Top tips from Brooke Roberts, Director and Co-Founder of Sharesies AU.
Stepping into the world of investing can feel exciting, but perhaps a bit overwhelming as well, as so many of us aren’t sure where to begin! How to fit investing into your personal finances, how much to invest, when, and how much to sell, are all frequently asked topics – and granted, because there’s a lot to consider in the financial space.
So, if you are keen to take charge of your personal finances and evaluate the role that investing can play for you, here are the top four things that Director and Co-Founder of Sharesies AU Brooke Roberts* recommends thinking about:
- A budget
- An emergency fund
- A debt plan
- And learning as you go!
If your financial plan covers off these four things, sticking to and growing your investments may become an easier habit to adopt over time.
Create a budget overview
You may be asking yourself, “Where do I start?” It’s worth being realistic with how much you can invest at any time, as that can help keep you consistent and motivated. To do this, you may want to create a budget that helps you keep track of where your money generally goes and what your spending habits are. By being clear on this with yourself, it can help determine how much you can afford to invest.
When creating your budget overview, you might want to include things like:
- Your monthly, fortnightly, or weekly income
- What your fixed expenses are (like bills and loan repayments)
- What your variable expenses are (like groceries, transport, entertainment and utilities)
This can help you choose an amount to invest that’s right for you, and make sticking to it easier. There’s a common misconception that you need hundreds of dollars to invest, but that’s not the case – sometimes all you need is $5. In fact, our vision at Sharesies is to give someone with $5 the same investment opportunities as someone with $5 million. That’s why on the Sharesies platform, you can invest as little as 1 cent – there’s no minimum required to begin.
Save up an emergency fund
On top of establishing your budget, it may be worth considering what unexpected expenses could crop up to prevent setbacks in your financial goals. If your car breaks down and needs instant repairs with hefty prices, would you have the funds to repair on hand? Similarly, if you drop your phone and completely shatter the screen making it unusable without repair, would you have enough spare cash set aside to cover the expense?
If not, it may be worth setting up an emergency fund that provides some cash relief for those unwanted circumstances, so you don’t have to dip into your investments.
Setting up an emergency fund doesn’t necessarily need to be done before you start your investing journey – you can do both! Using your budget as a guide, you may choose to put some money you’ve set aside into growing both your emergency fund and your investments.
Make a debt plan
Debt is something many of us are accustomed to. Whether it be a car loan, a personal loan, or money owed on a buy now pay later platform or a credit card – managing your wealth development with any lingering debt can be a challenge. After looking into the interest rate of your debt, it may make more sense to pay that off first before investing. Ultimately, the decision here is up to you.
Similar to the emergency fund strategy, you can also choose to do both, by having some funds go towards your debt, and some towards your investment. While the specific amounts are up to you, it is worth considering how quickly you want to pay off your debt vs how much you want to invest.
Learn as you go
You may have heard before that the biggest investing mistake is not getting started. Once you understand your personal finances and the amount you’re ready to invest, you can embrace learning by doing! Look at the investing options available to you, and think about how you want to grow your wealth by backing the brands you know and believe in. Explore the resources available to help you understand investing, and think about investing regularly and often to keep building out your knowledge. Sharesies are working to create the most financially empowered generation, and purposefully avoid jargon and offer a wealth of educational resources to help investors learn-as-they-go.
Your journey, your time
The important thing about investing is that it isn’t an ‘all-or-nothing’ proposition. In this case, ‘slow and steady wins the race’ is a reality, as even the smallest contribution can still make a difference over time. Create your budget, get your emergency fund and debt organised, and learn as you go, at your own pace throughout your journey.
Ok, now for the legal bit:
All investing involves risk. There is no guarantee you will make money, and no guarantee that you won’t lose the money you start with. Sharesies does not provide personalised advice or recommendations. Any information we provide is general only and current at the time written. Finally, you should consider seeking independent legal, financial, taxation or other advice when considering whether an investment is appropriate for your objectives, financial situation or needs.
