If you feel overwhelmed considering different investing strategies then you aren’t on your own. Deciding what assets to invest your money in can be a daunting task. However, we are here to help you.
Firstly, what’s an asset?
An asset is simply something that you own that helps you build wealth for the future. There are various classes, or categories, of assets that you can choose from. Each comes with varying degrees of risk.
Let’s take a look.
Considered a ‘defensive’ asset, cash includes bank accounts, high-interest savings accounts, and term deposits. They are incredibly low risk. As a result, returns are lower too. With interest rates still relatively low, your money will grow slowly.
Buying shares means that you own a portion of a company, and in return receive a portion of the business’s profits. While shares are an incredible tool for building wealth, they can be considered high-risk and share prices can fluctuate wildly.
With Government or corporate bonds, you are lending money to a company or government and in return, you will receive interest payments. While the repayments offer a stable income, much like cash, the return is low.
Property is a two-dimensional growth asset. That means that when you purchase a property, it will not only increase in value, known as capital growth, but it will also provide an income through a rental yield. It is also a physical asset, meaning you can see it, touch it, and live in it! This is hugely enticing to many who like their investments to be tangible.
There is a lot of buzz around crypto-assets like currencies such as Bitcoin and Ethereum or non-fungible tokens (NFTs). These emerging assets are not physical, but exist in a ‘digital wallet’.
Despite their hype, they are still considered to be highly risky assets because they are technically not considered financial assets and therefore not regulated.
Their value is highly dependent on popular opinion and can be easily stolen by a hacker.
Here’s the bottom line
In Australia, property is considered the number one asset class for building wealth over the long term. At AssetBase, we agree and consider property investing the safest option over time.
Where will you be investing your money to build wealth for the future? Get in touch to discuss how we can help.
*Please note that past performance is not an indicator of future performance. AssetBase operates as a Real Estate agent licensed to source & sell property nationwide. This email does not constitute financial advice, credit advice, legal advice or tax advice. Financial advice should be sought from a qualified financial adviser, credit advice from a qualified mortgage broker, legal advice from a solicitor & tax advice from a qualified accountant.