Capital growth or capital gain The increase in value of your original investment or asset.
Income The dollar amount return you earn from investing in an asset.
Total return Income plus capital growth.
Yield The annual rate of income received expressed as a percentage of the original asset value
Direct investments You invest directly into that investment, not through an agent or broker. You have control of how your own money is invested. You decide when to sell, when to buy, and you receive all the income and possible tax benefits. You are also responsible for the taxation implications.
Managed funds A structure whereby investors give their money to be managed by one person or a one-fund manager. The fund manager (the controller) decides what to invest in, when to sell and when to buy.
Industrial shares The shares of companies that are involved in the production or sale of goods and services.
Compounding This is where the investment increases exponentially over time due to interest being paid not just on the original investment or capital, but on the previous interest earnedr as well. Essentially it’s interest on interest.
All Ordinaries index or All Ords A measure of the level of share prices at any given time from a sample of major companies listed on the ASX that measures the overall performance of the share market.

What are asset classes?
The following are investment basics. At the very minimum you should aim to understand the four asset classes and be able to explain them to someone else. The principles of asset classes are very important and will not only prepare you for your approach to saving for private school fees, but also for any other lifetime financial goals you may be aiming for.

There are only four asset classes and they are:
• cash
• fixed interest
• property
• shares.