27 September 2023

How much money do you need to start investing?

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Jasmine Wallis* discusses the accessibility of investing and where to start.

Where once investing was seen as something only done by investment brokers in skyscrapers, it’s now becoming as common as adding to your superannuation or savings account.

According to Commonwealth Bank, 43 per cent of millennials are investing to create wealth and gain financial independence.

From bitcoin to Exchange-traded funds (ETFs), it seems like everyone is looking for those sweet, sweet compound returns.

But where do you start? And do you need tens of thousands of dollars saved up to get a slice of the investing pie?

To learn more, we spoke with Brendan Doggett, the Australian Country Manager at Sharesies.

The Sharesies platform is a wealth development platform that allows investors to buy and sell portions of shares in companies and ETFs across the AU, NZ and US markets, as well as giving someone with $5 the same investment opportunities as someone with $5 million.

What’s your goal?

Like anything in life, a goal is a good motivator.

By figuring out what you want (and by when) you can get a clear idea of what you’re investing towards.

This can help when deciding how much to invest each month.

For example, do you want to get to that financial goal quickly or do you have a couple of decades to go? According to Doggett, the further away from your goal, the more opportunity you have to benefit from time spent in the market.

How much can you afford to invest each month?

When you first begin to think about investing, it’s important to get a sense of your overall budget.

“Think about how much money you are making each month vs. spending so you can establish what amount you’re comfortable setting aside to invest,” Doggett tells Lifehacker Australia.

Lifestyles and wages can change over the years, so figuring out what works for you right now is the best bet to make investing a long-term practice.

According to Doggett, the key question is to ask yourself how much of a change to your standard of living you’re willing to tolerate, and for how long.

Investing is a spectrum where you can live your everyday lifestyle and put away any leftovers, or save intensely to funnel every dollar into your portfolio.

It’s incredibly personal and has to work for your circumstances.

“You can grow [the amount invested] as you build up your comfort level and knowledge in the investing space,” says Doggett.

What’s the minimum amount of money you need to begin investing?

You’ve got your money goals and have reassessed your budget, now it’s time to get investing.

But how much do you need in your bank account in order to start? Again, this is a personal decision.

Some like to have a certain amount of money in their emergency fund or a goal for their savings in the bank.

The good thing about the Sharesies platform? There’s no minimum investment.

While some investing platforms tell you you need to buy $500 or $1000 worth of shares, the Sharesies platform lets you invest from as little as 1 cent.

“That means that you can get started at the amount you can afford, with the ability to buy shares or portions of shares in companies or exchange-traded funds (ETFs) that you believe in,” says Doggett.

When you choose to begin investing is up to you, but with no limit on the amount you need to start, platforms like the Sharesies platform are creating a more accessible financial future for all.

Because being a beginner shouldn’t stop you from beginning.

*Jasmine Wallis is a contributor at Life Hacker.

This article first appeared at lifehacker.com.au.

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