Investments

Investments

Investments

Investing is the process of putting money into a business or commercial venture (like property, or shares) with the expectation of making a profit. Put simply, investing is a way of making your money work for you. Investing can be a good way to help you increase your personal financial rewards.

In fewer words, you spend money to make money.

Investments

Investing money means taking a risk. Taking an investment risk means there is a possibility of losing money. Some investments are riskier than others. Putting your money in an Australian deposit-taking institution such as a bank is generally considered low risk.

Investing in the share market or in property is considered to carry a higher risk. Higher investment risks often come with the potential to earn higher rewards, but there is also the risk for higher losses. 

Multiple Choice

Is investing a guaranteed way to make money?

• Yes

• No

Multiple Choice

Is opening up a franchise like McDonalds or Boost Juice an investment?

• Yes

• No

Multiple Choice

Is purchasing land or real estate considered to be an investment?

• Yes

• No

Multiple Choice

There is only one type of investment someone can make. True or False

• True

• False

Types of Investments

Types of Investments

Types of Investments

Types of Investments

Multiple Choice

What is another name for investing in a bank or bank account

• A good idea

• Interest

• Interesting

• Interest earning

Multiple Choice

What is another name for stocks or shares?

• Equities

• Equals

• Equalties

• Assets

Multiple Choice

A dividend is a...

• the company takes back their earnings from a class of its shareholders

• distribution of some of a company's earnings to a class of its shareholders

Multiple Select

Superannuation is...

• money set aside for when you retire

• an investment

• something you contribute your own money to

Multiple Choice

Is superannuation taxed higher or lower than other investments?

• Higher

• Lower

Assess whether the following investments are too high risk for their investors. Be prepared to justify your answer.

- Janette has $100 000 to invest but the thought of losing any of it means she can’t even sleep at night.

Julian wants to make a reasonable amount of money from his investments and is not overly concerned if his investments lose value in the short term.

Chris has $20 000 put aside to go overseas. He decides to invest the money for a year, but cannot bear to think his investment could lose money, which might mean he would have to cancel his trip. 

Read each of the following quotes. Then, explain the point the author is making.

a)‘In the long run, it’s not just how much money you make that will determine your future prosperity. It’s how much of that money you put to work by saving it and investing it.’

b)‘If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.’

c)‘Behind every stock is a company. Find out what it’s doing.’

d)‘If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.’

Investing in Australian businesses

An annual report is a company's yearly report to shareholders, documenting its activities and finances in the previous financial year.

Open Ended

Why would a document, such as an annual report, be important for potential investors to read before investing?