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6 steps to get your money Sorted
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You put in so much effort to earn money – isn’t it time you had it work hard for you, too? You may feel like you’re just beginning your investment journey – but you may already be investing, whether in KiwiSaver or a savings account earning interest.

Investing is a long-term game (it’s not for getting rich quickly) so it’s a good idea to get strategic before you commit your cash. You’ll want to invest wisely and stick with your plan.


The difference between saving and investing 

Let’s get back to the essentials for a moment: saving is setting aside money now for your future. But if you simply stash it under a mattress, it tends to lose its value because of inflation.

If saving is setting aside money, think of investing as taking your savings and going shopping. In this case, you’re shopping for assets (kinds of investments) which put money back into your pocket. While most everyday things we buy simply drain our bank account, buying assets can ‘return’ money to us, by either growing in value or producing a regular stream of income.

And if the returns are good enough, we can outpace inflation, as well as earn more than any fees and taxes along the way. We can grow our money to reach our goals in life. More on that below.

In this guide

So many ways to invest – and getting started is easier than ever

There are so many ways to invest money these days. (That said, some turn out not to be investing at all, such as scams or speculation.) So how best to invest your money in New Zealand?

DIY platforms such as Sharesies, Hatch, InvestNow or Kernel have done a good job of lowering the barriers to getting started investing. You no longer need steep amounts of money just to begin. 

But like any tool, whether these are a good idea will depend on the job you are trying to do. That money you’re investing... what’s it for? How long until you want your money back? Questions like these can help you decide what will work for you, so read on for how to get the most out of investment platforms and funds.

Ready? It can help to give it a go, as we can all learn by doing in the investment space. See the steps below to get started, or get the lowdown on investing in this short video:

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Set clear goals for your investing

It’s really important to know your ‘why’ when you are investing your money. You’ll need to decide what you’re trying to achieve – your purpose, your goals. What is it that investing will help you accomplish?

Knowing your purpose informs your choices as you invest. In short: be really clear and realistic about what you want to achieve, and know the timeframe that you want to invest for.

Our goal planner can help you put some in place.


Ask yourself...

How long you invest your money for is called ‘duration’. For example, you may have goals for the short (1–3 years), medium (4–9 years) or long term (10 years plus). Each of those timeframes would require a different sort of investing, since you’ll need your money back at a certain time.

For the short term, you might invest in a term deposit or a fund that is ‘defensive’. For the medium term, perhaps mostly bonds (which are loans to governments or companies), or a ‘conservative’ or even ‘balanced’ fund. For the long term – when you can ride out the ups and downs of more turbulent markets for a while – a basket of shares in a ‘growth’ or ‘aggressive’ fund would typically bring you higher returns in time.

How easily you can turn your investments into cash is called ‘liquidity’. For example, a bank savings account is a high-liquidity investment because you can get to your money easily and probably won’t have to pay any penalties for taking it out.

Investments that are low liquidity include property (because it takes time to sell and may be expensive) and retirement schemes like KiwiSaver, where your money is generally locked up until you retire.

Find the right balance between risk and return

All investing requires taking on a certain amount of risk with your money. It’s never entirely a sure thing that everything will work out as planned. Your future returns, in fact, will be you getting paid for taking on that risk.

The higher returns you chase, the more risk you have to be prepared to accept. In the short term, higher-risk investments tend to be more of a rollercoaster. Yet over the long term, they have the potential to grow your money more.

That’s the classic balancing act with investing: risk and return. (Warning: if you are ever offered an investment that claims to be risk free with a high return, it’s a scam. Walk away!)

How much risk is right for you? Our investor profiler can help you gauge your attitude toward risk, and you can then base your investment decisions on your risk preferences and your investor type.


Ask yourself...

No financial institution or investment is entirely risk free, but the level of risk can vary greatly. If an investment seems too good to be true, it probably is.

The main risk is that your money may not be there when you need it. Your investments could lose value, or you may not receive all of your money back.

