Anyone who has been following various finance blogs for a while will have heard about ETFs (Exchange Traded Funds). They are the Investment vehicle of choice amongst the under 40’s and have increased by 80 percent to be worth $100 Billion in just the past year. Like a lot of normal people I did not grow up with any understanding of shares or the stock market. “It is just like gambling” my dad would say. This belief is often held by average Aussies like myself who were too nervous or who lack understanding of how the share market works. I had a lot of confusion over long term investments versus short term speculative investments. The old attitude of work your job and save your money in fixed term deposit was not going to fly with me anymore. There was no possible way I could just “save” my way to passive income given that the interest rates are currently less than half a percent for savings accounts.
So I started researching about shares, ETFs and the stock market in general and how it all worked. I found some really helpful articles and finance bloggers who were actually investing and I finally decided I would take the plunge. Even though I am only at the start of my Investment Journey relating to shares I do have a plan in my mind for how much I can afford to invest and how often I will be purchasing. I do encourage people getting started to have a look at their income and cash flow and work out what their rough plan is and what they can afford. I have currently bought 108 units of VAS which is a Vanguard ETF that tracks the top 300 companies listed on the ASX. I am planning to diversify into an ETF that tracks the US market (S&P 500) and the rest of the world markets as well once I have saved more money.
I purchased through commsec purely because I am a beginner and I liked the fact that it is a subsidiary of the commonwealth bank. I am aware a lot of people prefer self wealth as it is a cheaper brokerage cost per trade. Maybe in the future I will switch over but for now I found it helpful that I was able to ring the commsec number and ask for guidance when I needed it. Once I save my next 10K I will purchase another lot of VAS and then after that start looking for a US ETF.
I would be lying if I said it still wasn’t a scary thing for me to invest hard earned savings into the share market even if ETFs are deemed a “safer option.” But It was definitely the right time for me to get started (actually March 2020 would have been a great time to get start considering the returns since the Covid crash) but ahh hindsight..
I will start tracking my share portfolio on my blog and Instagram so that you can see how things are progressing. I have put together a guide to try and simplify the process of how to actually purchase ETFs through an online broker. I really struggled to find information to help a newbie learn how to actually place a trade so I took some screenshots throughout my purchase. Subscribe to the blog to receive this guide, it might be helpful!
