10 steps for smart investing
THE P3 Investment Group, based on 12 years of empowering South African investors to build real wealth, shares its top 10 tips for intelligent investing in 2016. 1. Know thyself For investors who have zero tolerance for losing money, but require high returns, good capital growth and a solid hedge against inflation, buy-to-let property is a solution.
2. Never invest in something you don t understand
The top choice for a simple, straight-forward investment alternative is buy-to-let property. It is simple: acquire a well-chosen property, rent it out to a well-screened tenant, and watch your relatively small investment grow.
3. Invest in consistent, reliable income streams
Invest in income-generating assets, such as a buy-to-let property, which produces a consistent, reliable income stream for as long as the property is held, and steady, ongoing capital growth. 4. A balanced mandate Prime among these is a direct investment in an income-producing property, also known as buy-to-let property investment.
5. Watch the fees that decimate returns
Opt for simple, straightforward investments that do not require specialised advice and therefore layers of fees.
6. Take a long-term perspective
A long-term perspective cultivates discipline and enables investors to acquire assets like property that increase in value over time and raise their incomeearning ability in the future. 7. Avoid speculating A superior strategy is to select income-generating assets, focusing the investment decision on longterm income-generating potential, instead of speculating about short-term capital growth. A buy-to-let property lends itself to this strategy, as the investment is based on the property s potential to generate an ongoing rental income.
8. Hedge against inflation
Hedging against the devastating impact of inflation requires investments that generate returns greater than inflation. Property price growth continues to keep pace with inflation over the long term.
9. Balance risk and return
All investments entail risk, but investors don t have to accept high risk to achieve high returns. There are lower risk investment alternatives that produce high returns. One notable example is buy-to-let property investment.
10. Understand the tax implications
One investment alternative certainly stands out among taxefficient investment options, and that is buy-to-let property investment, which offers opportunity for investors to optimise their tax liabilities, while delivering dual returns, concludes Gert van Staden, CEO of the P3 Investment Group.