Lower-risk investments like bank deposits or bonds are less likely to suddenly fall in value than higher-risk investments like shares. But if you can tolerate higher risk, there is a better chance of achieving greater returns in the long run with shares.

Some investments like bonds may be given a rating by an independent agency. These ratings are a useful tool in an overall assessment of the investment risks.

Find your asset mix

Based on the type of investor you are, you’ll typically have a mix of investments (called ‘asset allocation’ or ‘strategic asset allocation’) that suits you. This mix is essentially how much of the various kinds of investments – such as shares, bonds, property or just plain cash – you hold.

It’s important to find out your mix of investments because various mixes typically lead to different experiences and results. If you buy more ‘growth assets’ like shares and commercial property, the more ups and downs you’ll have, but also potentially higher returns. If you hold more ‘income assets’ like bonds and cash, you’re less likely to see big drops in value, but you can’t expect them to grow as much.

So you want the mix that’s right for you. Again, our investor profiler can give you an idea of a typical mix for your investor type.


Ask yourself...

With so many ways to invest your money, it helps to understand the different kinds of investments, particularly:

Find out more about the different kinds of investments in our guide. The Financial Markets Authority has information about more complex kinds of investments. 

Diversify your investments to spread your risk

One of the best ways to reduce your risks with the money you’re investing is to not put your eggs all in one basket. This is called diversification.

Say you were looking for a ‘balanced’ mix with your investing – a 50/50 split of bonds and shares. If you put all your money in just one share and one bond, it would be evenly balanced, but it wouldn’t be diversified: you’d have too much riding on that single share and that lone bond!

The solution is to hold a multitude of bonds and shares, for example, in a variety of companies, industries and geographic locations around the world. Some investments will go pear-shaped; others will do well.

Spreading your risk in this way helps smooth out the inevitable ups and downs in the markets, and ideally keeps you from losing money. Here’s more on investment funds and shares.


Ask yourself...

If you’re planning on your investment spinning off a regular income for you to live on, it’s best to put the money where you can have more certainty about the returns it will earn, such as a bank deposit or a bond paying a fixed amount of interest for a set period. Investments can also provide income through regular dividends from shares, or rents and leases from commercial property.

But if you are aiming for your money to grow as much as possible, you could consider more volatile investments such as shares or property, which potentially offer higher long-term returns but fluctuate in value over time.

Research as you choose how and where you invest

There are many choices to make with your investing. How do you know you’re making the right ones? You’ll need to do your homework, get a professional to do it for you, or a bit of both.

Investment is about looking forward, and what you think the future earnings of a given share or bond will be. That typically needs to be based on the company and the environment it is doing business in. How will it perform in the future? Will it be able to grow further?

Your research needs to find clues. These can come from online data, financial advisers or industry experts. You’ll be wise to read all documents relating to the investment you’re considering, such as an investment statement or prospectus. We’ve included these for KiwiSaver and other funds on Smart Investor.

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Look back to look forward, but…

As you shop around for funds or individual investments, you’ll find past results. It’s important to know that these are not a reliable way of predicting what the future will bring! Good investing needs to be forward looking.

Invest regular amounts and grow your money through compound returns

As you invest, you are putting your money to work for you, harnessing the power of compounding returns. The earlier you start the better, since the longer the timeframe, the more investments can compound and grow. Here’s our guide to how compounding works.

The secret to compounding is time: time in the market, not timing the market. Jumping in and out with quick trades often can be expensive, and you can easily miss out on those few days that bring the most growth.

When investing is ‘little and long’, you can take advantage of ‘dollar-cost averaging’, which is investing amounts regularly – buying less when assets are more expensive, buying more when they are cheaper. It’s a brilliant system for growing over time.


Ask yourself…

Knowing the fees involved with investing is important, since those costs affect your results. So is knowing how you’ll be taxed on your investments. Weigh the fees being charged against the likely return from the investment. How much seems reasonable to pay?

The fees information can be found in the investment statements – remember, good investments will be transparent.

