U3 Investing

Question 1

why invest

Answer 1

• the value of your money will decrease overtime, because of inflation
• Investing can be a way of adding extra income, paying for a large expense in the future
• With research, smart moves and some luck, investing could also change your life for the better

Question 2

Diversification

Answer 2

spread out the risk of their investments, but putting their money into different areas

Question 3

Passive Income

Answer 3

• All investments require some sort of work
• Some are more ‘passive’ (hands off) than others

Question 4

Investment property

Answer 4

• Self managed can be a part time - full time job
• A property management firm can be hired, but will charge 8% of month rent (pre-tax) and will forward all bills to you.
• If there are unfilled vacancies or issues not fixed, it’s your problem.
• You will will still need to get ‘eyes on’ the property and review the income/expense spreadsheets