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Superannuation isn't the only way to save for retirement, and many money advisers recommend diversifying your investments to give you better security for retirement and give you a better chance to live large in retirement. There are endless options for investment, so it's important to do your research before handing over any cash.
Capital growth investments refer to long term investments, meaning over seven years, such as property or shares. Good growth investments will pay dividends (or rent, in the case of property), which you will be able to use to spend on necessities, save, or reinvest.
Investing in property is a popular way to set yourself up for retirement. Investment properties can offer tax breaks and may allow you to benefit from negative gearing and depreciation allowances as well. One downside of investing in property is that, especially in the case of residential property, it may require a lot of upkeep and effort to manage. Another downside is the risk. Making a large purchase like a property for an investment means your risk of losing a large sum is increased.
Investing in shares can be less risky, as you can diversify your portfolio by investing in a number of different companies. Shares will usually offer dividends which you will receive a few times a year, and use as income. Shares are a more flexible investment than property because you are able to invest smaller amounts of money at a time. There is always a risk when investing in shares, however, as the market can crash dramatically overnight, as was seen in the Global Financial Crisis.
If you are nervous about making the right decision for your retirement, you may prefer to hand over the reigns to a professional. Employing an investment manager means you can hand over the responsibility to someone who knows what the best investments will be for your situation. Be sure to do sufficient research before selecting your investment manager, or speak to a friend who has done the same thing for a recommendation.
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