The followings are some investment
instruments to grow your money:
instruments to grow your money:
1. Savings Instruments
Fixed deposit is the safest instrument, however, it has the least
returns.
Cash Value Life Insurance includes a forced savings element, which
adds to the cost of life insurance. The build-up of cash is tax
deferred and can be borrowed from the policy. The primary
purpose of insurance, however, is protection against risk of loss
rather than the accumulation of savings.
2. Stocks
When you own shares of stock you become part owner of a
company. If the company does well, the value of your stock should
go up over time. If the company does not do well, the value of
your investment will decrease. Companies distribute a portion of
their profits to shareholders as dividends.
3. Unit Trust
A unit trust fund invests the pooled money of its shareholders in
various types of investments. The fund manager buys and sells
securities for the fund's shareholders. Unit trusts are not risk free.
Their values rise and fall along with the securities in the fund.
Benefits of unit trusts for the beginning investor include:
• diversification
• professional management
• relatively low cost shares
• liquidity and convenience (easy to buy and sell shares)
Each unit trust fund has an objective, which determines the types
of securities it invests in. The fund objectives are stated clearly in
the prospectus. You should always obtain and read a fund's
prospectus before investing. For example, a fund objective may be
"growth and capital preservation." This fund might own high
quality stocks in large well-known companies. The details of how
the manager intends to implement this strategy would be
described in the prospectus.
The shares in a unit trust are priced by dividing the total value of
the securities in the fund, less expense, by the number of shares
issued. As the value of the securities in the fund goes up or down,
the value of the shares changes accordingly.
4. Real Estate
Home ownership is an investment. Like other investments, homes
can appreciate in value and serve as a hedge against inflation.
Houses can also drop in value and fail to keep pace with inflation.
Direct ownership of rental units and commercial buildings takes
considerable time, skill, knowledge, and risk tolerance on the part
of the individual owner. Purchasing a rental property, for example,
without full knowledge and experience could cause losses far
exceeding the original investment.
5. Collectibles
Antiques, stamps, precious metals or gems pay no interest or
dividends and depend on an increase in value over time for the
return on the investment. The rewards as well as the losses of
owning collectibles can be great. Financial advisors caution against
collectibles because there is no regulated marketplace, liquidity can
be a problem, information regarding pricing is almost non-existent,
and fraud is rampant in markets for coins, gems, synthetic gems
and precious metals.
| For an endless streams of income, you need a financial plan |
"Wealth Creation Through Financial Planning"
