5 min read
Spoiler alert: you can start almost all types of investing directly from an app on your phone. Technology has made investing more accessible than ever for Australians, allowing beginners to start with relatively small amounts and grow their portfolios over time. However, while the process may be simple, successful investing still requires planning, patience, and an understanding of risk.
Important: The content of this blog post is general information only and does not take your personal circumstances into account. For personalised advice, please speak with a qualified financial adviser or investment professional.
First Things First: Are You Ready to Start Investing?
Deciding to invest can feel like a big step. Before entering the market, it’s important to make sure your financial situation is stable enough to support investing.
Consider the following questions:
- Is your regular income greater than your regular expenses?
- If you have debt, are you paying it off without financial stress?
- Do you have some savings that you won’t need in the short term?
- Do you follow a budget and have spare cash available to invest regularly?
- Do you understand that investing involves risk?
- Would you be comfortable seeing your investments temporarily drop in value during market volatility?
If you answered yes to most or all of these questions, you may be ready to start investing. If you’re unsure, speaking with a professional through structured financial planning can help determine whether investing is appropriate for your situation.
What Can You Invest In?
There are many different types of investments available in Australia. While the investment world can seem complex, most options fall into several key asset classes:
- Cash (savings accounts)
- Fixed interest products (such as term deposits)
- Shares (also known as stocks)
- Exchange Traded Funds (ETFs)
- Property
- Cryptocurrencies
For the purposes of this guide, we will focus on three of the most common investment options for beginners:
- Shares
- ETFs
- Cryptocurrencies
We’ll also show how technology now allows many of these investments to be managed through simple mobile apps.
Getting Started with Investing
The best way to begin investing depends on your financial situation and how involved you want to be in managing your investments. If you want to start with small regular contributions and prefer a more hands-off approach, micro-investing may be a good starting point.
Micro-Investing Apps
Micro-investing platforms allow Australians to start investing with relatively small amounts of money while building good financial habits.
Popular micro-investing apps include:
- Raiz
- Spaceship
- Sharesies
These platforms allow you to invest small amounts, sometimes as little as $5, into diversified portfolios made up of shares and ETFs.
Other apps such as CommSec Pocket or Stake operate more like brokerage platforms, allowing you to buy bundles of ETFs or individual investments. Micro-investing apps encourage regular contributions, which helps investors benefit from compound growth over time.
Watch Out for Fees
While micro-investing apps offer convenience, they often charge management or subscription fees. Over time, fees can reduce your overall returns, so it’s important to understand the costs before investing.
Investing in Exchange Traded Funds (ETFs)
Exchange Traded Funds (ETFs) are one of the most popular investment options for beginners and experienced investors alike. An ETF is essentially a bundle of multiple companies combined into one investment. Instead of purchasing shares in a single company, an ETF gives you exposure to a range of businesses across industries or markets. This approach helps create diversification, meaning your risk is spread across many companies rather than relying on just one.
Popular ETF Investment Platforms
Some commonly used platforms in Australia include:
- CommSec Pocket
- Pearler
- SelfWealth
- NAB Trade
CommSec Pocket allows investors to start with as little as $50, offering themed investment options such as technology, sustainability, or Australia’s top 200 companies.
Pearler has also gained popularity among younger investors as it allows users to view the portfolios of other investors. For a lower-fee approach, many investors choose to buy ETFs directly through online brokerage platforms and hold them long-term.
Investing in Individual Shares
Buying shares means owning a small portion of a company. Share investing can offer both capital growth and dividend income, but it also requires more research and involvement.
Before purchasing shares, ASIC’s MoneySmart suggests considering questions such as:
- Will this company’s products or services remain in demand in the future?
- Does the company have strong growth potential?
- Who are its main competitors, and how strong are they?
Many Australians use platforms such as CommSec, SelfWealth, or Stake to invest directly in shares. Because individual shares carry higher risk than diversified investments like ETFs, it’s important to ensure your portfolio remains diversified. If you’re unsure which investments align with your goals, a professional financial adviser can help create a strategy tailored to your circumstances.
Investing in Cryptocurrencies
Cryptocurrency investing has grown significantly in popularity in recent years. Digital assets such as Bitcoin and Ethereum are typically considered high-risk investments, as their value can fluctuate significantly over short periods. If you choose to invest in cryptocurrency, it’s important to understand the volatility involved.
Popular cryptocurrency trading platforms in Australia include:
- CoinSpot
- CoinJar
- Swyftx
As with any investment, it’s important to only invest money you can afford to risk.
Choosing Investments That Align With Your Values
Many investors today also consider the environmental and social impact of their investments. For example, some people prefer to avoid industries such as fossil fuels or gambling, while others focus on companies involved in clean energy, sustainability, or ethical business practices. If ethical investing is important to you, we previously published a blog on this topic which you can explore in our blog section.
Start Your Investing Journey with Confidence
There is no single “right” way to start investing. The best investment strategy depends on your financial situation, cash flow, risk tolerance, and long-term goals. For some people, micro-investing apps may be the perfect starting point. Others may prefer ETFs or direct share investing.
If you’re planning to invest larger amounts or want guidance creating a long-term strategy, working with a professional adviser can provide clarity and confidence. Our team at Pursue Wealth is always happy to help. If you have questions about investing or financial planning, you can contact us to book a complimentary 15-minute “Quick Chat”.
Key Takeaways
- Investing in Australia is more accessible than ever, with many platforms available via mobile apps
- Before investing, ensure your finances are stable and you understand the risks
- Popular beginner investments include ETFs, shares, and micro-investing platforms
- Diversification helps reduce risk when building a portfolio
- Professional advice can help you develop a strategy aligned with your goals
