If you had $200 to invest, where would you put it? What about $1million... or more?
Did you receive a tax rebate this year? Have you been given a pay rise? Did you receive an inheritance?
Choose how to invest that money to maximise the financial benefits.
The value of financial planning
First things first: If you don’t have an emergency pot, this is your top priority.
Before paying off debt or investing, make sure you always have a buffer in a secure savings account.
Once you have this established, you can look further into investing and making your money go further.
Personal investment options
- Save your tax refund in a term deposit for your children
Keen to look after the next generation? A popular investment choice for parents is a term deposit account. If you received a tax return this year and want to put it to good use, this can be a fantastic way to invest it.
A term deposit means your money is invested for an agreed rate of interest over a fixed amount of time, or term. Term deposits can be invested into a bank, building society or credit union.
Term deposits are also popular with investors wanting to secure a set return on investment rather than use the share market – or can be used in partnership with a share portfolio.
- Put that pay rise into super
Dreaming of a plush retirement? Do you imagine yourself sipping cocktails on the beach, or playing golf all day?
Putting extra money into your superannuation now, can reap huge benefits in the future - even if you only put in an extra $20 per week. The ripple effect of a small contribution now means that over time you could add thousands more into your retirement fund. Thanks to interest payments and accumulation over time, even a modest amount now really does add up.
- Bonus points for paying off credit cards or loans
Have you earned a financial bonus at work? Put it towards paying off your credit cards and get ahead. Just think of the interest saved!
Even if you can only pay off part of the loan, your interest repayments will drop as soon as you lower your outstanding balance. More money for you - rather than the banks profit.
- Inheritance onto your mortgage – or a whole new mortgage
Inheritance money can often come with a lot of mixed feelings or heavy responsibility. If it’s come from a close loved one, there can be all manner of emotions wrapped up in the choices you might make.
It’s okay to take your time and think calmly about how to spend the money.
However, a clever way to invest an inheritance is to pay off your existing home loan – then invest in more property.
Even if you cannot pay off your whole mortgage, you can use an offset account to leverage the investment. You can pay your home loan off quicker and pay less of your money in interest charges, while your offset account balance is still ready for you to use in an emergency.
- Invest in YOU!
Don’t forget yourself in all this. You could invest in yourself and improve your work prospects, health, and happiness.
Could you invest in a hobby - or even just a good book or heath class? Is there a work-related course or workshop that could help your career?
And finally, what about giving it away?
Yes, you can certainly look to give away part of your extra money. Look to give it to a person in need or a charity.
Contact us today for first-class financial planning
At Profacc Accountants & Financial Planning , we advise clients how best invest.
We help you understand the pros and cons of each investment idea, and how to look both short and long-term.