Where to invest instead of property
Property may be a popular path to wealth, but it's certainly not the only investment available - and it's not even our favourite money-maker.That title goes to shares.
According to the Australian Securities Exchange (ASX), more than 7 million Aussies own ASX-listed investments, while just 2 million of us own a rental property.
If you're keen to invest, but not so enthusiastic about property, here are five other investments that may be worth a look.
1. Shares
When you invest in shares you become a part-owner of the business. This lets you have a stake in the company's growth if the shares rise in value, and pocket a slice of any profits in the form of dividends.
With over 2700 companies listed on the ASX, there is no shortage of shares to choose from.
How to invest: You'll need to open an account with an online broker to buy/sell ASX-listed shares.
Minimum investment: The minimum order size for a first trade on the ASX is $500. Overseas sharemarkets such as the New York Stock Exchange and tech-based NASDAQ, have no minimum requirement.
2. Managed funds
Managed funds pool the money of like-minded investors, and invest the capital in line with the fund's overall theme - anything from Aussie shares to commodities or currencies.
Funds can be listed on the ASX or unlisted.
Listed funds, known as exchange traded funds (ETFs), often follow a given index rather than trying to beat the market. As a result, they typically charge much lower fees than unlisted funds.
How to invest: To invest in ETFs you'll need an account with an online broker. For unlisted funds, apply direct to the fund manager or jump onto the ASX mFund service.
Minimum investment: ETFs have a minimum first trade of $500. Unlisted funds have varying initial investment requirements, some starting at $1000.
3. A-REITs
If you're interested in investing in commercial property a low-cost option is Australian Real Estate Investment Trusts (A-REITs) listed on the ASX. They provide exposure to office blocks, shopping malls, hotels and industrial estates, and can be managed by household names such as Mirvac, Stockland and Charter Hall.
How to invest: Head to your online broker to start trading A-REITs.
Minimum investment: The minimum initial investment is generally $500.
4. Fixed income
Fixed income investments essentially involve you - the investor, lending money for a set period of time to a government, a large corporation, or even a non-bank lender. The pay-off is a fixed return paid over regular intervals. Unlike term deposits offered by banks, your money is not government guaranteed.
How to invest: Government and corporate bonds are traded on the ASX, or check out investment opportunities available through non-bank lenders.
Minimum investment: From as little as $10 with some non-bank lenders.
5. Equity crowdfunding
Equity crowdfunding lets you buy a stake in a start-up business. The range of ventures available spans every conceivable industry. The common thread is that this is highly speculative investing.
If the business fails, you lose your money. Even if it grows, the value of your shareholding can be reduced if more shares are issued. As young companies typically reinvest profits back into the business, any sort of dividend is unlikely in the early years.
How to invest: Head to equity crowdfunding platforms like Venture Crowd, OnMarket or Birchal.
Minimum investment: By law, retail investors are limited to a maximum of $10,000 per company, but with platforms such as Birchal you can get started with as little as $50.
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