Question: I am 24 and have been working full-time for 3 years. I have $50,000 sitting in a high interest online savings account earning about 6% and a small share portfolio of around $6,000. I earn $75,000 a year, and receive 13% super. I have started taking that 4% extra as cash given that retirement seems an age away. I don't like the property market as an investment, but at the same time I don't like tax and inflation eating away at my cash. Is the sharemarket or managed funds my only real options? Given the fickleness of the sharemarket in the last couple of years I have been relucatant to buy in. I do want to do something more productive than sitting on cash. Advice?

Answer: The sharemarket might have been volatile lately but over the last ten years, the All Ordinaries Accumulation Index, which includes income and growth, has averaged 7% per annum.  I think shares are a fantastic investment because you can start with a small amount, add to them in small amounts, and even borrow against them as the balance grows.  If you are particularly nervous of shares you could always buy an index fund, which by definition cannot go broke.  Just do your research before you invest.