Questions to ask
Once you understand the basic principles of investing, it's time to answer some questions.
1. What are your goals?
What do you intend to do with the money you earn from your investment(s) and what's the timeframe you want to achieve it in? You may have a number of goals with different timeframes. Set them all out and put them in order of priority.
2. What sort of investor are you?
What is your approach to investing? Are you conservative, aggressive or somewhere in between? The answer will reflect a combination of your attitude to risk and your time frame.
3. What investment options will suit me?
Not all investment options suit everyone. You need to match your investment options to the sort of investor you are.
4. How do you want to manage your investments?
Do you want to invest the money yourself or do you want a fund manager or broker to manage it for you?
5. Do you want to diversify your investments?
Do you want to invest in a variety of asset classes and markets or invest in just one? Do you realise you can do both?
There are many options and ways of diversifying.
6. Do you want to invest inside or outside superannuation?
Generally, the investment options are similar regardless of whether you invest inside or outside of super. The main differences are in the tax implications and when you can access your money.
You may find that once you set your goals and understand the types of investments which suit you, many of these questions will answer themselves. That should give you more time and better direction to find the right answers.