Investing and getting advice
Making your money work harder
You don't need a lot of money to start investing. Some
investments let you begin with a small amount and add to your
investment regularly, allowing you to build it up over
There is plenty of information available to help you make an
investing plan, or you could talk to a qualified financial adviser
if you want help with your investment decisions. Here we have
some tips to get you started.
Get ready to invest
You'll know you're ready to invest when you:
- are comfortably meeting your living expenses
- have your bills under control
- pay your credit card in full each month
- have set up an emergency fund to cover any
When you're comfortable with where you are financially, you're
more likely to possess the clear, level head you'll need to make
good investment decisions.
All investments carry some risk, but without risk, there's no
reward. The secret to investing smarter is to plan, research
and understand your investments, and how they fit with your
Set your investment goals
Setting investment goals is important because it gives your
investment plan a purpose and will help you decide what types of
investments are appropriate.
For example, if you're saving for something in the short-term
(say, up to 3 years) you'll be looking for a conservative asset
where there's little chance of losing your money. However, if
you're saving for the longer term, you can afford to ride out the
inevitable ups and downs in investment markets to chase a better
For more information about setting investment goals that match
the level of risk you're prepared to accept, see goals
and risk tolerance.
Choose a suitable investment
When it comes to choosing your investments,
you'll need to consider your financial goals, and your tolerance
for risk. You'll also need to take into account how much money you
want to start your investment portfolio with, and whether you want
to be able to add to it over time.
It's also important to diversify your investments in order to
spread your risk. This means if one company doesn't do as well as
you hoped, you won't have all your money riding on it.
For example, if you want to start investing in shares with, say
$10,000, you could invest in a number of companies across different
industries. If, on the other hand, you have a much smaller amount
to invest, say $1,000, you can still get exposure to a diversified
share portfolio through an exchange traded fund
(ETF). An ETF may also be suitable if you would prefer not to
choose individual shares yourself.
Look out for scams
Protect yourself from investment scams. They often look
professional and believable and it can be hard to tell them apart
from the real deal, so take some time to learn about the types of
scams doing the rounds and approach every opportunity with a
healthy dose of caution.
Use your favourite search engine to investigate companies and
funds. Look for investments with a company that's been around for a
long time and has a good track record of returns. You will also
find plenty of expert opinion on what to invest in; just be aware
that we all have biases, so don't rely on just one person's
Consider seeing a financial
A financial adviser can help you with a range of money matters,
from personal budgeting and investing, to planning for retirement
and protecting your assets with appropriate insurance cover. They
can also help work through your finances if you've received a
windfall, are recently divorced, or have just lost your
By law, a licensed financial adviser must consider your goals,
needs and personal circumstances when they make any recommendations
Choosing a financial adviser
Look for a financial adviser that has experience with the type
of issues you want advice on. Read our tips on how to choose a financial
When you have a short list of advisers, use ASIC's financial
advisers register to check what areas they can provide advice
The register will tell you:
- the adviser's qualifications, experience and employment
- what product areas the adviser can provide advice
- whether the adviser belongs to a professional body or industry
- whether the adviser has been the subject of disciplinary action
- the name and number of the Australian financial services (AFS)
licence holder who employs or authorises the financial adviser to
- who owns or controls the AFS licence holder.
Check a financial adviser's details.
Financial advisers register
Types of financial advice
There are several different types of advice, from general
information that doesn't take your personal circumstances into
account, to personal advice that does consider your personal
You can get personal advice for a specific issue, such as
choosing investments or sorting out your super, or you may prefer
to have someone look at your finances as a whole and put together a
comprehensive plan to achieve your financial goals.
Financial advice costs
How much you pay for advice will depend on how you choose to
receive advice and the type of advice you receive. Face-to face
advice is usually more expensive than phone-based or video chat
advice. If you're only looking for help on a single issue, you may
consider choosing a more cost-effective option, like robo-advice.
Financial advisers can be paid in different ways. They may
- on a time-based, fee for service arrangement, or
- an asset-based fee, calculated as a percentage of the amount
you invest through them.
Many financial advisers use a combination of these payment
methods. For example, they may charge a flat fee up-front and an
ongoing fee based on a percentage of your investments.
See financial advice costs for more
information on the cost of advice and what to expect for your
Case study: Claire meets a money mentor
After she completed university,
Claire, 25, was enjoying a decent income for the first time in her
life. But she was also spending a lot and starting to rack up an
unhealthy level of debt. She says, "It wasn't until my dad asked me
if I was putting some money away that I realised all I had to show
for a few years' work was an impressive shoe collection."
Claire decided to get her money on track and put a plan in place
to build a financially secure future.
A family friend recommended a financial adviser, who worked with
Claire to help her set and stick to a budget and pay off her debts.
The adviser also helped Claire put a savings plan in place and
start building a small investment portfolio.
Develop a good savings
Saving and investing often go hand in hand. You probably had to
save regularly to build up an emergency fund and a starting balance
for investing. Developing a regular savings habit will help you
plan much better for the future.
If you get paid regularly, set up an automatic transfer to move
some of your salary into a separate savings account each pay day. If your
employer allows you to split your pay, you could ask them to
deposit your savings directly into this account.
Choose a savings account with a good interest rate, but don't
link it to your bank card. You don't want to accidently pay for
everyday expenses with your savings.
If you have a mortgage, see if your lender offers an offset
account. This is a type of account that is linked to your home loan
and reduces the amount of interest you pay on your loan. You will
effectively be earning a mortgage interest rate on your
Whether you choose your own investments or get help from an
adviser, it's important to keep on top of where your money is and
how it's performing. Some investments will need more attention than
Here are a few examples of different investments and what to
look for, but visit our webpage on keeping track of your
investments for more detailed tips.
Compare the interest rates on offer every few months to make
sure you're still getting a good interest rate for your
If your broker offers daily alerts, set up this feature to
receive any news about the companies you have invested in. Check
the share price at least weekly and, if it has gone down more than
what may be expected with normal market fluctuations, you'll need
to investigate why. You may also consider putting a stop-loss order
in place. This tells your broker to sell if the price of the share
drops by more than a certain amount, for example 20%.
Because professional fund managers watch the markets for you and
make investment decisions accordingly, this type of managed fund
should need less of your attention.
However, you should receive investment statements periodically.
Read these carefully to ensure you understand how the fund is
performing, what fees you're paying, and to check that any
additional contributions you've made to the fund (if you've topped
up your investment) are included.
If you're working with an
adviser and paying an ongoing advice fee, you should receive a
review of your plan at least once each year. You may also receive
more frequent investment reports. Even if your adviser has
recommended investments for you, it is still in your best interests
to read these reports carefully to keep an eye on those
investments. No one is likely to care more about looking after your
money than you .
Women's money challenges
Our women's money challenges
infographic looks at the everyday challenges women face and the
small steps they can take now that can make a big difference
Investing your money can help secure your
financial future. If you're thinking of seeing a financial adviser,
look for a qualified and licensed professional that has the
appropriate experience to help you, and only deal with someone you
feel comfortable with.
Last updated: 14 May 2018