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Investing Basics

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Investing In Property: Investing Basics Part 6

The Money Mummy Guide to Investing is back and this week we are going to look at the risk and return characteristics of property investments and how these could fit into your overall investment strategy.

Now as Australian’s we are renown for being in love with property.  It is easy to see why, residential property has been an amazing performer, such that we now have some of the most expensive residential property in the world.  I will have to admit, I have a bias against Australian residential property as an investment, right now.  Simply because on most measures it is simply unaffordable.  How many people do you know who are struggling to buy a property?  So despite low interest rates, in my view there is little room for property prices to keep on climbing.   (I will also admit that I said this five years ago when we brought our family home, […]

By |July 4th, 2013|Investing Basics, Investment Types|0 Comments

What Are My Investment Choices? Investing Basics Part 4

So now you have an idea of your risk profile (tolerance) and you understand the relationship between risk and return, it’s time to look at characteristics of the broad asset classes or types of investment.  It is important to understand the different investment types as each category has different levels of expected risk and return.  Understanding what to expect from the different asset types will help you decide which categories of investments best suit your investment goals and your timeframe.

Generally speaking, there are considered five broad investment types or asset classes:

  1. Cash – investments like savings accounts, high interest accounts, bank bills
  2. Fixed Interest – includes government bonds and bond like securities issued by companies called hybrids
  3. Property – includes residential, retail, industrial and office properties.
  4. Australian Shares – are shares listed on the Australian Stock Exchange which cover many different sectors such as mining, healthcare, banking and retail.
  5. International Shares – are shares […]
By |May 9th, 2013|Investing Basics, Investment Types, Saving|2 Comments

Investment Basics: Risk and Return – The Money Mummy Guide to Investing Part 3

There is a trade off between risk and return.  Anyone who tells you any different is lying.  If I had a dollar, for every time a client told me about a no risk investment returning a guaranteed 20%, I would be on a beach somewhere, right now.  My advice is always the same, it is highly likely you are being scammed, run!

Remember risk is the chance that an investment won’t give you the return you expect.  It is the chance of losing some or even all of your investment.  Higher risk investments are generally associated with higher potential returns.  Low risk investments are generally associated with lower potential returns.  This is the risk/return trade off.  No one in their right mind would take on a high risk investment for a low potential return.    It makes no sense, the return you get at the end of the day does not compensate […]

By |May 2nd, 2013|Investing Basics, Risk|4 Comments

Investing Basics – Risk! The Money Mummy Guide To Investing – Part 2

Investing involves risk.  Each of us is unique, and understanding how much risk you can tolerate is fundamental to shaping your own investment strategy.  During the Global Financial Crisis, so many people forgot about or did not understand their own unique risk tolerance to their peril.  This is how we ended up with the travesty of Storm Financial convincing retirees, with no income, to borrow against their homes and invest into high risk investments on the stock market.  Different investments have different risk characteristics.  Understanding your risk tolerance, will help to decide which investments have the right fit for you.

So what is risk?  I define risk, in the investment sense, as the likelihood of losing money.  Be warned, strangely enough, many in my industry do not see it that way.  Fund Managers, people who invest your money in a range of investments on your behalf, often see risk as the risk of […]

By |April 24th, 2013|Investing Basics, Risk|2 Comments

Investing Basics – How Do I Get Started? The Money Mummy Guide to Investing Part 1

Yesterday I posted an article which showed that women are better than investors than men, but knowing you have the potential to be a good investor is of no use, unless you know where to start.  So welcome to the Money Mummy school of investing!  Every Thursday I am going to publish a post which guides you through the key principles that you need to know when making your first investment decision.  Successful investing is not difficult and has nothing to do with luck.  There are a few fundamental ideas that you need to know which will greatly increase your chances of success and help you avoid disasters.  So let’s get started.

Before you invest a cent, there is one very important thing you must do and that is make sure your “financial house” is in order.  You must be very clear about how much debt you owe and what type […]

By |April 18th, 2013|Debt, Investing Basics, Saving|2 Comments

Interview With Talking Mums Magazine

Hi All,

I did an interview with Talking Mums Magazine the other week about Money Mummy and where I would like it to go.  Click on Read More to see the You Tube video. Check it out!  Happy Investing!  Money Mummy

By |April 11th, 2013|Interviews, Investing Basics, The beginning|1 Comment