Best Way To Begin Investing

Posted on: 25/05/2021

Raffi Pailagian
MBA, BSc, DipFP
Financial Planner / Managing Partner

Categories: Financial Planning & Advice Holistic Planning & Advice Investing Retirement Financial Planning Wealth Management

Best Way To Begin Investing?

Not sure what the best way to begin investing? For many people, the prospect of starting the investment journey is daunting. How much do I need? What should I invest in? How can I make sure I make the right decisions?

If you have been procrastinating, but you think it is time to start investing, you’re right. No matter what age or stage you are at, now is always the time to start. But if you’re not sure where to start, read on.

Getting The Foundation Right

There are a few key things you need to have clear in your mind before you start investing.

What are your goals? This will often have a lot to do with where you are in life. Are you investing to save for your first home? For retirement? For your kid’s education? Knowing how much you might need and when is a good place to start.
How much can you afford? 10-15% is often suggested as a good amount, but in reality, anything is better than nothing. There is no point starting out on your investing journey only to fall over because you can’t afford what you have committed to. So be realistic in terms of what you can spare.
What is your Risk Profile? A good financial planner will help you work out whether you are an aggressive investor, a passive investor, or more likely somewhere in between. Whatever your risk profile is, it will determine the mix of your investments going forward. Be aware that your risk profile will change over time, so revisit this every now and then to make sure it is still relevant.

Once you have determined these key factors you can look at the types of products you might like to invest in.

Getting Started

When you first start out you might not have much to work with. If this is the case, consider setting up a savings account where you can grow your money until you have enough to make investments in higher entry products like shares and property.

If saving for retirement is your priority you may go straight for Superannuation. If not, there are lots of options out there for starting small. Your ultimate aim should be to have a range of investment products in your portfolio to ensure you have that magic ingredient, diversity.

Here are some options you might like to consider in the early stages of your financial plan:

Managed Funds – these allow you to invest a small amount but maintain diversity as the fund itself invests in a range of stocks. You can choose a managed fund or indexed fund depending on your risk profile and preferences.
Exchange Traded Funds – often referred to as EFTs, these funds are similar to mutual funds but are traded on the stock exchange themselves, so their share price fluctuates.
Bonds – if you lean toward the risk-averse Bonds can be a good option as they provide more security than mutual funds and ETFs.

If you feel you are ready to start investing and would like some professional advice, Manly Financial Services can help you clarify your goals, identify your risk profile and determine how much you want to get started with.

Call us on (02) 98763388 or select the button below, to find out more about how to get started.

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