WHY INVEST?

By very definition, meaning: put money, effort or time etc. into something to gain an advantage or make a profit.

1) To put (money) into, property, shares, financial schemes, or a commercial venture with the expectation of achieving a profit or gain, an additional income or appreciation in value.

2) Endow or provide someone or something with (an attribute or quality) to reap a reward.

Investing in your children’s education by placing them in a better school or providing them with additional tuition would seem logical. The expectation of giving them a better chance or gain an advantage over other students would be your reward. Much as an athlete would invest in their training regime, facilities, diet and lifestyle to improve their overall performance.

Investing with money is the same. It requires action, an opportunity, the understanding of risk, time and then ultimately the reward.

We have all heard the saying “Money makes Money” this can be true but it is by no means certain. So why invest? To gain something is normally the answer. However, when money is required that will involve some type of risk. Minimising the risk involved is an attitude of mind. What to some is a risk to others is normal or not considered such a risk but why? Probably because they completely understand the risk and have considered its chances of success. The odds appear to be in their favour. Therefore, a calculated risk on the part of the investor. Risk verses reward must be considered also as the gain needs to be worthy of that individual’s time or money. Investing isn’t easy and greed, lack of understanding/knowledge, money or time is often the difference between success and failure.

TYPE’S OF INVESTMENT

  • BONDS
  • STOCKS
  • INVESTMENT FUNDS
  • ANNUITIES
  • SAVINGS
  • ISA’s
  • RETIREMENT
  • OPTIONS
  • DIVIDENDS
  • PEER TO PEER LENDING
  • CROWD FUNDING
  • COMMODITY FUTURES
  • SECURITY FUTURES
  • INSURANCE
  • BONDS

In exchange for interest the investor loans an organisation money over a known term. On the maturity date of the bond it is paid up. The initial sum loaned plus the agreed interest.

STOCKS

Company stock is purchased to which you own a piece of that company known as a share. The potential for short and/or long-term growth depends on several factors including but not limited to company size, type, history, performance andknown influences.

INVESTMENT FUNDS

A fund is a pool of money from multiple investors to fund a specific investment strategy. They offer diversification by way of strategies, styles or professional management. Options such as exchange traded funds, close end funds or mutual funds but not all funds are the same.

ANNUITIES

A contract between the investor and the insurance company with a promise to make periodic payments. Payments can be made some time in the future called a deferred annuity or start immediately called an immediate annuity.

SAVINGS

A plan to put an amount of money into an account normally with a purpose in mind either a specific amount regularly over a set period or on a random basis as and when possible. Certain accounts offer incentives by way of interest payable but vary from one account to another.

ISA’s

An Individual Savings Account (in the UK) which is a scheme to save, free from tax on interest and capital gains. Criteria may change on an annual basis namely the principle sum and allowed withdrawals. There are now new innovative and lifetime ISA’s available.

RETIREMENT

When planning for our old age retirement plans have certain rules and regulations. Criteria must be met to satisfy that the plan is suitable for retiring. Once the capital has been paid in it cannot be paid out to the investor until the minimum retirement age applicable.

OPTIONS

Contracts to give the purchaser the right, but not the obligation to buy or sell a security normally at a fixed price within a specific time.

DIVIDENDS

A distribution of a portion of a company’s earnings, profit or stock. Paid out in cash called cash dividends or distribution of stock called stock dividends, whereby additional stock shares are distributed to its shareholders.

PEER TO PEER LENDING (P2P)

An online service matching lenders with borrowers to lend money to individuals or businesses.

CROWDFUNDING

A relatively new idea of funding a project or venture by raising money from a large quantity of people contributing a relatively small amount of money, normally via internet based businesses.

COMMODITY FUTURES

The contracts are agreements to buy or sell a commodity and a specific quantity at a specified price on a known date in the future. Normally trading is executed by using a commodity exchange platform with very limited exceptions. Typical commodities are currencies and financial instruments or oil, grain, animal products and precious metals.

SECURITY FUTURES

Federal regulations permit trading in future contracts on single stocks and certain security indices.

INSURANCE

Normally in various forms of Life Insurance. Policies include Whole Life, Term Life and Universal Life. Variations include, Variable Universal Life and Variable Life Insurance. They are all considered as securities.

WE RECOMMEND THAT YOU DO NOT PARTICIPATE IN ANY FORM OF INVESTMENT OR INVESTMENTS WITHOUT CONDUCTING YOUR OWN DUE DILIGENCE, RISK ASSESSMENT AND PRECAUTIONARY MEASURES TO SAFEGAURD YOURSELF BEFOREHAND. YOU SHOULD ALSO SEEK LEGAL OR AUTHORISED ADVICE VIA AN APPROPRIATELY OR REGULATED INDEPENDENT FINANCIAL ADVISER.