You don’t need a lot of money to get started
Contrary to popular opinion, you don’t need a lot of money to start investing in a managed fund. Some funds let you start with as little as $2,000 and then you can, over time, watch your money grow.
Managed funds, also known as unit trust or mutual funds, are available in various types. Some focus on a particular asset class, such as property, while others invest in a combination of assets (across shares, property, infrastructure, bonds and cash).
So, why invest in a managed fund?
1. They’re accessible, and affordable.
Managed Funds can be started with just a few thousand dollars, and they have the potential to grow substantially over time.
2. A managed fund is a diversified investment.
All investments are subject to risk. Diversification is a strategy that limits your exposure to big risks. Investments are cyclical, and subject to market volatility, and they are not always in synch with each other. What this means is, that if one investment is going through a period of loss, another will be growing. Diversification evens out the bumps and reduces the likelihood of significant financial loss.
3. Professional management.
Professional fund managers do the research and select and monitor your investments as well as provide regular reporting. They have access to a wide range of tools and resources and they work to get the best financial result for the fund.
4. You can liquidate.
Managed funds are liquid assets, which means that you can redeem part, or all, of your portfolio if you need to. There are usually no restrictions or exit fees and you can liquidate with relative ease, giving you access to your cash when you want it.
If you want to make your money work for you, then it’s worth considering a managed fund. Here Julie Nipperess from Money Link Financial Planners talks about why managed funds work well for most of her clients.
“Quite a few of my clients start managed funds because they’ve saved a few thousand dollars and put it into a savings account, but at the moment, they’re not getting substantial returns from the banks,” explains Julie. “They have the potential to get much better returns from a managed fund.”
“Time is everything in wealth creation,” explains Julie Nipperess. “You need to be prepared to invest for the medium to long term. But you don’t need a lot of money to get started, or to keep contributing. As little as fifty dollars a month makes a big difference over time – fifty dollars is not even as much as most of us spend on coffees.
“These funds work well as gifts for children too, with parents and grandparents and aunts and uncles all contributing at birthdays and Christmas or other special occasions. Then, when these children are in their 20s they have a decent sum of money, which can then give them a great head start, financially, to their adult life. If you can get them to take an interest in their fund, they can also learn some valuable and healthy financial habits along the way.”
To get started, email Julie.
Julie Nipperess is an Authorised Representative of MoneyLink Financial Planning Pty Ltd, an AFSL holder.
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