Money made simple. You don't need a PhD in economics to take control of your financial future.
After decades of hard slog you may start to look forward to retirement - a life of holidays, hobbies and unlimited daytime telly. But it comes at a cost.
No job = no wages, which is where an annuity can help. You hand a pile of money (your retirement savings) to an insurance company and they promise to pay you an income for the rest of your life. The alternative is you keep your money and live off it - and hope it outlives you...
Think of your favourite pie. Now think of your four or five favourite pies. Then imagine having it all in one pie, in juicy segments. This is the dream of asset allocation - dividing up your investments into your favourite assets. The main asset classes are equities (stocks), fixed income (bonds) and cash...
We told you about asset allocation, so you know assets are types of investments - the chunks that make up your portfolio. The industry bods like to give it a bit more class... by adding the word class.
The main asset classes are equities (stocks), fixed income (bonds) and cash or equivalents (assets that behave like cash).