Take a look at our KiwiSaver fund finder to estimate how much you’ll pay in fees over your KiwiSaver experience, for example. It can make tens of thousands of dollars difference to your results!

With investing, good advice can be gold

You can get investment advice from a range of people, including financial advisers, insurance companies, sharebrokers and banks. You’ll need to check that the adviser is qualified to provide what you need.

For investments like KiwiSaver and other investment funds, shares or bonds, licensed financial advisers are best. ‘Nominated representatives’ of a company, like a bank, can also provide investment advice, but only on products they provide, such as KiwiSaver, investment funds and savings accounts.

Find out more about getting investment advice in our guide.

Are you truly investing? Or speculating?


Speculating is more like gaming, gambling… or guessing. If you’re taking a bet on whether an investment will increase in value, you’re hoping that there will be someone down the line willing to pay more for it. This especially happens with speculative investments such as cryptocurrency, non-fungible tokens and gold. They do not produce anything – unlike a company that operates a business to make a profit.

Example: Let’s say you’re buying a field. If you’re buying it to ‘land bank’, doing nothing but holding on to it until you can find someone else to pay more for it down the line – that’s speculating. You only make money when you sell (hopefully).


When you invest in a company, you buy based on its future ability to make money from the goods or services it produces. Note that an investment’s price is not related to the company’s current profit, but rather what it will do in the future (estimated future earnings). You will need to do some research into what the future value could be.

Example: Again, let’s say you’re buying a field, but this time you’re buying it to grow produce that generates a profit each year – that’s investing. The longer you hold it, the more money it makes. You can own it forever, theoretically, or you can still potentially make a capital gain if you sell it later on.

Whether you are speculating or investing, your choices will be linked to your motivations – why are you buying?

Perhaps you are speculating based on a certain brand, compared with investing based on the future earnings of a brand and evaluating the risks. Or it may be just in the hope that there will be someone else down the line who is willing to pay more for your investments. It’s helpful to reflect.

How to invest ethically and responsibly

As you are choosing investments, you may be interested in doing good with your money by investing ethically. It’s like using your dollars to vote for the future you want.

There’s a range of ethical investing. Some investors might avoid investing in harmful things like weapons or fossil fuels. Others might go further by searching for businesses that don’t risk damaging the environment or society and are well run (those that rate highly for their environmental, social and governance standards). And others could go even further by investing in organisations that aim to make a positive impact on our world, such as renewable energy companies.

How far would you like to take it? Just do no harm? Or impact positively on the world? As you do your research on the company shares you are buying or the companies your fund manager has chosen, you can decide for yourself and vote with your money.

Mindful Money can help you find the funds out there that match the values you hold.

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Find the investment strategy that suits you best

Your investor profile depends on your personality, your situation and the timeframe you’re investing for. Here’s where to find out your profile, the right mix of investments for you, and even the sort of results you can expect.

Try our investor profiler

Investing FAQs

We all have so much information at our fingertips, including on the markets and their effect on our balances. But that’s not always a good thing – especially when we can see our balance fall that much more often. It can put us off investing entirely. Yet this is all part of investing – we’re buying productive assets whose value can go up and down. The key is to have a long-term plan in place and stick to it. And when markets are down, you’ll be buying assets that are on sale. Here’s more on investing in our world of uncertainty.

These days as little as $1 can get you started. Investing platforms such as Sharesies, Hatch, InvestNow or Kernel have lowered the barriers to getting started with investing. You no longer need steep amounts of money just to begin. To start though, it helps to map out your spending plan (aka your budget) so that you can flow more money towards your investing. The more you do, the better results you can get. Here’s where to start your plan. 

Great question! The cost of doing nothing is known as the ‘opportunity cost’ – measuring what you could’ve gained when opportunity knocked. Unfortunately, there is also what you lose over time, particularly due to the effects of inflation and taxes. Many people who are only saving – setting aside money without investing it – are actually rolling backwards as time goes by.

