LOUISE FAIRSAVE – Let’s start investing

SO YOU WOULD LIKE TO INVEST. You would like to make a reasonable return on the little funds you can set aside. What is the best investment for you?
Your choice of investment depends on your special circumstances and preferences’ – your age, the size of your immediate family, the number of your dependents, and your disposition to risks, just to name a few of the more important variables in making your choice.
If you have just started your working career, you will look at your investment possibilities differently to a much older person. Your propensity for risk-taking is likely to be much higher than a retired person’s.
Your age is often used to define your stage in a typical earnings life cycle. The young adult finds the first job and then gradually, with promotions, cost-of-living increases, merit increases and other pay adjustments, the starting salary increases. On retirement, the final salary level will tend to drop by at least 30 per cent to the pension level. Depending on where you are along this typical earning pathway, your disposition to taking risks tends to differ.
You will need also to consider your family. If you are a happy-go-lucky bachelor, your investment choices will tend to be different from the young mother of three who may have the further impediment of being single.
Then you may not even have a family of your own, yet have a number of people who look to you for financial support. You may need to support your granny, infirm cousin or impoverished godmother.   Having to make allowances for the upkeep of dependents limits your investment scope and horizon.
What about your willingness to take risks? Investing is a risk/return trade-off.  You get to choose the level of risk you are willing to take with any investment.
Granted, people often make the choice of risk they will tolerate implicitly. There is always that underlying feeling of being comfortable or uncomfortable with the investment.
A good example is in choosing a real estate investment, a house, as against investing in government savings bonds. Some investors would be fearful that if the house is not rented for three to four months, they may lose on the investment.
Where the investor cannot express this fearfulness, his aversion to the high risk of this investment is implicit. The investment in bonds involves less risk but is likely to give a much lower return.
And risks, like comfort, come in the full range. You can be extremely risky – like heavily investing in Lotto, or you can be ultraconservative and bank your funds under your mattress – no risks, no return!
Risking is like dreaming. Big dreams and big goals encourage big risks. Dream small dreams, take small risks. 
If you are unwilling to match big ambitions and dreams with the taking of commensurate risks, you will eventually condition your spirit to tame its dreams and ambitions.
The point is, never envy anyone their higher returns unless you are willing to face similar risks. So let’s invest. You do what best suits you and I’ll do what best suits me.
Louise Fairsave is a personal financial management advisor, providing practical counsel on money and estate matters. Her advice is general in nature; readers should seek personal counsel their specific circumstances.