5 Investments You Need To Make

Before you start, you’ll need to consider the length of time you want to invest for and how much risk you’re willing to take. Higher-risk options have larger returns, but are generally better long-term rather than short-term.
 

Investment: 4%-8% of your pay
Term: Long
Risk: Varies
 

Getting paid to save money? Sounds too good to be true! But that’s exactly what Kiwisaver is about. When you join, the government gives you $1000 towards your savings and your employer also makes contributions along the way. You choose to set aside either 4% or 8% of your pay and decide how it’s invested—there are safe options (with lower returns) or higher-risk options (with higher returns). We like Westpac's Kiwisaver options - find out more at www.westpac.co.nz.

The only downside is that Kiwisaver is a long-term investment. You won’t be able to withdraw your money unless you’re making a deposit on a house, moving overseas, suffering financial hardship, or retiring. However, the extra contributions (free money!) make it something worth considering. Visit www.kiwisaver.govt.nz for more details.

 

2: Savings account
Investment: Any
Term: Any
Risk: Very low

If you’re after an investment option that doesn’t tie up your money long-term, check out the different types of savings accounts offered by your bank. All offer saving accounts with higher rates of interest than your daily cheque account.

Transferring any spare dollars into an account such as a Simple Saver with Westpac will yield over twice as much interest per year as your ordinary account. What’s more, if something comes up (like must-have Kate Sylvester dress, for instance) you can transfer your money out at any time.

 

3: Fixed term investments

Cost: $2000 and up
Term: Short-Middle
Risk: Very low

Got a bit of money sitting in that savings account? Want to do something else with it? You might want to consider a fixed term investment. Again, this can be done through your bank, meaning it’s a very safe investment option. Fixed term investments generally offer a higher rate of interest than savings accounts, but you won’t be able to access your money while you’re investing - generally between 30 days and 5 years.

Again, the longer the time, the higher the interest rate will be. This is a good option if you’re saving, perhaps for that car, a house deposit or OE, as not only does your money grow but you don’t have the temptation of being able to withdraw it.

Cost: From $6000 per year
Term: At least three years
Risk: Very low

Let’s face it, you make more money if you have a degree. Studies in the US show that graduates earn almost twice as much on average than those with just a high school qualification. Sure, it’s three years of your life, but when you factor in the future salary increase, student deals, exposure to potential employers, and long summer breaks, it doesn’t seem that bad at all!
 
Most degrees involve three years of full-time study, and you’ll generally pay around $6000 per year—but remember that this can be covered by an interest-free student loan. Visit Studylink for more details.

5: Managed funds

Cost: $250 and up
Term: Middle-Long
Risk: Average-High

If the relatively low returns of fixed term investments don’t sound fantastic, you might want to consider buying into a managed fund. In this case, your money is pooled together with others’ and invested in a range of assets (usually bonds and shares), either local or overseas. You don’t have to worry about the details; the fund manager does that for you.

Keep in mind that higher returns also mean higher risk, so you’ll want to be very careful about who you entrust your hard-earned dollars to. Consider consulting a financial advisor, or check out www.sorted.org.nz for more information.