Making Smart Investments
While working and earning a salary is a basic source of income for many, having more than one source of income provides a sense of security. This is because it acts as a backup plan in case of any eventuality. It also can increase family wealth, act as a source of income after retirement, or act as a store of wealth for one’s future generations. A second source of income usually is a result of other investments. For some, this could be saving one’s money in a bank account, while receiving interest, which increases the money held in the bank. For others, investment could be the purchase of property or the buying of shares in the stock market. A person’s choice between these options depends on the return he gets and the comparison of gain or loss between these factors. It also depends on factors prevailing in the country, for example the interest rate, the tax rates, the inflation rate etc. For example, if the interest rate of a country is less than the inflation rate, then there is no point saving the money in a bank as inflation dilutes the value of money.
For a proper gain to be made, the interest rate must be more than the inflation rate. Similarly if tax rates on income are higher than the interest rates, again more money is lost rather than gained. Investing in the stock market is another massive source of income provided the buyer has sufficient knowledge on the way the stock market works. Given the fact that the stock market is often unpredictable and that there may be unforeseen fluctuations in the value of shares, an investor must consult a stock broker, who will be able to help the investor to make smart decisions on where to invest his money, as stock brokers have experience on what stock will give the highest returns, and are often also able of predicting whether the value will rise or fall in the future.
If one decides to invest in property, which is a smart decision considering that land appreciates over time, then they will have to make use of property advocate Melbourne, who will advise them on what property will appreciate the most over time, which is a factor that often depends on location, and will also negotiate with sellers on behalf of the buyer. A buyer must beware of vendor advocacy, which is a practice that may be used in order to tilt the favour to the side of the sellers, in ways which may include selling the land at a higher price of making deals and signing contracts which will benefit the seller. These advocates will be involved in the negotiations.Similarly, it is also advisable to consult well respected, experienced stock brokers and in terms of other investments, to make use of a financial consultant.