KIRSTY APP - Good Money Management Continued


Money is cash but it is also a measure of value, the legal tender which you exchange for goods and services when you buy them. It is also the means by which the market values of different items can be compared and contrasted. Its serious disadvantage is that it is not constant. Whether for goods or services, money prices will differ from person to person and from time to time, according to market circumstances. You therefore need to take care in interpreting money values recorded at different times.

REQUIREMENTS FOR YOUR INDIVIDUAL CIRCUMSTANCES We all pass through different stages, of childhood, youth, family life and retirement. We have various commitments to others. Our varying situations create differing requirements - for income, for security and for capital, either immediately or at some time in the future. You need to plan your savings and investment opportunities to satisfy your own requirements as conveniently and successfully as you can.

OUTLINE OF SAVINGS AND INVESTMENT OPPORTUNITIES You can invest cash in many forms. You can place it in safekeeping with banks, or you can use it to buy property, goods such as antiques, commodities or precious metals or to obtain interest in trading activities via stocks and shares or unit or investment trusts.

Generally the only investments guaranteed to repay you a specified amount (and to pay you a specific interest rate over an agreed period of time) are national savings and government stocks (gilts). All other types of savings and investments will repay you whatever sum is the result of market pricing at the time; the factors will include inflation, interest payments and judgements of future prospects. Broadly, over long periods of time, investments in shares and in unit and investment trusts tend to outpace inflation.

On an annual basis, income from investments can be a fixed amount or it can be variable. Some investments actually provide no income. Eventually you can usually sell your investments for cash, which is known as liquidating them. If this can be done easily, they are said to have a high degree of liquidity. This is the case with most shares traded on the Stock Exchange, and also with unit trusts and government stocks. Those investments which are less readily realizable might not be suitable for someone likely to need cash quickly; shares in private companies are often of this type as trading in the shares is done less frequently and there is no daily market price.

For the selection and maintenance of the investments most suitable for your specific requirements, you will need individual advice.


Factors Affecting Investment Decisions