Money Magnets

These investments lend the money you invest in to them to borrowers as loans.  Your investment earns from the interest charged to the borrowers for the use of your money.  Examples of this type of investments are bonds (government or corporate bonds), bank deposits, and pension plans.  These investments have relatively low returns for the short-term but may exceed inflation rate in the long-term.  These investments are recommended for those who need regular and definite income.  It is also best for older people who can take less risk due to old age.

As the name suggests, these investments allow you to be part owner of a business or company.  They are classified as high risk investments.  Your money earns only if the business or company goes up in value.  In addition, gains and losses are only realized when you decide to sell them.  Examples of this type of investments are stocks, mutual funds, unit investment trust funds, real estate, and your own business.  These investments are recommended for young investors in their 30's or 40's.

Speculative investments are investments that are highly speculative - investors get into these investments hoping that they will hit the jackpot.  Investors take the plunge and hope that the investment will eventually increase in value in the future.  Information on how one can generate profit from these investments are usually vague and incomplete.  Due to the nature of the investment, it possesses a very high risk.  Examples of this type of investments are investment in assets, properties or businesses that may be illegal, and gambling activities like Lotto.

I personally would not recommend Money Magnets to invest in speculative investments.  These are very risky and the chances of gaining returns from this type of investments are very slim.  The more you deal with them the greater is the probability of losing your money.  For capital growth, I suggest you go for ownership investments.  If you are in your 30's then time can be your friend.  The more time you have to invest in these, the less risky they will be.  However, don't forget to leave some money for emergency purposes as well.  Invest these on lending investments which are highly liquid (can be easily converted to cash).  Happy investing to us all!