“Fixed interest may be the world’s most boring type of investment, but should you have some in your portfolio?”

Wha-a-a-t? Boring! Old-people topic! Yawn. Wake me up when you start talking about something of interest to Gen Xers.

Okay, even for Xers, fixed interest has a place. A small place, like the cavity for Paris Hilton’s brain, but a place.

What is fixed interest? It used to be called bonds. Fixed interest is one step up from cash on the risk/return scale, but before property and shares.

If cash is you giving money to a bank, who then lends it, fixed interest is you lending the money, directly, to governments and business. Because you’re taking a slightly higher risk, you should receive a slightly higher return.

Fixed interest should become more a part of an overall portfolio as you move from left to right on this page. Can you here me over there, Kerrin?

A typical “balanced” super fund will have somewhere between 20 and 50 per cent in fixed interest.

But is that where Gen Xers’ super should be? Heck no. Gen Xers have got at least 15, but more like 20-30 years, until they can access their super.

They should have more of their super in property and shares, with a maximum of about 20 per cent of their super in fixed interest.

And as for non-super investments … the younger you are, the more you should be chasing growth, which is property and shares (and potentially geared). Excess cash will largely get a better tax-free return in the mortgage offset/redraw account than in fixed interest.

Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and a licensed financial adviser.