Smart Ways To Invest and Make Money in Australia

by Ronald Wolf Business Consultant

Australia’s economy is the 13th largest in the world. In the last 26 years, it has been constantly growing and it is expected to grow annually by about 2.9 percent over the next five years. Australia’s ability to adapt to global changes and its strong institutions and services sector all make it an amazing place for investing. Here are some things you should know and some smart ways you can invest your money.

What you need to know

Australia always welcomes foreign investors as they have helped build its economy and prosperity. However, if you are a foreign investor, informing the Australian Taxation Office of your plans might be necessary.

Additionally, some types of investments require a business visa that has certain eligibility conditions. You might have to be nominated or invited to apply for the visa and you might be expected to have a certain amount of funds.

If you are about to move and are not sure which type of visa suits you best, you might want to turn to experienced business agents that can make your transition to Australia much safer and profitable. They can make sure that your business and investments are in full compliance with the conditions of your visa.

Another tip to have in mind is that diversification is crucial. If you have the opportunity to do so, you should spread out your investments over several fields. Now, here are some of the best options for investing money in Australia.

Property investment

Before purchasing a residential real estate, most foreign investors need approval from the Australian Government. This can be obtained through the Foreign Investment Review Board’s website. Make sure to provide all relevant data and keep in mind that there is a fee that you have to pay.

There is a housing shortage in many major Australian cities because the population is increasing much faster than buildings are being constructed. Seeing as how Australia is known for its diversity when it comes to cities, it is expected that the migration trend will continue and, as a result, the prices of properties will rise.

A residential real estate is not the only thing you can invest in, though; factories and offices offer a great ROI. If you have that kind of budget, you can even invest in pubs, hotels, and commercial and residential developments as that is quite popular with foreign investors.

Fixed income

Corporate and government bonds are known to provide a relatively reliable and stable return. When it comes to government bonds, you can purchase either Federal or State bonds. They can be bought or sold whenever the ASX market is open. If you wait until maturity to sell them, the government guarantees interest payment and face value. According to an ASX report from 2017, the average return on bonds is 6.1 percent annually over 10 years.

Similar applies to corporate bonds. This means that you are basically giving a loan to a company, which is going to be paid back once the bond reaches maturity. However, be wary of the creditworthiness of the issuer of the bond.

While some may consider this to be boring, having diverse investments in your portfolio can help you offset any other losses. They are often classified as a low-risk, ‘defensive’ asset.

Equities

Equities are considered a risky asset as they can yield high returns but also great losses. This is due to sudden fluctuations in their price. Stocks are probably the most common type of equity. You can choose between mutual funds and individual stocks. When you buy individual stocks, you have one or several shares in a specific company. By investing in a fund, you own small pieces of several companies. This approach is a safer bet as you will be diversifying your portfolio. According to ASX, the average annual ROI is 4.3% over 10 years. If you are a newbie investor, don’t hesitate to turn to experts for help. It’s important that you know to identify the companies that might hit it big.

Peer-to-peer lending

Opting for peer-to-peer lending can also be a lucrative idea. There are platforms, such as SocietyOne, Harmoney, and RateSetter, that let you decide how much you can lend and the interest rates. Many people need loans to finance a new car or consolidate their debt, and this is a great way to match their needs to your offerings. Just pay attention to the fee that these platforms charge.

Savings account

It might sound too simple, but it’s always good to plan for your future. This can also help you in case of an emergency. The interest rates might be low at the moment, but having access to the money when you need it makes up for it.

These are just some of the ways you can make money by investing in Australia. You can also look into some specific sectors, such as wine production, infrastructure or healthcare. Remember that these are long-term investments and that you should be patient in order to see results. In the meantime, don’t forget to consult with experts, diversify and pay your taxes.