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.
Fortunately anyone can start investing, and thanks to the internet, can do so from anywhere in the world. You don’t need a lot of money to start either. Investing works better the longer you give your money to grow. So the best time to start is now.
This page aims to compile resources 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.
Investing tip – Always have a positive attitude. Absolutely anyone can take action to improve their wealth or financial position.
2. Learn the basics
Learn some basics about investing. What are the ways you can invest? And how much money do you need to start investing?
- 9 ways to invest in New Zealand
- How much money do I need to start investing?
- Funds 101 – What’s the difference between an Index Fund, ETF, and more?
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. 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. Make sure you’re in a KiwiSaver fund right for you.
- 3 tips to get the most out of KiwiSaver
- Simplicity vs JUNO vs BNZ – Battle of the low cost KiwiSaver funds
Investing tip – Consider what your investing goals are, and pick investments that align to those goals.
4. Investing outside of KiwiSaver
Looking for a place to invest outside of KiwiSaver? Non-KiwiSaver funds are a good way for beginners to start, as they give you a lot of diversification, and don’t require too much knowledge. You’ll need to sign up to an investment platform to access them, and there’s lots of them out there – so what’s the difference between all them?
- What’s the difference between InvestNow, Sharesies, Simplicity, Hatch, and more?
- InvestNow vs Sharesies – Ultimate Fund Platform showdown and review
- How to choose which fund to invest in on InvestNow and Sharesies
- How to invest for kids in New Zealand
Investing tip – Don’t be greedy or treat investing as a get rich quick scheme. It’s a marathon, not a sprint.
5. Extending your portfolio
Are you thinking of investing beyond funds like shares in individual companies? Or have Real Estate Investment Trusts caught your eye? You’ll need a broker to invest in these.
- Investing in individual companies vs funds – what’s better?
- Buying shares on the NZX – Sharesies vs ASB Securities and Direct Broking
- What’s inside your property fund? 5 things to know about REITs
Investing tip – Never invest in something you don’t understand. If in doubt, stick with simple investments for your portfolio.
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.
- 2020 recession? How to prepare your investment portfolio
- Dealing with Dividends – 5 things to know about them
- What taxes do you need to pay on your investments in New Zealand?
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”.