How to make your money work for you

The news I read most often is politics and finance.  Finance news and opinion always fascinates me because you have people saying different things about what you should do with your money.  There are those who absolutely love property and then there are those who would rather invest their money elsewhere.  I fall into the latter category, but today I read a story in the Sydney Morning Herald.  The writer, Michael Koziol was talking about why buying is better than renting.  He didn't however go into the financial aspect of why buying is better and instead waffled on about bad flatmates and paying excessively high rent to live in the city.  He seemed to indicate that he was terrible with money and more concerned with living close to the city so he could spend money going out socialising, which, anyone who lives in Sydney would agree, can cost a few hundred dollars a night, well maybe not that much, but at least $100 if you're just having dinner and a few drinks somewhere cheap. 

In the weekend I read another story which talked about the financial side of buying property.  Some economists mentioned in the piece said that it's only worth buying property if you're return on investment is going to be at least 2.9%.  That's a sizeable amount when you consider Sydney property prices.  Now you often do hear people whinging about property prices and I'm not even going to attempt to say they aren't scary because honestly, they are.  They terrify me.  Granted I'm only 28 and granted I've never liked the idea of property.  You read so many different opinions on why property is great with some saying it's a safe investment and it's not susceptible to market pressures like the stock exchange is but I don't really buy into that concept.  You're tied for 30 years, you're paying a very very high mortgage with high interest and if you want to sell it's not that easy because you have listing fees and you have the time it takes to sell your property.  It can be quite inconvenient if you want the money quickly.

Then there are standard savings accounts where you can see your money.  Unless you have a term deposit then it's likely you'll be able to withdraw your money easily and without paying more than a $5 fee.  Plus, the advantage to term deposits unlike with property is that you can see your money daily.  It's right there in front of you.  Property values, until the property is sold are just theoretical and someone's opinion.  The value is intangible.

Then there are shares.  Shares do not appeal to everyone because it's a bit like gambling.  You may buy low or high but then the shares decrease in value and potentially you'll lose some of your investment.  Some people do not feel comfortable with this type of investment.  However, shares pay dividends and you can vote in annual general meetings, which gives you a say on how the business is run, not the day to day runnings but the general gist of the business.  The other advantage of shares is that when you buy you're investing in the economy.  I think, and this is just my personal opinion here, that some people are put off shares because they think there's no point in buying a small insignificant amount but there was an ad a while ago which had the line, "from little things big things grow", and it's absolutely true, you have to start somewhere.  No millionaire, or billionaire starts with that amount in their bank account.  They have to work hard for it and then build up their equity.

Today I invested in the Australian Stock Exchange for the first time and it felt really good to know that I have some equity and an asset of some type.    This reminds me of an article I saw about a week ago.  It was talking about how rich people are actually quite stingy with their money and lately I've been called st