Stock Market Investing for Beginners

By Jason Fittler

You want to start investing.

But you find the whole process complicated and confusing.

Don't worry you are not alone.

One of the main barriers to the average person getting ahead is the complexity around financial advice. Most Financial Advisers seem to make a simple activity more complex than is necessary. 

The truth is when you first start out investing is not all that complicated!

Here is a simple investment guide. Follow it and you’ll be on your way to building financial freedom.

The basic building blocks of wealth are all the same no matter what you are investing in or how you decide to build your wealth.

You need:

1. Time

2. Spare cash

3. A Clear Picture of What Financial Freedom Means to You 

Time – You build wealth over time. The old saying “easy come easy go” could not be any more true when you are dealing with creating wealth. So the trick is to start early. Start now and continue the process over the rest of your life.

Spare Cash – You must find some money to invest. This will mean sacrifice. To have money tomorrow you need to put some aside today.  You create wealth by the choices you make about how to spend your money not how much you make. Find the cash and start putting it aside now.

Clear Picture - Know how much you will need to buy yourself financial freedom. Take your expenses and divide by 6% this will be a good starting point. This amount will be achievable as long as you have the right time frame and make the necessary spending cuts to make sure you have the cash.

Now what?

Investments need to do some of the work as well. So which investment should you invest in?

Cash – Cash should not be considered a long-term investment. It provides no growth and little income. Cash should be held for short-term expenses and for those people who have retired and cannot afford to lose any capital.

Shares – When starting out buy an index fund. This will provide you with a diversified portfolio straight away.  Index funds are simple and straightforward to understand. Market goes up so does your investment. You can start an Index Fund with $1000. You can then add to it monthly. This makes it easy to set up a savings plan.

Property – Not for the beginner as it requires a major capital outlay and gearing. Property is a cash negative investment in that you will always be outlaying money on it. Property is better suited as an investment when you have high surplus cash.  

If you would like help in getting started please give us a call (07) 4771 4577.