How Should You Invest Your Savings + Surplus Income?

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How Should You Invest Your Savings + Surplus Income?

Written by: Chris Graham l Advisory Team


Making Your Money Work Harder For You

As the economy continues to shift and evolve, it’s important to consider how you can best invest your savings and surplus income.  Investing is one of the most effective ways to build wealth over time, but it can be difficult to know where to start.  With rising interest rates and uncertainty surrounding the global economy, it has become more important than ever to make your money work harder for you.  Whether you are looking to grow your wealth, save for a specific goal, or plan for retirement, investing can help you achieve your financial goals.  In this article, we’ll explore some of the key considerations that you should keep in mind when investing your savings and your surplus income.

Setting Clear Financial Goals + The Importance of Diversification

Setting Clear Financial Goals

The first step in investing is to set clear financial goals.  For example, you may be looking to save for retirement, purchase a home, or fund your children’s education.  Understanding your goals can help you choose the best investment options for your needs.

Before you start investing, it’s also important to assess your financial situation.  Take stock of your current savings, income, expenses, and debts.  Understand your risk tolerance and your investment goals.  This will help you determine how much you can afford to invest and what kind of investments are appropriate for you.

Investment Risk + The Importance of Diversification

Next, it’s important to consider your risk tolerance.  This refers to how much risk you’re willing to take on to potentially earn higher returns.  Some investments, such as shares and property, are generally considered riskier than others, such as bonds and fixed-interest investments.  If you’re comfortable taking more risks, you may want to consider investing in shares or property.  However, if you prefer a more conservative approach, bonds or fixed-interest investments may be a better fit.

Investing in a diversified portfolio can help reduce the risk and increase returns over the long term.  Diversification means investing in a range of different assets, such as shares, property, and fixed interest.  A diversified portfolio can help you weather market volatility and avoid the risk of putting all your eggs in one basket.  This means spreading your investments across different asset classes, industries, and regions to reduce the risk of loss.  For example, you might invest in a mix of shares, bonds, and property, and within each category, you might choose investments from different companies and geographic regions.

Want to learn more about your Risk Profile?  Check out this blog we have previously put together to get a better understanding: Risk Profile: What You Need To Know Before Investing.

Investment Timeframes + The Risks and Rewards of Investing

Your investment timeframe will depend on your goals.  if you are investing for the short term, you may want to consider low-risk investments such as term deposits or bonds.  If you are investing for the long term, you may want to consider higher-risk investments such as shares or property.

All investments come with some level of risk, and it’s important to understand the potential risks and rewards of each investment.  Shares and property investments can be high-risk, but they also have the potential for high returns.  Fixed-interest investments are generally low-risk but have a lower potential for returns.

What Investment Options Are Out There?

When it comes to choosing specific investments, there is a wide range of options available.  Here are some of the most common investment types that you may consider:


Shares represent ownership in a publicly traded company.  When you purchase a share, you’re buying a share of that company’s profits and losses.  Shares are generally considered to be riskier investments, but they also have the potential for higher returns over the long term.  When you own shares, you have the potential to earn dividends and capital gains.

Fixed Interest Investments

Fixed-interest investments include bonds and term deposits.  These investments provide a fixed rate of return over a set period.  Bonds and debt securities issued by companies, governments, and other organisations.  When you purchase a bond, you’re essentially loaning money to the issuer.  Bonds and term deposits are generally considered to be lower-risk investments than shares, but they also have lower potential returns.

Managed Funds

Managed funds are investment vehicles that pool money from multiple investors to purchase a diversified portfolio of investments, such as shares, property, and fixed interest.  Managed funds are often considered to be a good option for beginner investors, as they offer diversification and professional management.

Exchange-traded Funds (ETFs)

Exchange-traded funds are similar to managed funds, but they’re traded on stock exchanges like individual shares.  ETFs are often considered to be a low-cost way to invest in a diversified portfolio of securities.  ETFs are similar to managed funds, but they are traded on the stock exchange like shares.


Property can be a good investment option for those looking for long-term appreciation and potential rental income.  Investors can purchase physical properties or invest in real estate investment trusts (REITs) that own and manage properties.


Commodities are raw materials or agricultural products that are traded on global markets.  Some investors may choose to invest in commodities as a way to diversify their portfolios.

It’s important to note that no investment is completely risk-free, and past performance is not a guarantee of future returns.  It’s also important to be mindful of fees and expenses associated with investing, as these can eat into your returns over time.  Furthermore, investment returns are subject to tax, and it’s important to understand the impact of taxes on your investment returns.  Always do your research and consider working with a financial adviser, like the team at Canny Advisory who can help guide you through the investing process.

Additional Tips to Keep In Mind

In addition to investing, you should also consider other strategies for building wealth and achieving your financial goals.  Here are some additional tips to keep in mind:


Creating and sticking to a budget can help you save money and live within your means.  This can free up extra cash that you can put towards investments or other financial goals.

Paying Off High-Interest Debt

Paying off high-interest debt is a crucial component of any sound financial plan.  High-interest debt, such as credit card balances or personal loans, can quickly accumulate and lead to significant financial strain.  By paying off this debt, you not only reduce the total amount you owe but also free up more of your income for other financial goals and investment opportunities.  By prioritising debt repayment, you can improve your financial standing and create a strong foundation for achieving your long-term financial goals.

Canny Advisory, the Advisory Firm Geelong Trusts

Investing your savings and surplus income can help you achieve your financial goals and secure your financial future.  Investing can be more complex, and it’s important to seek professional advice before many any investment decisions.

A financial adviser can help you assess your financial situation, determine your investment goals, and choose the right investments for you.  By understanding your financial situation, choosing a diversified investment portfolio, and seeking professional advice, you can make your money work harder for you.

Get in touch with our team today, to start the ball rolling!

Canny Advisory Financial Adviser Chris Graham stands centre in the photograph wearing a deep blue suit, holding his hands on the edges of his jacket

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