How to invest money

People look to invest their money for a variety of reasons in the hope of making a financial return.

They may have a property dream, want to set their kids up for the future, or be looking to create additional savings to be able to live comfortably in retirement.

Whatever your goal is, it’s important to remember there are risks attached to investing as returns aren’t always guaranteed. You could make money, break even, or even lose money should your investment decrease in value.

With that in mind, here are some things to consider when thinking about how to invest money.

What investor style am I?

This calculator will demonstrate the relationship between risk and return, as well as the impact of your time horizon.

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What is investing?

Investing is when you buy or put your money into something, with the hope it will grow in value or provide you with another source of income, which will typically happen over time, not overnight.

Where can you invest?

Some things you might look to invest your money in may include, but won’t be limited to, some of the investments (which you could hold directly) or investment vehicles mentioned below.

Cash investments

If you put your money into cash investments (this includes things like savings accounts and term deposits), the returns will often be lower in comparison to other investments, however typically they will provide stable, low-risk income in the form of regular interest payments.

Shares and equities

If you purchase shares (also known as equities) in domestic or international companies, you’ll essentially be buying a piece of that company, making you a shareholder.

If the shares in the company that you own grow in value, the value of your investment will also grow, and you may receive a portion of the company’s profits in the form of dividends.

However, if the share price falls, the value of your investment will fall too. And, it’s also worth keeping in mind that you may not receive any dividends at all.


If you invest in property directly—whether it’s a piece of land or a building, something residential or commercial—you’ll generally receive a rental income, while potentially building equity in the property at the same time. This may allow you to secure additional finance to achieve other goals.

You may also wish to invest in property indirectly, which you could do through a property trust or some of the other investment vehicles mentioned below.

Managed funds

If you’re considering putting your money into some type of managed fund, your funds will be pooled with other investors, with a fund manager investing in a range of assets for you. This might include a mix of cash, shares and property for instance.

Your investment will be equal to a set number of units and anything earned and any growth will be divided between all investors depending on how many units each investor owns. Meanwhile, any income generated will be subject to tax based on the individual income tax rate of the owner.

Because investment returns are tied to movements in investment markets, it’s important to keep in mind that putting your money into a managed fund won’t necessarily guarantee you an income.

Investment Bonds

Similar to a managed fund, if you decide to put money into an investment bond (also known as an insurance or growth bond), your money will generally be pooled with money from other investors, with an investment manager making the day-to-day investment decisions.

What makes an investment bond different however, is in the way that earnings are taxed. Plus, there may be tax benefits where an investment bond is held for at least 10 years, so they’re often seen as a type of investment-savings plan for long-term investors.

If you pay a higher rate of tax on your income, an investment bond could be a tax-effective way to invest and save.


If you opt to put money into super, which is designed to help you save for your retirement, there may be tax benefits available that you might not get from other investments.

However, it is important to remember you typically won’t have access to your super until you reach a certain age and contribution limits also apply.

What are your goals?

Choosing the most suitable investment for you will generally come down to your goals, your attitude to risk and the time you have available to invest.

For instance, if you’re young, you may have more time to ride out market highs and lows, and therefore you may be willing to take on more risk in the hope of achieving higher returns.

If you’re closer to retirement on the other hand, you may prefer a more conservative approach to investing, as a decrease in investment value could be harder to recover from.

Different options may suit you at different ages, and depending on what responsibilities and other financial commitments you have currently.

Our online tool may be able to help you in determining what investor style you are if you’d like to know more.

Other things to think about

When you’re thinking about investing, it’s important to look into any potential legal and tax implications, as these can vary a lot depending on the type of investment you’re looking at.

You may also want to consider a mix of investments as this could reduce your risk and help smooth out short-term ups and downs when it comes to the potential returns you may be able to make.

Chat to your financial adviser before making any decisions to ensure you’re across any factors worth weighing up. If you don’t have an adviser but would like a bit more information, give AMP a call on 131 267 or use our online search function if you’d like to find an adviser near you.

In the meantime, if you’re interested in seeing what investments AMP has to offer, check out our product info page

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Any advice in this page is general in nature and is provided by AMP Life Limited ABN 84 079 300 379 (AMP Life). The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on this advice, you should consider the appropriateness of this advice having regard to those matters.

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