies lend your money to borrowers, usually in short-term loans form.
9.00% p.a. with a minimum investment of 2 years — this is an example of how finance companies pay you a return on your money. Once it’s up, you can withdraw the money or reinvest it.
During the financial crisis in 2008, finance companies were in the news as most of them went bankrupt because non-repayment of their loans.
A managed fund can be comprised of 1,000 shares. Your investment is spread over these shares. The performance of the managed fund depends on all of the investments that comprise your fund.
To operate the managed funds, there’s usual annual fees — ranging from 0.10% to 5.00% of the value of your investment. As there may also be entry and exit fees, managed funds often form part of a long-term investment strategy.
This could be buying into an existing operation or a startup. With this investment, you don’t need to do anything (passive) or you work in the business (active).
Usually, this is an investment with a high risk. You may be required to invest more than you originally planned, to keep it going in the short term. It’s really important to understand all of the details about the business before you invest.
Need funds? Pretty Penny Loans offers easy loans.
These easy cash loans are approved fast! Apply online and once approved, you have the funds within the hour as long as your loan has been finalised before 8:00 pm.
PPL doesn’t charge a default interest rate.
PPL sets things up so you can make repayments in step with your pay cycle. Repay either weekly or fortnightly, depending on your income.