After having a couple months of being diligent with my money, sticking to budget and allocating each dollar I had come in, I realised that there were still many many things I had to learn. I had learnt about how to have a wealthy heart and characteristics, but I still had a gap of knowledge in how to invest the money. It’s not to say that all that deep stuff was pointless, but I’m needing to make some physical moves sometime soon or else this is all just head knowledge. I had some money set aside thanks to applying the lessons I had learned for several months, but I got to the point where it’s just too much cash sitting there doing nothing.
The biggest thought that kept on entering my mind was “how do I physically do that?”. I hear things like “you need to invest” and then I would face the same question of “how?”. Even if this is followed by a comment like “invest by buying shares” I would once again get stuck with the “how?!” part. I didn’t know how to buy shares or where to buy shares. Do I just open my bank app and transfer money somewhere and they give it back when I ask for it? Do I sign up somewhere online? If so, what website do I go to? All these very very basic questions popped in my head and to be honest, it’s a little discouraging, but by this time I was built to push through all these barriers.
My drive to understand and learn far outweighed these feelings so I simply decided to just get out there and physically try. I googled “investments” and came across a couple of schemes, and maybe even saw some good opportunities but I had no idea if these were legit or not. I eventually came across a website called Sharesies so I went on to its website, clicked on the signup button, and I was away. Now, just so you don’t have a booming “HOW?” when you decide to take this journey, let me take you through my experience of buying my first asset. I have broken it down into 5 legit physical steps on how to buy investments.
Step 1 – Choose an investing platform
There are a million investments out there like stocks, property, crypto, peer-to-peer, but no matter what you’re getting into there is always a platform to buy the investment. Let’s go through my experience of buying shares/stocks. Here is a list of some platforms that I have personally explored and found alright:
- Sharesies – https://www.sharesies.nz/
- Plus500 (Offers practice mode) – https://www.plus500.co.nz/
- Investnow – https://investnow.co.nz/
- Hatch (Just launched but looks promising) – https://www.hatchinvest.nz/
They all have slight differences such as their costs structure, but at the end of the day they offer similar services and they are the gateway to buying your first investment.
Step 2 – Set up an account
Now that you know where to buy your investment, the next step is to sign up. It’s essentially as if you’re signing up for Facebook, except there are a few additional pieces of information needed for security reasons as you’re now dealing with money. Based on what I experienced, here is some basic information you will need to set up your accounts:
- ID verification – So have a picture of your license or birth certificate
- Address Verification – This can be your latest bank statement or any bill payment. Otherwise, you can physically verify your address by them sending you mail, but this takes longer to verify.
- Bank Account details – This will be used for putting money into your investments and taking money out.
Step 3 – Transfer money to your new wallet
Once you’re signed up, you normally get details on how to transfer money from your bank account into this account that you set up in whichever place you decided to invest through. For example, Sharesies had an account number to transfer into along with instructions for the reference and details I need to include when I make a bank transfer. I went on my phone, transferred $50 from my bank to Sharesies, had all the specific details in the reference, and after an hour or two the money turned up in my Sharesies account.
This can be viewed as your wallet within this investment provider, as it where your money is held before you buy things and it’s where your money goes when you sell things. So for example, if I have $50 in my ‘Sharesies wallet’ and I buy $40 worth of shares, then I have $10 left in my Sharesies wallet. If I then sell $20 of those shares, then the money comes back into my Sharesies wallet and I would have $30.
Step 4 – Buy assets
So once you have money in this wallet you can buy whatever investments that are available to you. For example, within Sharesies there’s only a handful of options and I have chosen the NZ TOP 50 investment. I simply click on the buy button, place an order of $50 or however much you want, and then after several days this has been processed and the asset is mine, and it’s working for me.
Once you have put money into this wallet and have purchased some sort of investment, you will then get returns in different ways. I want to focus on the ‘how’ portion for now, but just as a quick example, since I have shares I gain in two ways, either through the value increasing or through a dividend.
Step 5 – Claim the gains
If you’re ready to claim some of the money your money made for you, you can simply sell the asset that you bought. This money will end up back in your online wallet, for example my Sharesies wallet. From here you can withdraw money from that wallet back into your personal bank account and then go enjoy spending money that you didn’t work for!
That’s the five steps, it’s a very basic concept of how you can start investing your money today. You will come across other questions such as, “how do I know whether its a good investment or not?”, which are valuable but not the purpose of this post specifically. This is where you can do as much research as you like, but just a reminder that at the end of the day the only way to make it work is by actually pulling the trigger and taking action.
Just so I don’t leave you hanging, there are multiple ways to learn about specific investments. My personal favourites would have to be:
- Investopedia (Great for simple breakdowns)
- YouTube (Endless depth to most topics)
- Chats with knowledgeable people on the topic I’m after (I have gone through the research and gained knowledge on a lot of these topics now, so if you want a chat then I am always up for a good discussion on anything, from simple stocks through to bitcoin halving theory!)
So in conclusion, hopefully all the past lessons I’ve shared have helped you get the current position I am in. I have put money aside to start investing and developed the characteristics to persevere through investment challenges and uncertainty. You now have the knowledge required to buy investments (the 5 steps) along with 3 fully accessible channels to address some of the questions you may face. You know everything I know! So for me personally, with all this knowledge, I pushed through the fear of the unknown by signing up to Sharesies which literally took 20 minutes. I put in roughly $2,500 (thanks to prior lessons taught) and bought some really basic ETF’s, standing for Exchange Traded Funds. I made mistakes that I will share later on, but the main thing was that I took action and now owned ‘shares’ (YAY), and I encourage you to take action too!
Key Points:
- Buying assets is as simple as five steps
- Don’t let those mental barriers hold you back from the easy physical action
