Share Investing for Beginners

Investing in shares can seem intimidating at first, but it doesn't have to be.

Here’s a simple guide to get you started.

What Is a Share and How Do I Buy One?

A share is a unit of ownership in a company. When you buy shares of a company like Commonwealth Bank or Woolworths, you own a small piece of that business. Shares are bought and sold through a broker, who handles the transactions.

How Can I Make Money from Shares?

You can make money from shares in two ways:

1. Capital Growth: You buy shares at a certain price and sell them at a higher price.

   
   

2. Dividends: Companies may pay you a portion of their profits, usually twice a year, although not all companies pay dividends.

   
   

Is My Money Safer in a Savings Account?

While savings accounts are low risk, investing in shares can potentially offer better returns. However, shares are riskier, and there’s always a chance of losing money.

Getting Started

Before you invest, ask yourself:

-          How long do I want to invest?

-          How much am I willing to invest?

-          Will I make regular contributions?

How to Learn to Invest

The ASX website offers great resources, and apps and brokers let you invest with as little as $50.

How Much Do You Need to Invest?

Most brokers require a minimum investment of $500 for your first trade. Keep in mind that brokerage fees can eat into small investments.