How to get started investing in New Zealand

It’s worth knowing your ‘why’ before you invest. Start by deciding on your purpose and your goals. What is it that investing will help you accomplish? 

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

Our goal planner can help you put some goals in place. 

Ask yourself: how long do I want to invest for? 

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 suits 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, you can ride out the ups and downs of markets for a while. A basket of shares in a ‘growth’ or ‘aggressive’ fund has more potential for higher returns over time, along with bigger ups and downs. 

Do I need to get my money out quickly? 

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

Property is low liquidity, because it takes time to sell and may be expensive. So is KiwiSaver, as your money is generally locked in until you turn 65. Exceptions include buying your first home or significant financial hardship.

“I invested in the sharemarket with free cash after about 35 and twice needed cash quickly and sold down shares.” 

– Scott 

Every investment comes with some risk, which is the chance you won’t get back what you expect, when you need it. Here’s how risk and return typically work. 

• The higher returns you chase, the more risk you have to be prepared to accept. 
• Think of your future returns as you getting paid for taking on that risk.
• Higher-risk investments, like shares, go up and down more but have more potential to grow over the long term.
• Lower-risk investments, like bank deposits and bonds, are steadier but tend to grow less.
• The longer you can leave your money invested, the more time you have to ride out the ups and downs. 
• Important: any investment that promises high returns with no risk is a scam. Walk away! Here’s how to protect yourself from scams.

Risk and return is the classic balancing act with investing. How much risk is right for you? Answer a few questions in our investor profiler to find out what type of investor you are. It also shows a typical mix of investments for that type.

Based on the type of investor you are, you’ll typically have a mix of investments that suits you. This mix is how much of each kind of investment you hold, such as shares, bonds, property or cash. 

• More growth assets (shares and property) mean more ups and downs, but more potential to grow. 
• More income assets (bonds and cash) mean steadier results, but less potential to grow. 
• Defensive and conservative funds hold mostly income assets. Growth and aggressive funds hold mostly growth assets. Balanced funds sit in between. 

Here’s how much each fund type holds in growth assets, as used on Smart Investor and in our KiwiSaver fund finder. 

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. 

Spread your risk by diversifying 

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

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

The solution is to hold lots of bonds and shares in a variety of companies, industries and countries around the world. Some investments will go pear-shaped. Others will do well. 

Spreading your risk in this way helps smooth out the ups and downs in the markets. It also makes it less likely that one bad investment knocks you off course. Investment funds do this for you. Here’s more on how investment funds work.

Before you put money into any investment, it’s worth knowing: 

• What you’re actually buying, and how it makes money 
• What fees you’ll pay, and how they compare with similar options 
• How your returns will be taxed 
• What the main risks are, as explained in the product disclosure statement 
• Who you’re dealing with, and whether they’re on the Financial Service Providers Register. 

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. 

Your research needs to find clues. These can come from online data, financial advisers or industry experts. It’s worth reading all the documents for the investment you’re considering, such as the product disclosure statement. We’ve included these for KiwiSaver and other funds on Smart Investor. 

Ask yourself: what costs come with this investment?

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 product disclosure statement. Good investments are transparent. 

If your KiwiSaver or managed fund is a portfolio investment entity, your returns are taxed at your prescribed investor rate (PIR). That’s 10.5%, 17.5% or 28%. If you don’t tell your fund your rate, it must use 28%. Here’s how to find your PIR with Inland Revenue. If overseas shares you hold cost more than $50,000 in total, the foreign investment fund rules may apply. 

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. 

“[The tools] helped me change from a high fee investment that I later felt was not worth it, and am much happier with the other options on the comparison tools that helped me to find alternatives.” 

– Kim, 25–34 

Compounding is when your returns start earning returns of their own. The longer you’re invested, the more it works for you. Here’s an example. 

• Invest $50 a week for 30 years and you’d put in $78,000. 
• If it earned 5% a year after fees and tax, you’d end up with around $177,000 (before inflation). 
• $99,000 of that would come from returns, not your own contributions. 

Run your own numbers in our savings calculator to see how good this gets! 

The earlier you start, 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 in the market, not timing the market. Jumping in and out with quick trades 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 use ‘dollar-cost averaging’. That means investing a set amount regularly, buying less when investments are more expensive and more when they’re cheaper. It’s a great system for growing your money over time. 

“When I was 20 I wish I knew then what I know now about money and the power of compound returns on investments, given enough time!” 

– Sally, 45–54 

These days you can start with a small amount. Online investing platforms such as Sharesies, Hatch, InvestNow or Kernel let you buy shares and funds in small amounts. To start, it helps to map out your spending plan (aka your budget) so you can free up more money to invest regularly. Here’s where to start your plan.

