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Investing in property and shares can be a great way to give yourself a financial boost. Here are some top tips for investing your hard-earned cash.
Finance guide investor

Investing in property and shares can be a great way to give yourself a financial boost, but it’s best to do your research. Often people find it hard to get started in property, while the share market can seem like a daunting prospect, especially given the stories – and movies – of devastating stock market crashes. But if you’re looking for an investment that will steadily increase in value over time, property and shares could be just the thing. Here we have some helpful tips for investing your money. Follow them and you’ll be well on your way to becoming a savvy investor.

I want to invest my money in property, how do I start?

There’s so much information out there about property investment that it can be quite daunting. It’s a good idea to speak to a property adviser. They operate in all the major cities and regional centres. Word of mouth is best when finding the right person for you. They’ll first learn your goals and objectives, then your borrowing capacity and how much you can afford to spend. They’ll also consider your risk profile. A professional organisation can help answer your questions. This is a very important step to take before even looking for a property, but unfortunately, most people skip it, instead diving straight in. Be careful when you’re looking for a professional. Use caution with a person who is promoting a particular organisation – they could be marketing property on behalf of developers. For more information about property investment, go to the Westpac Property Investment Hub.

It pays to do your research before parting with your dollars.

What are shares?

When you buy a share, you’re essentially buying a piece of a company. Businesses sell these shares in order to raise money, and, in exchange, you own a stake in the company and may receive dividends and other benefits as a result. The price of a share is based on the company’s value divided by the number of shares released – so the value of your shares will fluctuate as the company’s worth changes.

Should I invest?

Investing in shares offers a flexibility other investments don’t. With shares, you can buy more than one and choose to sell them when you need. The other benefit is that since shares can rise in value over time, you could sell them for a profit, otherwise known as capital growth. Money is also made via dividends – a portion of the company’s profits which is sometimes passed on to shareholders. You can take this as a cash payment or use it to reinvest in the firm.

By spreading your investments between different sectors, you can help to minimise your risk.

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Are there risks?**

Every type of investment is a gamble, and the share market is no exception. A company’s value can go up or down very quickly, and external factors can have devastating impacts on the market. Larger, more established companies are considered less risky than smaller start-ups, and spreading your investment over a few different sectors, eg energy or healthcare, should ensure parts of your portfolio continue performing even if others drop.

How do I start?

Most Kiwis typically access the share market with the use of managed funds. This is where the money is pooled with other investors and spread across maybe 20, 50 or even 100 different shares. Your risk is greatly reduced and the costs are shared among hundreds, if not thousands, of investors.

Which shares should I buy?

Whether you’re relying on the expertise of those in the know or choosing your own investments, diversity is key. Individual sectors can be impacted from time to time by, say, government legislation, so you don’t want to put all your eggs in one basket by channelling all your capital into just one area.

You can now save for a rainy day without needing to make use of your trusty old piggy bank.

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How does Kiwisaver work?**

With over 330,000 of us signing up, KiwiSaver is one of the country’s safest long-term savings initiatives. Completely voluntary and open to New Zealand citizens under the age of 65, there are many different schemes available, and most offer a range of investment funds you can choose from. However, if you find this is a daunting task, the government will pick a “default” provider on your behalf, or you can stick with the preferred provider your employer uses.

There are two key things to consider when choosing a fund – the associated risk and return of the fund, and the fees it charges. The greater the risks, the higher the return, so go for something you feel comfortable with. Once you are a member, you can change funds at any time and, as long as you have been a member for over five years, you can withdraw all your savings once you turn 65. After three years of contributing to KiwiSaver, you may also be entitled to a first home deposit subsidy of $1000 for each year you’ve been contributing, up to a maximum of $5000 for five years. For more information, go to the Westpac KiwiSaver website.

Top tips for investors

Ready to enter the world of buying and selling? Use this checklist:

  1. Establish a time frame for your investment from the get-go and make sure you stick to it.

  2. Ensure your investment terms are clear and transparent, and you know where your money’s going.

  3. Keep your investments simple and don’t fall for gimmicks.

  4. If you’re confused by something, ask questions, or educate yourself by visiting finance websites.


In association with Westpac***

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