Savings + Investments
Let’s identify your risk profile!
How To Start Investing In Australia
There are a few different ways you can make investments that give your savings a boost and overall grow your wealth. The first place to start is to identify your risk profile. Investing is considered risky, this is because there is uncertainty around how the investment will perform over the short and long term. The risk scale will determine whether you are more of a conservative investor or an aggressive investor.
Once we have addressed your risk profile, we take the time to individually tailor your investment strategy to match that risk. The most common types of investments are shares, managed funds, term deposits and property.
Want to find out what kind of investor you are and the best investment strategy for you?
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Free investing Guide
Download our free guide to help identify your ideal investment strategy and to understand the types of investments you can have in your portfolio.
SAVINGS + INVESTMENT FAQS
Some habits and behaviours that can help you save money or save money quicker:
- Automate your money by setting up regular transactions into savings and spending accounts;
- Create a budget that works for you;
- Cook meals at home, instead of eating out;
- Use public transport or carpool to save on transportation costs;
- Take advantage of discounts and loyalty programs;
- Pay off high-interest debt(s) as soon as possible; and
- Consider cutting subscription services you don’t use.
There isn’t a single “best” investment option in Australia as it depends on your individual financial goals and your individual risk tolerance.
The amount of money you should save each month depends on a number of considerations such as your individual income, financial circumstances, goals, and expenses.
A general starting point can be to try and save at least 20% of your income, but this can vary and there is no one size fits all approach. Â
It can be helpful to sit down and review your monthly income, expenses, and financial goals to determine a realistic saving amount that suits your individual situation.
Investing in Australia has various tax implications that depend on the type of investment and your individual circumstances. Some key points to consider are:
- Capital Gains Tax (CGT): when you sell an investment, such as shares or real estate, and make a profit (a capital gain), you may be liable for CGT.
- Dividend Income: if you receive dividends from Australian companies, they will generally be included in your taxable income. However, you may be eligible for a tax credit (franking credit) to offset your personal income tax liability if the dividends have been imputed.
- Interest Income: interest earned from bank accounts, term deposits, or bonds is generally included as taxable income.
- Rental Income: if you invest in rental properties, the income received from rent is taxable. You can also claim deductions for expenses related to the property, such as repairs and maintenance.
- Superannuation: contributions to superannuation may have tax advantages, such as concessional (pre-tax) contributions and favourable tax treatment of investment earnings within the superannuation fund.
The best investment strategy is unique to each individual investor, depending on their goals, risk tolerance, time horizon, and their overall financial situation.
Generally, if you have a diversified portfolio, contribute consistently, have a longer-term perspective, and are periodically reviewing your investment strategy, you will be on the right path to having a successful investment strategy that helps you achieve your goals.
A risk profile is an assessment of an individual investor’s willingness and ability to take on investment risks and helps determine a balance between your tolerance for risk and the potential returns you are aiming to achieve.
Being aware of your risk profile means you can tailor your financial goals and investment strategies to the level of risk you are comfortable being exposed to, helping you make more informed investment decisions.
Want to know more about risk profiles? Check out this blog we have put together.
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