If you came here looking for a magic number, there isn’t one.
There’s a common misconception that you need squillions to get started with investing, but if that were the case, no one would ever enter the market!
With the rise of mobile app based trading platforms there has never been a better or more convenient time to start investing. There are a few things you need to consider before jumping in… How healthy are your finances?
Before you invest you need to look at your situation and run a financial health check. It’s important to be realistic with yourself here- it’s probably not the time to invest if you’re neck deep in debt, or your expenses are more than your income. (If that’s the case, consider seeking personal financial advice to put a plan in place in place to smash down that debt or get help creating a budget that leaves you with surplus cash.)
If your finances are healthy, you’re earning more than you spend and your debt is minimal then you may pass go, collect $200 (we wish!)… onto the next step!
Decide how you will invest.
There are a multitude of trading platforms out there that all have different pros and cons.
If you don’t have a sum saved up to invest just yet you might consider micro investing apps like Raiz or Spaceship. These apps take your spare change and invest in ETFs that you pick depending on your risk tolerance. These are a great way to dip your toe into investing and start to understand the language and flow of the market.
Have a bit more saved up? Great! You might be interested in a more standard trading platform. We’ve partnered with global powerhouse Interactive Brokers to bring you an award winning trading platform (find out more here).
Other popular platforms include Commsec, Selfwealth, and Superhero, all of which have their own pros and cons depending on your preferences.
You can choose to DIY your portfolio or get assistance from an advisor – which is where we specialise. Emerald’s professional financial advisors are experienced traders and investors that can hold your hand and answer any questions you have along the way as you start trading and investing in the live market.
Understand the costs
Investing does come with costs. Make sure you’re across your chosen broker’s fee structure (known as brokerage). Some platforms charge a flat rate per trade whilst others may charge a percentage of the trade value. In the case of the latter, this means that the less you invest, the higher the brokerage cost will be as a percentage of your total trade. You can view a comparison of these with a number of popular platforms and our own by clicking here.
Also, be aware that any gains made from your investments will be subject to tax. Check out the Australian Money Smart website for more info on this to understand how income on your investments is taxed in Australia.
Just get started!
If you’re ready to commit to long term financial goals, your money is often better off in than out of the market. The general rule is that the overall market rises over time, just look at any point on the ASX200 over the past 30 years compared to where it is 5, 10, or 20 years later. The more time you’re invested in the market, the higher your chances are of building wealth. Watching your money snowball is pretty exciting if you get the timing right!
If you’re not sure what platform to get started with, recently we covered this topic plus our upgraded stock recommendation and research platform in a special webinar – click here to watch.
