In this week’s episode of Your Money & Your Life, Bryce Leske from Equity Mates Investing Podcast explained why getting into the sharemarket is achievable for everyone. Watch the segment here and then read on for more information.
1. The sharemarket is for everyone
Getting into the sharemarket is easier and more accessible than you might think. As Leske explains, the share market is open to everyone. “You don’t need a degree in finance or tens of thousands of dollars to get started,” he says. With only a small amount of capital, you can start investing (see below for just how small!).
The benefits of investing can be generational. “So change your mindset and understand that investing is for everyone,” Leske urges.
Indeed, the massive power of compounding interest over many generations can never be underestimated. Finding $1000 to invest today, then topping that up by just $100 each month would mean that at 5% annual interest rate (much lower than the average sharemarket return, by the way), in 10 years time you will have accrued over $17,000. If you managed to keep doing it for 20 years, you’d have over $43K.
Imagine if you kept it up your whole life, ready to pass on to your kids (or yourself, let’s be honest)? Well, 50 years worth of $100 a month investing would see you with $278,985.
Not a bad stack simply for finding an extra 25 or so bucks each week.
Related: Strategies to cope with volatile sharemarkets
2. Start with just a few cents
If you don’t happen to have a lazy $1,000 ready to invest, getting into the sharemarket is still within reach today. Leske says you can literally start with just a few cents. “These days there are micro-investing apps that let you invest with just your spare change,” he says.
Micro-investment apps make it super easy to get started. They tend to talk in plain English, they’re an all-in-one shop, are easy to automate and, if you pay attention, they’re quite educational, offering tips and cues to help you out.
Some micro-investing apps to check out:
The best way to find the right app for you is to give each of them a go. A micro-investing app is not only a great way to kick things off, any of these options are complex enough to stick with as your investment portfolio grows.
More investment apps: 6 best money-saving apps to have on your smartphone
3. Good enough, not perfect
Leske says the most important thing is to start. “Don’t get lost finding the perfect broker, the perfect fund manager or the perfect stock,” he advises. “You can always improve and change as you learn as an investor.”
Since the 1900s the Australian sharemarket has averaged a return of 13.2 per cent a year – far better than any savings account. So, Leske’s advice is to “get started, learn as you go and your Future Self will thank you.”
This article contains general information only. It should not be relied on as finance or tax advice. You should obtain specific, independent professional advice from a registered tax agent or financial adviser in relation to your particular circumstances and issues.
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