A financial expert helps people with their investments. I am often asked for advice on investments. People want their money to make a profit and to increase in amount. The average investor wants to make a quick profit in a short time.

However, it’s a fact that he cannot expect a maximum profit with a minimum risk. He doesn’t want to lose his money when he is investing it, as most of the investors also want to save money for their retirement. Below are some guidelines on how they can invest their money.

An investor may put his money in a bank. He can open two kinds of accounts. If he puts the money in a deposit account, he is paid interest. However, his money will remain there for a period of time and he will not be free to draw it out at any moment.


If he does, the bank will not pay him any interest on his money. If he opens a current account, on the other hand, the customer can obtain his money whenever he likes, but will not be paid any interest and therefore, will not pay any taxes. So it is advisable to have enough money in a current account to spend on immediate expenses and to take advantage of the interest rates by keeping the rest in a deposit account.

If you can put aside – save – money regularly, try this. Deposit accounts are taxed, however, and they are not very good investment if the cost of living rises fast; that is, if the inflation rate is high. An investor could join the government’s ‘Save As You Earn’ scheme, which is the safest method of investment. If he saves money regularly and he doesn’t want his savings to lose value as the cost of living rises, he should join this scheme.

This offers him a tax-free interest. However, he must promise to save a certain amount every month for at least five years. He could invest in the stock market. The stock market offers investors the opportunity of making quite good profits within a short time. But that kind of investment is very risky as there can also be heavy losses in a very short time.

Since the 1960’s, profits made in the stock market have been taxed, too. Unit trusts are a way of reducing the risk of losing one’s money. The investor entrusts – gives – his money to experts and they invest it for him in a number of different ways by buying shares. If the experts choose carefully and wisely, unit trusts are more likely to guarantee him a profit.’

He could buy property as it usually increases in value more quickly than the cost of living. But if you still have to sell your house, remember that you will have to pay taxes for the money you receive for it. If you sell someone a house, you can only escape taxation if you are living in it at the time you are selling it.

You may conclude that investment is so complicated that it is simpler to keep your money under the bed. But this is the most certain way to lose it. The pound (£) has been falling in real value since the 1930’s and this situation is not likely to change in the near future.



Mark the best choice.

1. Quick profits can only be made if you .

a) take minimum risks c) invest in the stock market b) open a deposit account in a bank d) join a ‘Save As You Earn’ scheme

2. if in your country the cost of living rises constantly and you don’t want this to affect your savings,

a) join a ‘Save As You Earn’ scheme

c) put your money under the bed b) open a deposit account in a bank d) sell your house

3. You have to pay taxes for .

a) the money you get when you sell the house that you are living in at the time b) your money on a current account

c) the interest you get from a ‘Save As You Earn’ scheme d) the interest you get on a deposit account

4. A person who has frequent expenses .

a) ought to put all his money in a deposit account b) should pay more taxes

c) should open a current account d) Both (b) and (c) are correct.

5. If a person has a regular income and is able to save a certain amount of money each month, he should .

a) not be taxed on his income c) open a current account

b) join a ‘Save As You Earn’ scheme d) Both (aj and (c) are correct.


6. if you , there will be no risk of losing your money.

a) invest in unit trusts                 c) join a ‘Save As You Earn’ scheme

b) put your money under the bed        d) invest in the stock market

7. îr •:hv,. ‘vpo of investment does another person invest your money for

a) The stock market. c) The ‘Save As You Earn’ scheme. b) The deposit account. d) The unit trusts.

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