Financial Investments

Life Orientation

What are Financial Investments?

• Assets purchased to generate income or appreciate in value over time.

• Aimed at long- term growth, unlike saving for a short-term goals.

• Includes stocks, bonds, mutual funds, real estate, etc.

Why Invest?

• Wealth Accumulation: Grow your money faster than inflation erodes savings.

• Financial Goals: Helps reach long term goals(i.e. retirement, house) quicker.

• Passive Income: Some investment (e.g., dividends, interest) generate income without active work.

Types of Investments

• Stocks

• Bonds

• Mutual Funds & ETFs

• Real Estate

Stocks

Ownership in a company, high return potential but higher risk.

Bonds

Loans to governments or corporations, lower risk, lower return.

Mutual Funds & ETFs

Pool money to invest in a diversified portfolio. ETFs track indices, while mutual funds are actively managed.

Real Estate

Property investments for rental income or capital gains, requires large capital and maintenance.

Risk

Possibility of losing money, higher potential return usually means higher risk.

Risk Tolerance:

Your willingness to take on risk, influenced by financial goals and investments timeline.

Diversification:

Spreading investments across different assets to reduce risk.

Research and due diligence

Thoroughly research investments to make informed decisions.