BridgeTrust Credit Union


BridgeTrust Credit Union

Investment

It's always a good idea to put some money away for a rainy day. An investment in its simplest form is when you buy something with the hope of it increasing in value. However, when you invest there are no guarantees and you could receive back less than you invested.

When you first decide to invest you don’t need to start with a large sum of money, just be comfortable with the amount of money that you choose to invest.
There are a number of different ways that you could choose to invest, including stocks and shares and funds. Investing in assets can have advantages over holding money in a bank account or cash savings.

If you have savings and you’d like to see your money grow over the long term, then you could consider investing some of it.
You can also save for the future in cash accounts and the interest can also provide additional income and liquidity should you need it. The downside to cash savings is that inflation can eat away at the value of your savings over time.


What’s your reason for investing?

To start with investment, you must have a reason. Some of the reasons could be:

Invest for income

If you want to create income from investing, one option is to choose investments that provide regular payments. For instance, shares pay a dividend and a bond pays interest.
Investing for income is popular with retirees who wish to supplement their pensions.


Invest for growth

Investing for growth is the aim of increasing the value of your investment known as capital gains. If you were investing in stocks and shares for example, growth would be the result of an increase in the price of the shares.


Compound growth

Compound growth can be defined when you re-invest dividends which can generate extra earnings over time. The asset accumulates growth from the original investment and the added earnings are known as compound interest.

Most investors will invest for both growth and income, for example an income investor could use the income from their investments and reinvest this with the aim of generating, and a growth investor might sell their investment to gain an income.