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, you 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 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.
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!
- 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.
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, and how do they work?
- 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?
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.
4. Developing a portfolio
Once you’ve learnt some basic concepts, it’s time to put together an investment portfolio. There are plenty of services that enable you to invest in New Zealand, but the choices can be confusing. So how should you put together a portfolio, and what services should you use?
- 6 ways to build a long-term investment portfolio in New Zealand
- What’s the difference between InvestNow, Sharesies, Simplicity, Hatch, and more?
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
Once you’ve gotten started with a basic portfolio, you might be wondering about other assets you can add to it like shares in individual companies or REITs.
- Investing in individual companies vs funds – what’s better?
- Buying shares on the NZX – Sharesies vs ASB Securities and Jarden Direct
- Buying shares in the USA – Sharesies vs Hatch vs Stake
- Due diligence on shares – How I evaluate companies before investing
- 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.
- What taxes do you need to pay on your investments in New Zealand?
- 2020 recession? How to prepare your investment portfolio
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”.