Should I invest and where do I start?

Should you be investing in shares right now? Host of my millennial money, Glen James shares his tips on when and how to invest.

If investing in shares is something you’re new to, it’s hard to know where to begin. Here are some quick tips to get you started.

When should I invest?

Once you’re consumer debt free

In my opinion, the best return you’ll get on your money is to pay down any consumer debts you have first. Think credit card repayments, Afterpay or any personal loans – once you’re free from this debt, then you can consider investing. HECS/HELP debt is generally not considered consumer debt when talking about being debt free.

Systematically, not sporadically

To ensure you’re investing strategically, consider a strategy where you take yourself out of the equation. Look at investing each month or at your own predetermined frequency to remove yourself from reacting to good or bad markets. If human emotions get involved, decisions can be made out of greed or desperation.

Ensure your income is consistent

Consider your spending habits and your current income. Do you have enough to survive with extra to save or invest? If you find yourself living paycheck to paycheck, it’s time to be smart and make sure you have a buffer to get through any loss of shifts.

Set up your emergency fund first

If there are any ‘financial hiccups’ or drastic changes in your life (think COVID-19), having an emergency fund ensures you don’t need to sell down your investments to pay for your lifestyle and expenses until you’re out of the woods. You also may be selling investments at a time that is not great to sell. Think of it as setting up base camp before starting the big climb.

Ensure you balance other goals

What is the purpose behind your investment? Are you in this for the long haul or looking to cash out in the short term? If you’re saving for a holiday or new car is it worth investing only to withdraw in 18 months time? (hint: the answer is no).

How should I invest?

Consider Superannuation

Your account is already set up (investing is for the long term, right?). Personal super contributions are now tax-deductible. Paying less tax is always a good thing.

Don’t pick single stocks as a beginner

Go back to your strategy – are you trying to time the market and catch a falling knife, or are you investing for the long term? Look for diversification and cost. Research exchange traded index funds (EFTs) as a starting point.

If you’re interested in more, listen to the my millennial money podcast episode on investing for a more in depth conversation on this topic.

About Glen James  

Glen James is the creator & host of the my millennial money podcast, a popular Australian personal finance podcast, Glen is a now-retired multiple award winning financial adviser with experience helping countless people get on top of their finances. He is conservative and somewhat a contrarian in the way he delivers his practical & fun financial help. Glen has a particular interest in personal finance and small business for millennials.

With his own personal financial success behind him, Glen has a passion to help people achieve financial freedom, like he has. His teaching method is light-hearted and fun while still managing to cover sensitive and important topics in an engaging way.

Glen regularly speaks to regular people & financial planning professionals at various events nationally. He is a regular contributor to national industry and consumer facing publications.