Career & Money

A Beginner’s Guide To Investing In 2022

By Gerry Incollingo
17th Jan 2022

two girls sitting at a wooden table and laughing

If you don’t have a healthy relationship with money, investing can seem overwhelming and stressful. The good news is, investing doesn't have to be 'hard', in fact, you can end up with considerably more money at the end of the day if you make the right investment. 

Read on for a beginners guide to investing.

What Is Investing?

In a nutshell, investing is where you commit money for a period of time with the intention of receiving more money in return. You may commit money to another company, a start-up (can be risky), the government for even in an investment property with the intention of getting more money back than what you put in. It can be a bit more risky than just saving your money, but over a period of time, it can also help you have more cash for retirement, buying property—whatever your intention may be.

What Are Some Investment Options?

There are many ways to invest your money, such as real estate, stocks, ETFs, mutual funds, cryptocurrency and gold. Do your own research or speak with an advisor to find the best options for you. It is wise to hold off on investing unless you are in a financial position to do so. 

A rule of thumb for beginner investors is to always invest an amount you are willing to lose. If you have excessive credit card debt or don’t have a rainy day fund, then I recommend handling these before you look to invest. 

If you are ready to invest, there are some smaller and simpler options that you can try first to get a taste for it. Sign up to a micro-investing app, such as Raiz or Spaceship Voyager, where they round up the spendings from your assigned bank account to the nearest dollar and invest the change for you. It is a good way to see how it works with a smaller amount of money.

How To Invest As A Beginner

Once you have spoken to an expert to see the best option for you, my key tip would be to diversify your investments as there will be more chance of success. If you put your money all into one stock and it falls, you will lose your money.

For a beginner, I would recommend investing the bulk of your money into a mutual fund, or “blue-chip” shares which are essentially the shares for big companies that are unlikely to fall down, such as the four big banks. Once you get more confident with shares then you can test a few more options out.

If you are using trading platforms or brokers, make sure you compare their fees with their competitors, as you can definitely get stung on fees if you are not careful.

Alternatives To Investing

If investing isn’t for you, that’s fine. Other safe ways to grow your money include a long-term interest account, where you commit to putting some of your money away for a period of time and in return the bank will give you a better return. Salary sacrificing is another option for growing wealth. You can sacrifice a percentage of your wage to help build your superannuation fund, as well as paying less income tax. The only downfall is you will not have access to your superfund until eligible.

Now, here are five easy investments you should make to start building your wealth.

Gerry Incollingo is the Managing Director of LCI Partners in 1998, an established accounting, finance and legal firm based in Parramatta. Since that time, the firm has expanded with six divisions and is now based in Sydney, Parramatta, and southern Sydney.

Image credit: Urban List

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