Investing 101
Most people earn money by working – trading our hours for dollars. How about making our money work for us, even when we sleep? This is what investing is about – putting our money into assets like shares, bonds, and bank deposits where it will grow and and make even more money for us over time.
What can we achieve when our money works for us? Perhaps we can live a better lifestyle, work less and spend more time with loved ones, or fund a comfortable (and potentially early) retirement. Or it could result in having the means to support your child’s future education needs, or the purchase of their first home.
You don’t need a lot of money, to sign up for any expensive courses, or understand how to read financial statements to get started. Anyone can do it, and thanks to the internet you can invest from anywhere in the world. Investing works better the longer you give your money to grow. So the best time to start is now, and hopefully this page helps by compiling articles and tips for new investors to get started.
1. Before you invest
If you have any high-interest debt like hire purchases, personal loans, or credit card balances, pay it off first! Next, establish an emergency fund – a bank account holding enough money to cover a few months worth of expenses. This will save you from having to take on more debt if a large, unexpected expense comes up.
- The best bank accounts and credit cards for managing your everyday finances
- Bonus Saver vs Notice Saver vs Term Deposit – Which savings product is right for you?
Investing tip – Always have a positive attitude. Absolutely anyone can take action to improve their wealth or financial position.
2. Sort your KiwiSaver
KiwiSaver is one of the best investment schemes in New Zealand, with contributions from yourself, your employer, and the government, all helping you save up for retirement or your first home. It’s the first investment all Kiwis should get sorted!
- KiwiSaver 101 – How does KiwiSaver fit into your investment portfolio?
- Simplicity vs JUNO vs BNZ – Battle of the low cost KiwiSaver funds
Investing tip – Take action. The best time to start investing is now. There is no such thing as not having enough money, or being too late to start.
3. Learn the basics
While KiwiSaver provides a great start to investing, you may want to build your wealth with investments outside of the scheme. So learn some basics about investing – what are the different ways you can invest, how do they work, and what should you look out for?
- Basic investing concepts explained – With pizza analogies!
- 9 ways to invest in New Zealand
- Shares 101 – How to buy shares, which companies to pick, and more
- Funds 101 – What’s the difference between an Index Fund, ETF, and more?
- Due diligence – Do you really know what you’re investing in?
Investing tip – Don’t be greedy or treat investing as a get rich quick scheme. It’s a marathon, not a sprint.
4. Plan your portfolio
Once you’ve learnt some basic concepts, it’s time to put together a plan for your investment portfolio. Different people will require different investments depending on their goals, investment timeframe, and preferences – so how should you construct your portfolio?
- How to invest $1k/$10k/$100k in New Zealand
- 6 ways to build a long-term investment portfolio in New Zealand
- What’s the best short-term investment?
Investing tip – Consider what your investing goals are, and pick investments that align to those goals.
5. Start investing!
Once you’ve got a plan for what your portfolio might look like, learn about the different platforms and funds you can use to invest in New Zealand.
Overview
Investing in funds
Investing in shares
- Sharesies review – Still a good investment platform in late 2021?
- Buying shares in the USA – Sharesies vs Hatch vs Stake
Investing tip – You don’t need heaps of shares and funds to build a diversified portfolio. Quality beats quantity.
6. Let your money grow
Once you’ve established an investment strategy, keep contributing to your investments regularly and let your money grow. Enjoy the dividends and capital gains, but don’t forget about tax. Lastly, don’t panic when the markets fall – remember it’s natural for financial markets to go up and down every day.
- What taxes do you need to pay on your investments in New Zealand?
- Portfolio WOF and service – How to maintain your investments
Investing tip – Stay the course when the markets fall. Don’t panic or sell your investments. Instead consider investing more while they’re “on sale”.
7. Keep learning
Getting started with investing isn’t hard. But there are always other investing concepts you can explore to improve your knowledge.
Funds
- More funds = less diversification? Are you investing in too many funds?
- What happens to your money if InvestNow or Sharesies go bust?
Shares
- Due diligence on shares – How I evaluate companies before investing
- Prices don’t matter! 4 things to know about share prices
- Dealing with Dividends – 5 things to know about them
- Rights issues, share buybacks, and acquisitions – 5 things to know about Corporate Actions
Other topics
- Digital Gold? 5 things to know about Bitcoin
- Clean and Green? 5 things to know about Ethical investing
Investing tip – Never invest in something you don’t understand. If in doubt, stick with simple investments for your portfolio.
8. Check out our other resources
There’s lots more information on investing throughout this site, and on other online resources. Check them out and remember to follow Money King NZ so you can keep up with our latest articles.
Investing tip – You will make mistakes while investing. Learn from them and adjust your investment portfolio or strategy if necessary.