You may already own shares through KiwiSaver, so it’s worth checking how much. That way you don’t take on more risk than you intend. Then work out how much of your money you want in shares overall (your mix of investments). To find the most appropriate mix for your situation, try our investor profiler. Our guide to how investing in shares works covers the rest. 

The cost of doing nothing is known as the ‘opportunity cost’. It’s what you could’ve gained when opportunity knocked. There’s also what you lose over time through inflation and tax. Money set aside in a low-interest account for many years can lose buying power as prices rise. For long-term goals, investing gives your money a chance to stay ahead. See how compounding works. 

It’s worth getting to know the main kinds of investments, such as bank deposits, bonds, property and shares. Each has different levels of risk and potential return. You can invest directly or through funds that hold a mix of them. For how much to invest, work backwards from your goal and when you’ll need the money. Here’s more on the different kinds of investments. 

You don’t have to choose. You can build an emergency fund alongside your investing. An emergency fund means that if something unexpected comes up, you won’t have to sell investments at a bad time or turn to debt. Once it’s in place, you can put more towards your investing. Here’s how to build up your emergency savings.

It depends on your interest rates, your goals and how you feel about risk. Paying down debt reduces the interest you pay, whereas investing could earn more (or less). Our guide to getting out of debt quickly can help you plan, and a financial adviser can help you weigh it up for your situation.

Often, yes. Returns such as interest and dividends are generally taxable. If your KiwiSaver or managed fund is a portfolio investment entity, it pays tax for you at your prescribed investor rate (PIR). It’s worth checking your PIR is right, or you may be taxed at the 28% default. If overseas shares you hold cost more than $50,000 in total, the foreign investment fund rules may apply. Check with Inland Revenue or a tax adviser if you’re unsure. 

No. What matters most is a high savings rate. That means putting large portions of your earnings aside and investing them. When your investments earn enough to cover your expenses, you become financially independent (ie, you don’t depend on a job for money). A big salary alone isn’t enough if you spend heaps too. Here’s more about saving and investing.

The same principles work for everyone. Set a goal, choose an investment mix that suits you, keep an eye on fees and give it time. Because investment returns compound over time, the sooner you start (even with small amounts), the better off you’ll be.

KiwiSaver is a natural way to start investing from your very first pay. If you’re eligible, aged 18–65 and starting work with a new employer, you’re automatically enrolled. From 1 April 2026, the default contribution rate is 3.5% of your pay, matched by your employer, rising to 4% from 1 April 2028. If you’re eligible, the Government adds 25 cents for every dollar you put in, up to $260 a year. That money is used to buy investments such as shares in companies or bonds (loans to governments or companies). KiwiSaver is designed for buying a first home and for retirement. For your other goals, you can invest beyond KiwiSaver. Here’s where to compare investment funds on Smart Investor. Find out more about 2026 KiwiSaver changes from Inland Revenue.

We’re not able to endorse or recommend specific investment products, especially because we don’t know your financial situation or your investment goals. The right investment for you depends on your goals, your timeframe and how you feel about risk, not on what’s popular right now. Start with your investor profile, then compare funds that suit it on Smart Investor by fees, returns and risk. Remember that past returns don’t predict future ones.

Growth investments like shares and commercial property typically have the widest range of returns. In a year, they range anywhere from as high as 23.9% to as low as –9.0%. That range covers 90% of the time, so some results could be even higher or lower. These figures are based on Sorted investor profiler assumptions. We can’t tell the future, but that gives you an idea of what’s achievable. (If anyone promises you a return that’s well above the norm, walk away. It’s most likely a scam.) Here’s our investor profiler to get more of an idea of what results to expect. 

We all have so much information at our fingertips, including on the markets and their effect on our investments. But that’s not always a good thing, especially when we can see our KiwiSaver balance fall that much more often. It can put us off investing entirely. But 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 investments on sale. Here’s more on investing in our world of uncertainty. 

If by ‘safer’ you mean investments with fewer ups and downs in value, then you’re looking for ‘income’ assets such as bonds and cash. Of all the kinds of funds (including KiwiSaver), ‘defensive’ funds hold the most bonds and cash, so they’re the least likely to see sudden drops. You won’t get the same growth potential as other funds, so they suit money you’re going to use soon, especially within the next 1–3 years. Here are all the defensive managed funds to compare. 

All investments come with risk, but the level of risk varies greatly. A good place to start is checking your attitude towards risk. There’s no sense losing sleep over your investments, after all. It also helps to look at how well placed you are to take on risk, such as your job security and level of debt. That way you can base your decisions on the right amount of risk for your situation. Our investor profiler can help.