Investing

Investment

Money spent in order to gain a profitable return.

Short term goals

Investment goals set for a time frame of 1-3 years.

Medium term goals

Investment goals set for a time frame of 4-6 years.

Long term goals

Investment goals set for a time frame of over 7 years.

Personal savings

Using one’s own funds to finance an investment, avoiding loan interest.

Borrowing

Acquiring funds through loans for investments with the obligation to repay.

Fixed interest rate

A loan rate that remains the same throughout the loan period.

Variable interest rate

A loan rate that can fluctuate based on market conditions.

Superannuation

A compulsory retirement savings account funded by employer contributions.

Managed fund

A pool of money from multiple investors, managed by a professional fund manager.

Debenture

A long-term loan issued by a company at a fixed interest rate.

Unsecured notes

Loans to a company not backed by its assets, carrying a higher risk.

Cryptocurrency

Digital currency traded in the virtual world, such as Bitcoin.

Ethical investment

Investing based on social responsibility and environmental awareness.

Diversification

Spreading investments across various types to reduce risk.

Risk mitigation

Strategies to reduce potential threats to financial assets.

ASIC

Australian Securities and Investments Commission, the corporate regulator.

Banking Deregulation

The process of reducing government restrictions on banks, started in 1973.

Credit Union

A member-owned financial institution that provides banking services.

Building Societies

Member-owned institutions primarily aimed at home financing.

Income and expenditure account

A record of weekly income and spending to assess investment capacity.

Brokerage

The fee charged by a stockbroker for facilitating trades.

Term deposit

Funds deposited for a fixed term with a higher interest rate.

Dividends

Payments made to shareholders from a company’s profits.

Investment portfolio

A collection of investments held by an individual or entity.

Capital gains tax

Tax on profit from the sale of an asset.

Financing your investment

Utilizing personal savings, loans, or other sources to fund investment opportunities.

Investment Accounts

Accounts established to manage investments, such as brokerage accounts, retirement accounts, or tax-advantaged accounts.

Shares

Units of ownership in a company, representing a portion of the company's assets and earnings.

Property Investment

Acquiring real estate for rental income or capital appreciation.

Ethical Investing

Investment approach that considers social and environmental impacts, alongside financial returns.

Rate of Return Equation

Diversification

Strategy of spreading investments across different asset classes to minimize risk.

Risk Mitigation Strategies

Techniques employed to lessen the potential adverse effects of investment risks.

Role of Financial Services Industries

Entities that provide financial products, services, and advice to facilitate investment and manage finances.

Responsibilities of Lenders and Advisers

Obligations to act ethically and provide suitable advice, ensuring clients understand the risks involved.

Role of Government Agencies

Regulatory bodies that oversee financial markets and protect investors' interests.

Banking Deregulation

The reduction of government restrictions on the banking sector to encourage competition and efficiency.

Credit Unions

Member-owned financial cooperatives that offer banking services, typically with a focus on community benefits.

Building Societies

Not-for-profit organizations aimed at providing home financing, owned by their members.