Learning to invest is an empowering step toward financial security. While investing might seem complex at first, understanding some fundamental concepts and taking small steps can help you become more confident and knowledgeable. Here’s a beginner’s guide on where to start.

Define Your Goals

Before diving into investing, consider what you hope to achieve. Are you looking to grow your wealth for retirement, save for a big purchase, or create a financial cushion? Knowing your “why” will guide you in setting realistic goals and choosing investments that suit your timeline and risk tolerance.

Master the Basics

Starting with a good understanding of investment terms will make things less intimidating. Here are some essentials to grasp:

1. Assets: Investments like stocks, bonds, and property that can increase in value over time.
2. Risk Tolerance: The amount of risk you’re comfortable with. Generally, higher-risk investments can yield higher returns, while lower-risk ones provide stability but slower growth.
3. Diversification: Spreading your investments across different asset types to reduce risk.
4. Compounding: This occurs when returns on an investment generate their own returns over time, helping your money grow faster.

Learning these core concepts will help you understand investment strategies and make informed choices.

Free Learning Resources

There are several excellent resources to learn the basics:

• ASIC’s MoneySmart: A government-run resource with guides and calculators that cover everything from asset classes to diversification. Learn more here.
• Investopedia: An extensive online library of investment definitions, articles, and beginner’s guides that explain everything in clear, accessible language. Learn more here.
• ASX Education Centre: The Australian Securities Exchange’s platform offers beginner-friendly courses, webinars, and simulations to help you understand stocks and other investments. Learn more here.

Getting Started with Small Investments

When you’re ready to invest, start small with beginner-friendly platforms that offer fractional shares or low minimum investments. Here are a few popular options in Australia:

1. Raiz: This app invests your spare change by rounding up daily purchases. It’s an easy way to start investing in a diversified portfolio without needing a lot of money upfront. Learn more here.
2. Spaceship: Designed for new investors, Spaceship allows you to start with as little as $5. It focuses on companies poised for growth, providing an accessible way to learn about stock market investing. Learn more here.
3. Sharesies: Sharesies enables you to buy fractional shares with a low starting balance, giving you access to both Australian and international stocks, ETFs, and managed funds. Learn more here.
4. SelfWealth: This low-cost trading platform lets you trade shares directly on the ASX. SelfWealth’s straightforward pricing and user-friendly interface make it a popular choice for those who want to buy individual stocks. Learn more here.

Each of these platforms allows you to experiment with small amounts of money while learning how different investments perform.

Structured Courses and Expert Advice

If you’re looking for a more guided approach, consider online courses. Platforms like Udemy, Coursera, and ASX’s Education Centre offer beginner investment courses, some of which are free. These courses cover fundamental principles, risk management, and investment strategies.

Consulting with a financial adviser or tapping into your super fund’s resources can also be helpful. Many super funds offer free educational sessions or tools, and some even provide access to financial advisers for initial guidance on investment basics.

Keep Learning

Investing is an ongoing journey. Stay updated on market trends and expand your knowledge through financial news, articles, and short learning sessions. A few minutes a day can add up, helping you make better-informed decisions over time.

By taking small steps and building your knowledge steadily, you’ll gain confidence in managing your investments and making decisions aligned with your financial goals. Investing is a skill, and with practice, you’ll be well-prepared to grow your wealth for the future.

Now is also the perfect chance to ask How Does Your Super Fund Stack Up? And learn if you should get insurance through your superannuation fund here.

Feature image: Stock market. Photography by Bro Crock via Shutterstock.

Disclaimer: This article provides general information only and does not constitute financial advice. It is important to consider your own personal circumstances and seek professional advice before making any financial decisions.