Investment options for low income earners – Newcastle Advertiser

Financial research has established that financial wellbeing is a long term commitment. This implies that both high and low income earners can take a decisive step to invest over time and reap the returns when the time is due. Here are some investment options low income earners can consider for investment.

Retirement fund

Retirement funds provide a safety net for those who are employed. The key to this fund is to start investing as early as possible. Your retirement savings and returns are dependent on your ability to be patient.Therefore its advisable to leave the contributions you make every month undisturbed for a long period of time.

Unit trusts

A unit trust is a smart way to save and beat inflation. As the cost of living increases, you need your money to increase with inflation, and investing in a unit trust allows your money to do just that. A unit trust pools money from many investors, to invest in assets, namely shares, bonds or property. Instead of having to select individual investments yourself in hard to reach markets, a unit trust offers you exposure to a range of assets.

Stokvel

A Stokvel is a book based savings model made up of a group of individuals with similar goals, which allow them to save for a common purpose. Originally these were informal savings agreements, but it has evolved and banks are now offering savings products specifically designed for Stokvels. Through a Stokvel, you can contribute fixed sums of money to a central fund on a weekly, fortnightly or monthly basis with a better return on savings and interest rates.

Stock Market

Stock markets are often perceived to be investment avenues for the rich. On the contrary, stock markets have a variety of products which can help you reach your desired goals. Stock markets provide some of the highest returns on investment through dividends and stocks are highly liquid.

Property

Investing in property is often the safer and less volatile choice. For low income owners, banks and other financial institutions are always ready to provide finance. Even with market dynamics fluctuations such as interest rates, people will always need to have a home, and no matter how big the dip, you won’t lose everything completely – the home is still there and it’s yours.

The investment options listed above should assist you to start preparing for the future.

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