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Investment Solutions for Individuals in South Africa

Common Investment Solutions for Individuals in South Africa

It has been said that the only two ways to make money are to work for it or make your assets work for you. No matter how much you drive that whip, your assets don’t seem too concerned for your desire for passive income. This is where investment solutions come in. Saving all your money in your back pocket doesn’t get it to work for you, but investing it can earn you interest.

There are numerous investment solutions available to individuals in South Africa. Some of them may require a broker and others not. Individuals can choose to invest in stocks, mutual funds, bonds, and options. You can also invest in real estate, small businesses, or precious metals (such as buying gold or Kruger Rands that increase in value).

A List of Investment Solutions

1. Stocks

A stock is a share in a company. It represents a claim that an individual has on that company’s assets and earnings. When buying stocks, you can choose to purchase common stocks. They are shares that give the shareholder a right to vote on company decisions. It gives them a claim to assets. You can also get preferred stocks. These are shares that don’t give the shareholder a right to vote, but do offer a higher claim on assets and earnings.

2. Bonds

A bond is essentially a loan that is given to a company, government, municipality or other third party by an investor. The loan earns interest at a certain rate (which can be fixed) for a defined period, which the lender is to pay to the investor. The investor earns money on the debt, which is cancelled once the capital is repaid.

3. Mutual Funds

A mutual fund is operated by a fund manager. It is a fund where a group of individuals or companies pool their money for investment purposes. The group gives the money to the manager who then invests it on their behalf in stocks, bonds, money market accounts or other assets. Mutual funds are good for individual investors as it gives them access to professionally managed and diverse portfolios. Each shareholder of the fund participates proportionately to how much he or she invested (that is, they lose or gain according to the amount they put into the mutual fund).

4. Options

An option is a contract sold by one party to another. The contract gives the buyer the option to sell or buy a stock, security or other financial asset, at an agreed price during a certain time or on a certain date.

If you want to stop cracking a whip at your house, we can get investment solutions for you. You can also get insurance quotes. Fill in our online form to get in touch with a broker.

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