You have decided that you want to start investing

The previous two articles have focussed on end-of-financial-year preparation and a call-to-action when your tax refund arrives.

Start investing

You can

  1. Spend
  2. Reduce debt
  3. Future emergencies
  4. Save
  5. Invest

 

You have numerous options to choose from.  If you choose to invest all or part of those funds … Congratulations!  You have just taken the biggest step of all.

This means that you want to set aside funds in medium-long term investments to start building your wealth.

But how do I invest?

                What do I do now?

Firstly it makes sense to keep things simple.  Many highly successful and wealthy investors have a very simple approach to investing.  They use Exchange Traded Funds (ETF’s) that follow a market index.  Equally, ETF’s are well-suited to new investors.  Because ETF’s do not have a minimum investment requirement means that you can become an investor with a small amount of money.

ETF’s are low-cost and offer access to the broader investment markets. High Growth.

ETF’s invest mainly in Australian & International shares, Balanced ETF’s include bonds, shares and real estate, while Income ETF’s focus on cash and other lower-risk income producing assets.  High Growth ETF’s have the highest volatility while Income ETF’s usually lower volatility.

There are many indices across Australian and global markets.  For example, the Australian share market ASX 200 index.  It is comprised of the share prices for the 200 largest companies listed on the Australian Securities Exchange.  Therefore an investor in an ETF that follows this index gains access to an investment that aims to replicate Australia’s top 200 listed companies.

An ETF Index fund is a pooled investment fund that follows a market index that can be bought and sold like an individual stock. 

Because ETF’s try to replicate an underlying index they provide a simple way to diversify your portfolio.  

Because there are many ETF’s investing in different assets, you will need to seek an ETF that meets your needs but must also match your risk profile.

How do I choose an ETF?

You need to do some leg-work here.  To select an ETF you need to do some reading and research.  It’s not that difficult.  Simply type “Australian ETF’s” into Google and you are on your way.  A few hours should provide you with the information you need to make an investment decision and select an ETF that is suitable to your needs.

Where do I find ETF’s?

There are a range of sources that support you in becoming an investor.

1. To invest in an ETF you can choose an online broker or you can go directly to the manager of the ETF.

Examples of major companies that manage ETF’s include BetaShares, Vanguard, State Street, Van Eyk, UBS, Russell, Magellan, BlackRock and Fidelity.  There are many more online.

Don’t hesitate to pick up the phone and contact the ETF manager.  Most will be delighted to help you.  Also, all have information on their web sites that will assist you in making your investment decision.

2.To compare the performance of ETF’s there are numerous online resources available.  The following links are a great resource for you.

https://www.finder.com.au/best-etfs

https://www.finder.com.au/how-to-invest-in-index-funds

https://www.bankrate.com/investing/best-index-funds/

https://www.finder.com.au/best-etfs#5year

Even if you don’t have a lot of money to put towards investing right now, starting small is a fantastic way to begin building your financial future. You are on your way!

Even with a larger sum of money, investing it gradually is a smart strategy!

All the best

Jan


It’s your money and your future.

 

💬 Have questions? Email me directly or book your free Discovery Call to start a conversation about your goals.

🌱 Ready for a transformation? Check out my Money Makeover Course and take the first step toward financial freedom today!

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