Ever since I shared about Sharesies on my Instagram about a year ago, I’ve been receiving regular DMs asking how it works and what to do. Have you heard of Sharesies? It’s a place where you can invest into Index Funds and Companies. It’s like an alternative place to invest your savings. There’s more risk, but can also be more reward too! Disclaimer: I’m obvs not a financial advisor, this is just what I’ve learnt and my experience.
P.S. I’ve used my referral link throughout this blog post. You get $5 when you sign up and I do too! Here’s my referral link: https://sharesies.nz/r/84R74M
Before taking the plunge…
Just over a year ago I heard Aleisha Rutherford talking about Index Funds and Sharesies on her Instagram. I was intrigued and started looking into it. My husband and I knew that we wanted to make our money work for us. We listened to a podcast together about investing and being financially free, then I read The Latte Factor, a book by the podcast guest David Bach. It’s a quick read, written as a fictional story. It helps teach about investing, compound interest and the stock market, in a fun and creative way that doesn’t leave your head hurting. Aaron and I also l found an old (like real old, like 1960s) board game called Stock Market at his parents’ place and spent our nights playing that. These things helped us to have a bit of knowledge about investing before dipping our toes in. This isn’t totally necessary as you learnt as you go when you invest too! Sharesies also has a bunch of blog posts on different topics too.
How we got started
We decided to each get Sharesies accounts. We loved how its so simple, easy to understand and use. You don’t need to start with thousands or even hundreds of dollars. You can literally put $5 and go from there. We decided to buy shares in Index Funds first before branching out into individual companies. We excitedly would check our investment portfolio daily to see if we’ve made gains. This helped us to get an understanding of how it worked, watch for trends and more.
Index Funds? Individual Companies? What?
Ok an Index Fund is a collection of companies. For example, one of the index funds I invest in is NZ Top Ten, which is made up of the top ten NZ companies. Instead of putting all your eggs in one basket, they’re distributed across multiple baskets which is generally a bit safer. You also have the choice of investing in individual companies like Meridian and Spark. These can offer better reward but can be riskier too, because if that one company happens to go bust, then you lose your money.
How do you make or lose money?
There’s two ways!
1.Dividends: This is a small (often regular) payment from the company that is similar to interest you receive in a bank account. Its like a ‘thank you’ for investing in the company. A dividend is the distribution of a company’s profit to its investors.
2. Change in share price: This is where you can make the bigger gains (and losses). The price of shares can go up and down daily. The share price depends on a whole lot of things that are kinda above my head, BUUUUT the basics of it is this, if the company is doing well, the share price continues to go up. The idea is that you want to buy shares at a lower price, then sell them when the share price is higher, that’s how you make a profit. For example, you might buy 5 shares at $10 each in The Warehouse, investing $50. 3 months later the share price has dropped to $9, so your investment is now only worth $45. Another 3 months passes and the share price is now at $13, meaning your investment is worth $65. You only make a loss or a profit at the time you sell you shares (which you can do at any time), so it pays to keep your money in until you’ve made a profit.
How do you know what to invest in?
Sharesies has a bunch of tools that helps you make your decision. You can see what companies are paying good dividends, what ones continue to have rising share prices, or the opposite. I tend to look for companies or funds that have a good upward trend. I’m not interested in stagnant companies. At present I have invested in 9 different companies and index funds. There have been times where certain circumstances have made me invest in certain companies, for example when Covid lockdowns hit, the Air NZ share price dropped dramatically so I decided to buy shares then, as I knew that they would likely rise again at some point and I could make a profit. Super smart investors keep an eye out for those kinds of things. Don’t let that overwhelm you though. Start with index funds which are a bit more stable and require less knowledge of trends.
How much do you invest in Sharesies?
We like to regularly add to our investment portfolio. We both get paid (through our farm company and through doTERRA) monthly and transfer a portion of that to our Sharesies accounts. Because we get paid different amounts from month to month, we invest different amounts each month. Some choose to set up an automatic payment and have a regular amount going to Sharesies weekly or fortnightly. Once Sharesies receives the money, its then available in your Sharesies wallet to invest
So how is your investment looking?
Currently I’m up 5.79% on the money I’ve invested over the past year. I’m pretty happy with that, considering I have taken money out at times AND have slowly built up my portfolio rather than investing a large sum at once. The current interest rate for a $5000 minimum term deposit at my bank varies between 0.4% and 0.95%, so I’ve made back far more than I could have with my bank. Investing is obviously a long term game, so I plan to keep my money in for as long as possible.
Get Started
If you want to get started with Sharesies, feel free to use my referral link here: https://sharesies.nz/r/84R74M
