We often come across the word saving and investing multiple times in our interactions.
Whether it is saving for a long term goal such as buying a home; a trust fund for your child; an emergency fund or a short one like a vacation or a new couch. During the current Covid pandemic, the importance of having some money saved away in order to cushion ourselves from uncertainty has come to the fore. While saving is a vital stepping stone towards financial freedom, investing is a better way to get our money to grow for us when we aren’t in use of it.
When it comes to investments, the interest rate is higher than you’d get if you only put your money in a savings account. Investments are roughly broken down into two categories: low-risk investments and high-risk investments. Low-risk investments require less commitment as you can pull out your money at any time but normally have a lower return than high-risk investment returns. However, with the low-risk investments, there is a guarantee that you will receive back your starting capital plus some interest. These low-risk investments include; Government bonds and company papers.
On the other hand, high-risk investments require very high, long term commitment in order to see the greater benefit. Such as; investing in stocks. While these kinds of investments can be very risky due to short term market fluctuations that can see an investment like stocks fall, they can be highly rewarding once they are allowed to mature for a very long time. This ensures that the short term losses can be covered by the gains in the long term as they withstand the test of time.
In order to be able to dabble in high-risk investments, it is important to understand the process by starting out with low-risk investments. Not only is one able to gain some knowledge but also measure their patience and commitment levels. Additionally, one is able to pool a good amount of money to invest in high-risk investments. Having money readily available when the opportunity arises can put you in an advantaged position. Plus, the higher rates than investments offer to encourage one to improve their financial discipline when it comes to saving and investing. This is where Unit Trusts can come in handy to aid your investment goals.
Similarly, Unit Trust Funds have low, medium and high-risk investment channels that allow one to invest in Treasury Bills, company papers, government bonds and corporate bonds. At UAP Old Mutual, we offer these Unit Trust Funds whether as a single applicant, joint account holders or as corporate clients. We can help you find the best unit fund for you depending on your needs. It is best to have a goal in mind, know your risk appetite in case there is a short term fall in the market as well as knowing your timeline to reach the goal you’re aiming for.
