How do I get started investing?

Investing. Does it sound fun or intimidating?

Well, if you're got KiwiSaver, then you're already an investor. Ka pai koe.

Here's the top line on investing. Investing is when instead of putting your money into a bank account, you put it into things called assets, which put money back into your pocket over time.

There are different types of assets. Traditionally, these would be shares, bonds, cash, or property. Then there are alternative assets, like gold, art, or cryptocurrency. The reason people invest in assets is because they can produce an income and grow in value over time.

It's important that they grow more than any costs, taxes or inflation. Otherwise it's not even worth it.

So how do you get started?

There are five steps.

Tahi, you've got to think about your investment goals. Why are you investing? Is there something that you're saving for? Like a house or a waka?

Working this out at the start means we can invest in a way that helps us reach those goals.

Rua, what risk can you take on? Think about when you'll need the money. The longer you're investing for, the more time you have to ride the ups and downs of a higher risk investment. Lower risk investments, like bank deposits are less likely to suddenly fall in value than higher risk investments, like shares. So they're better for short-term goals. But if you're willing
to tolerate higher risk, you could get even higher returns in the long run.

Is there any chance that your investment could lose value or that you don't get your money back? Yes, absolutely.

It pays to understand the risks because no investment is risk free. Remember, if it's too good to be true, then it's probably not true. If an investment is promoted as low risk with high returns, then it's probably a scam. And investing in it is as good as guessing, gaming or gambling. And you don't wanna do that with money that you need.

Ever heard of the phrase don't put all your eggs in one basket? That's step toru.

Diversify. Don't put all your money in one place. Spread your risk and diversify your investments. Mix it up with investments here and internationally and in different industries. Then if one investment goes pear shaped, your other investments will keep you from losing too much.

Whā, choose how and where you'll invest. You can pick your investments yourself via one of many DIY online platforms but you'll need to be clued up about the share market, business or funds you're investing in or you can also get a
professional fund manager to pick investments for you. In a managed fund, your money is pulled in with other investors and a fund manager looks after it. This is how KiwiSaver works.

Rima, invest regular amounts. Slow and steady wins the race. Don't try and win big by trading often but small amounts regularly into your investments and watch them grow steadily over time, thanks to compound interest.

Huh, that's the lowdown on investing and how to get started. So remember, set your goals, understand the risk, diversify your investment, choose how to invest and invest little and often.

Mean. So now you're ready to be an investor.