Mailbag Special: Answering all your questions
At the beginning of your investing journey, it’s overwhelming. It doesn’t need to be, but it’s a lot to navigate complex financial jargon, choose the right investments, and understand your risk tolerance before you hit ‘buy’ on your first parcel of shares. We get a lot of questions coming through our inbox here at Equity Mates, and so to close out the year, we thought we’d answer as many as possible!
How do you monitor your share puchases if you’re dollar-cost averaging into the market?
One Equity Mate was wondering how to manage multiple purchases and sales. Bryce uses Sharesight, which simplifies the process by automating calculations and generating tax reports. Ren has a slightly more rudimentary approach (you’ll need to listen to hear what it is) but consults with his accountant to make sure he’s reporting correctly.
Is super just the same as dollar cost investing into an index? Should I just top up my super instead?
Superannuation offers a wealth of benefits for long-term savings. With its tax-effective nature, it’s a powerful tool for building a nest egg for retirement. However, it is locked up and away until you retire, so learning about investing and doing so outside of your super fun allows you freedom before you’ve finished work.
I’m under 18! Can I get started investing?
In Australia you can’t start if you’re a minor with your own account. However, for those under 18, options like CommSec allow parents to open accounts on their behalf. So if you’ve read the book, and are keen to jump start your early financial journey, talk to your parents and ask them to help jumpstart your future.
I’ve got $500… What ETF should I buy first?
Of course, you need to do your own research and invest according to your own financial goals. But if you’re thinking about investing in a diversified ETF, Bryce and Ren often look to diversified global ETFs like VDHG or DHHF. These offer instant diversification across various sectors and markets, which is key in minimising your risk.
I’ve got brokerage fees… How frequent is ‘too’ frequent to be investing? Brokerage fees can eat into your profits, so choosing the right platform is crucial. Superhero offers $0 brokerage on ETF purchases, making it ideal for dollar-cost averaging and frequent investments without incurring unnecessary fees.
Investing can be a powerful tool for achieving your financial goals. The most important step you can take is the first one – to start!
Getting your mindset right for 2024
Letting go of financial regrets is hard to do, but it’s also important to forgive yourself for things you might have done differently if you had your time again. But it’s hard to get your mindset on the right path, if you’re still beating yourself up for mistakes in the rear-view. Here’s are 5 steps to let go and move forward:
- Self-awareness: Acknowledge your mistakes without judgment. Yep! Have a good old look at your previous choices, and own them. This will help you understand and learn from them, preventing future repetition.
- Context matters: Remember, you made those decisions within specific circumstances. Consider external pressures, limited knowledge, or lack of resources that might have influenced you.
- Compassion, not criticism: Talk to yourself with the same kindness you would offer a good friend. (Unless you’re really mean to your friends?). But we all make mistakes, so acknowledge that you weren’t perfect but want to do better.
- Learn the lesson: View your past financial decisions as valuable learning experiences. You can help yourself by not repeating your mistakes, so this is all a way to understand how you’d make future choices.
- Release and move forward: This is definitely the hardest bit. Holding onto guilt and regret is a burden. Try not to focus on: ‘Oh if I’d just invested in insert thing here when I heard about it in 2012, I’d be rich!’ Guess what!? You didn’t. Focus on what you can control – the choices you’re making in the future.
What’s your biggest mental hurdle when it comes to getting on top of your finances in 2024?
- Fear of failure: “I’m worried I won’t be able to stick to my goals, and I’m afraid of making mistakes.”
- Overwhelm: “There’s so much information out there, it feels paralyzing to even get started.
- Lack of confidence: “I don’t believe I have the skills or knowledge to manage my money effectively.”
- Guilt and shame: “I feel bad about my past financial decisions, and I’m afraid to face them.”
- Lack of motivation: “I just don’t feel inspired to work towards my financial goals.”
This is an excerpt from our Get Started Investing Newsletter email. Once a week, for those , we’re featuring some of the most interesting content we’ve come across in this weekly email. No spam, we guarantee.