What motivates a person to invest, rather than spend money immediately? The most common answer is to accumulate wealth for the future. To increase wealth, people need to manage their savings to make them grow. What they do to increase their savings over time is called investment.

Thus, investment is the commitment of money for a period of time in order to derive larger future returns. The definition of investment is to sacrifice present value for future value.

Attitudes towards investment

It is important to understand the risk and returns of investments. This is where our Financial Planning Managers can guide and help you make the right decisions. The graph below provides a perspective on the equation between the risks and returns of several investment assets. Please note that while the graph is not illustrated to proportion, it gives you a relative idea of the level of risk and expected return of those assets.

The benefits of investing

Retaining cash deposits can earn a rate of return. However most people do not consider the eroding power of inflation on their savings. So although it is important to keep sufficient money for day-to-day use, deposit accounts alone may not be the best way to make your money work hard enough for you. History has shown that over the longer term, equity based investments have outperformed bank deposits.