How to start...

Hi All,

Very new and green to this whole world of investing. Whilst I have enjoyed myself to no end up until this point in life I have decided to take a step in the right direction. But the direction is unclear at the moment.

I have 4k to my name in savings and no loans. I own my own car outright. I am currently renting and earning a decent wage 80k. I have 'recently' started saving after finishing paying of silly uni debts and the likes. I am in a position where I can put aside 500 pw but I would really like to see this going somewhere productive. I know I could probably put more aside but I enjoy my sport way too much. I have grand plans to buy a house in the next few years but in the mean time I would really like to maximize what money I am putting away.

I guess my question is really where should I be looking / researching. I am open to all suggestions.

Thanks in advance

Know this: you want to increase your returns, you have to increase your risk.

I find this applies to pretty much all areas of life. You can go slow and steady but most of the time, the rate of accumulation is painful compared to some of the more "riskier" methods out there.

I am just starting out as well. I use info from this site, and investopedia to help me understand the workings of becoming wealthy

Best of luck.

I'm not certain about the details and don't have time at this moment to look into it for you (hopefully someone else on these forums can confirm) but if you are looking to buy a house in a couple of years time one of those first home owner savings accounts might be worth investigating, as I think there are some slight tax advantage and government co-contributions involved.

Also I'm pretty sure one of the main points of the FHO savings account is that you are locked into having the account active for 4 financial years, but I think the catch is if you open your account before the end of this financial year it counts as you having had the account for a whole year, and the same applies with the last year. So theoretically you can access you money after two years rather than waiting the full four.

Anyway I just thought I'd mention it because you don't have much time to act on it.

Thanks for you advice. Boy there is a lot to learn and in such a short time.

I think I best start working on a plan.. I doesnt seem to get any easier!

T

No it doesn't.

Being young myself I'm still wading my way through the learning process of becoming "financially literate". I actually just finished writing a 1200 word email to my accountant that is filled entirely with questions I need answered before the end of this financial year so I can best plan my tax for this year and next...



It seems with every bit of new financial information I learn I seem to have another five questions that need answering.

Chris has given some sound tips there about investigating the First Home Saver accts- esp if you're aiming to buy a property anyway within the next few years. However, you'd need to hurry to get it set up by end of this financial year. Check out this site for more details and best of luck!

Home Saver Accounts - Fact Sheet

I just did a little research on the FHSA and these guys look reasonably good if you were looking for a good starting point for comparison to others:

ME Bank :: First Home Saver Account

Looking over the scheme I'm starting to think I should be opening an account myself. %17 contributions, plus the account interest, not to mention being only taxed at 15%... it's an alround good deal.

Though I would love to see some of those investment account options become avaialbe, earning 3 - 6%pa isn't exactly great money nor is cash a good protection against the inflation would appear to be likely to become more of an issue in the next 2 - 3 years.

:P

Thanks for all you help.

Yes I have looked briefly into FHSA Chris but my understanding is that you are locked into the full term. So I am a bit reluctant to head in that direction. I am well hopefully looking shorter term to get into the realestate market. I have been looking into shares but have no idea as to where to start. Managed funds and the likes.. The whole uncertanty of the current day market also adds to my confusion. Not an easy time to start learning but is it ever a good time!!!

Thanks again for all the helpful advice.
T

Well if you opened an account before June 30th you'd only be locked in for 2 years, and its not like you need to contribute a HUGE amount (I think its a $1000 in a space of 4 financial years), plus I think a pretty secure 23%pa return over the next 2 years is nothing to sneeze at! I reckon their would be a lot of fund managers out there (the sort of ones you'd end up investing in) that would be beating down the door to lock in those sorts of returns over the next two years!

... but that is just my two cents...

Invest in books about investing:

1. Beating the Street
2. One Up On Wall Street : How To Use What You Already Know To Make Money In The Market
3. The Warren Buffett Way
4. All the Warren Buffett's Letters to Berkshire Shareholders (free to download from BERKSHIRE HATHAWAY INC website)

Read them thoroughly and understand them...
And jump in......