So you are ready to start investing. But what are your investment choices?

So you are ready to start investing!

But what are your investment choices?

Analysist paralyses stops many investors from getting started. There are so many choices all claiming to get the best return. So where do you start?

If you are feeling confused or overwhelmed by the number of investment options just remember this: there are only three possible investments. By investments I mean an asset you can buy, which will produce income and capital growth but require no further effort from you.

All investment fall into three basic categories:


2.      Property

3.      Cash deposits or “Fixed Interest”

All investment are either one of the above categories or a combination of them.

·         Shares – we have already discussed these in the previous chapter.

·         Property - can be residential, commercial or units in a property trust either listed or unlisted. However they all work the same way, the investor keep whatever is left over from the rental income after all expenses are paid.

·         Cash Deposits – these includes money you deposit with a bank, in effect you loan your money to the bank and they promise to pay it back at some point in time and pay you interest. This can be extended to Bond issued by the Government or individual companies. The name is different but the underlying process is the same.

There are no other investments, remember, investments require no further effort form you once they are purchased. All investment are either a re-packaged version of one of these three or a non-investment.


I classify non-investments as something which does not do anything or requires further effort from you.

When we look at investments which do nothing, Gold is the big one, the price of gold will increase or decrease due to demand, you will not receive income from it. You need to trade gold to make money as such you are now carrying on a business. If you are lucky you will make money. Much the same can be said for Art, Racing Horses, Cars, other collectable items.

Other non-investment require your time and attention, the main one being a small business. Sure you can make plenty of money running a small business however it requires massive input by you; as such I do not consider it to be an investment. You need to start taking money out of the business first to invest before you start getting ahead.


Superannuation can be confusing for many people, Superannuation is not an investment.

Nor is it a different class assets, it is merely a low tax vehicle in which you can hold investments. Money in superannuation is invested in the three asset classes as discussed above (shares, property and cash). It is the low tax environment in super which makes it attractive.

We will discuss Superannuation in more detail later.