You may already be investing in shares through KiwiSaver, so it’s good to understand how much so you don’t take on more risky investments than you intend. Then, beyond KiwiSaver, depending on what you’re looking to achieve with your share investing, it helps to figure out how much of your money you want invested in shares – your mix of investments. To check out the most appropriate mix for you and your situation (often called your ‘risk profile’), here’s our investor profiler.  

All investments come with risk, but the level of risk varies greatly. A good place to start is to check your attitude toward risk (no sense losing sleep over your investments, after all), as well as how well-placed you are to take on risk, such as your job security and level of debt. That way you can base your investment decisions on an appropriate level of risk for your situation. Here’s our profiler for investors to do just that.

It’s important to understand the main kinds of investments out there, such as bank deposits, bonds, property and shares. Each of those brings different levels of risk and potential returns. You can invest directly in those investments or into funds that hold a mix of them. Once you find the mix of investments you’re after, you can then base your choices on that strategy. In terms of how much to invest, it helps to work backwards from what you are aiming to achieve – your investment goal. This way you make sure you hit your target. Here’s more on the different kinds of investments. 

We’re not able to endorse or recommend specific investment products, especially because we have no idea of your financial situation or your investment goals. But what we can say is that there have been opportunities all around us, whether it be in the share or bond markets. For managed growth funds, which hold mostly shares, for example, you can compare performance for the past five years using Smart Investor. Here’s where to see the top past performers. 

If by ‘safer’ you mean those investments that have fewer ups and downs in value, and less of a rollercoaster ride, then you are looking for ‘income’ assets such as bonds and cash. Have you heard of ‘defensive’ funds? Out of all the types of managed funds out there (including KiwiSaver), these protect you most from sudden drops in your balance, as they hold mostly bonds and cash. You won’t get the potential returns that you would in other types, but you’re also less likely to be at risk of sudden drops in value or losses. So if you’re going to use your invested money soon, especially within the next 1 to 3 years, they can come in handy. Here are all the defensive managed funds to compare.

No, you need a huge savings rate! This means that you need to be able to put large portions of your earnings aside and invest them. When the amount you receive from your investments (your returns) outpaces your expenses, you become financially independent (ie, you don’t depend on a job for money). This of course depends on what your expenses are as well. So a huge salary is not enough to be independent, since many of us may earn heaps but spend heaps too. It all comes down to your savings rate. Here’s more about saving and investing.

The easiest way to start investing from your very first pay is to be in KiwiSaver. Employees are opted in straight away, so they don’t miss a payday. That money is joined by employer and government money and used to buy investments such as shares in companies or bonds (loans to governments or companies). But KiwiSaver is good for two things: a first home and retirement. For your other goals, you can invest beyond KiwiSaver into the many kinds of investment funds out there. Here’s where to compare them on Smart Investor. 

Not all women have, actually. The evidence points to us being better at investing than men (avoiding stunts like timing the market, trading often or speculating). We tend to find a better balance between risks and returns. But many of us have been on the investing sidelines, unsure of where to start. We’ve got to get in the game! Because of how investment returns compound over time, the sooner we start, the better off we’ll be.

What are the chances you might not achieve your goal through investing? That’s risk. When you’re investing, there are actually many kinds of risks you’re taking on (that’s why you're getting paid a return after all), not just one. There are risks that cause the value of your investments to go up and down, as well as the possibility that you might lose your money altogether. The law requires that the documents that come with an investment product must explain the main risks involved. For KiwiSaver and other investment funds, and bond and share offers, you’ll find these on Smart Investor.

For the riskiest of investments – ‘growth’ investments like shares and commercial property – you would typically experience the widest range of returns: anywhere from as high as 23.9% to as low as -9.0%. And statistically that’s 90% of the time, so some results could be even higher or lower. We can’t tell the future, but that gives you an idea of what’s achievable. (And if anyone promises you a higher return that’s outside of the norm, run! It’s most likely a scam.) Here’s our investor profiler to get more of an idea of what results to expect.

6 steps to get sorted

Don’t know where to start? Our 6 steps will help you to take control of your money.

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