These could include going on overseas trips, buying a new car, owning your first home or paying for your children’s education.
Even if you’re not sure exactly where the future will take you, you probably have an idea of the kind of lifestyle you’d like to be living and how much money you might need to do it.
Investing may help you to achieve these goals and open the door to new opportunities.
You might not realise it, but you're already an investor.
You probably already have a portion of your money invested in shares, bonds or other asset classes.
This is because if you’re working in Australia, you’re most likely receiving superannuation payments from your employer. These payments are made into a superannuation fund, which then invests your money and helps you grow your savings for retirement.
You can also invest outside of your superannuation fund. Some of the most common ways to do this include:
- Buying shares
- Buying an investment property
- Investing in a managed fund
Keep your money working for you
If you don’t invest, you may find your savings buy less over time as the cost of goods and services increases. These price rises are known as inflation. A little inflation is considered a good thing for an economy, but not a lot.
Australia targets an annual inflation growth rate of 2–3%, meaning your overall cost of living should not increase by more than this amount each year.
If your savings or investments grow at a rate that is less than inflation, then ultimately that dollar value can buy less.
Past performance is no guarantee of future performance, but some types of investments, historically have shown higher rates of growth than others.
You have to think about what level of risk you are happy to take on, however, as often, the chance of higher returns can mean there is a increased risk that you could also lose money.