If you are considering investing some money, but have no idea where to start – don’t be alarmed! There are many avenues that you can choose and this article aims to look at the best options for novice investors. Investing is a wise idea because you could get a really healthy return on your money and be in a strong financial position.
Loan provider Wonga handily summed up 6 of the most common forms of investment in a recent blog article that are relatively easy to pick up and learn for the beginner; which we’re going to summarise here for your convenience:
- Money market accounts – a form of deposit account where interest is paid out according to the present interest rate in money markets.
- Unit trusts – Unit trusts are a form of investment where an investment manager will purchase a ‘basket’ of assets – this ranges from shares of companies, commodities, or fixed assets such as property.
- Share trading – This is where investors will purchase shares (also referred to as stocks) in either one or various companies.
- Index funds – Like shares, index funds are represented on stock exchanges and you can buy various amounts of ‘units’ or ‘stocks’ of an index fund at a time.
- Foreign exchange trading – Buying foreign currency is useful because the currency will strengthen or depreciate over a period of time.
- Property – Buying a property is thought to be one of the most stable ways to invest your money.
A further explanation of each form of investment is accessible from the Wonga link provided above.
Key things to Consider
Get expert help – When it comes to investing, our first piece of advice would be to speak to a financial advisor before investing any large sum of money. They know the market and will be able to give you the most up to date advice out there.
Consider your risk level – You will need to think about how much you want to invest, what returns you would like and what kind of risk you would be willing to take. Wonga say, “Understanding the level of risk you are willing to take on as an investor is key to unpacking where you should place your money, and how quickly you should expect a return.”
Remember the benefits – Debt Rescue talk about the benefits of investing your hard earned cash, “Saving your money in the bank means you will have money when you need it. But it won’t increase your wealth. Investing is one of the best ways to grow your money.”
The stock market first step in SA – If you are considering the stock market, then all South African investments go through the Johannesburg Stock Exchange. So, your first step is to open an account with a South African stockbroker. There are many online stockbroker accounts available. You can find a list of authorised JSE Equity members on the JSE website.
Ultimately, investing your money is a risk – but you can choose that level of risk (low, medium or high) when you pick your investment. If you are careful and pick wisely, then it could end up being highly lucrative for you.