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The terms 'saving' and 'investing' are often used interchangeably but they are actually very different.
Saving is putting money aside for some short-term goals or as a back-up in case of an emergency. While relatively safe, savings are generally placed in a basic savings account earning relatively low rates of interest. The return on your savings may be outweighed by inflation, tax and account charges.
Investing, on the other hand, is putting your money to work strategically for the longer term, to build wealth and increase your financial security over time. Reinvesting dividends utilises the magic of compounding interest, making your money work even harder.
There are many factors that will determine the nature of the investments that are suitable for you. These include:
All investments carry a level of associated risk. Generally, those investments with higher rates of return over the long term have a greater level of risk over the short term. Similarly, those investments with lower risk usually have a lower long-term return.
Diversification is a strategy that spreads the 'risk' across a variety of different asset classes. Minimising the overall risk helps build the value of your portfolio.
There are many types of investments available to help you build your wealth:
Why not take a look at our ‘savings calculator’ which can give you an idea of how much your savings will be worth over time, so you can work out how much you need to save. Financial advice is not a 'one size fits all' approach. A successful financial plan is one that has been tailored specifically for you. Everyone's situation is different and a Bridges financial planner can help identify appropriate strategies and investments just for you.
Why not take a look at our ‘savings calculator’ which can give you an idea of how much your savings will be worth over time so you can work out how much you need to save. A financial planner can help you identify strategies to build your wealth and can provide advice tailored to your particular circumstances and goals.
For more tips on how to build your wealth view the Bridges online videos. They cover a variety of topics including 'Getting to know your super', 'Investment fundamentals' and 'Protecting your assets'.
To find out more about how financial planning could help you view the 'How a financial planner can help' online video.
Visit the Bridges website to find out more about Bridges and the vast range of services available.
Bridges Financial Services Pty Limited. ABN 60 003 474 977. ASX Participant. AFSL No. 240837. Part of the IOOF Group.
Disclaimer: In referring members to Bridges, Ford Co-operative Credit Society Limited does not accept liability or responsibility for any act or omission or advice provided by Bridges or its authorised Representatives. Bridges is part of the IOOF Group.