Scott Pape’s investing in shares money challenge

Scott Pape: Welcome to the Barefoot Investor’s
60 60 6 challenges. Helping you get more money smart by the minute. My interest in investing began earlier than most. I remember being a primary school kid and
my dad, who was just a modest fuel truck driver, paid my pocket money in the form of
one share in an Aussie blue chip. Now, it was totally exciting to know that I was a part-
owner in one of the country’s biggest businesses, and it sparked my interest to learn more about investing. Now, this was life-changing for me and I hope buying
your first lot of shares will be just as life-changing for you too. It’s never too late to become an investor but starting early does help you take advantage of the awesome power of compounding. So, for your 60 second challenge I want you to discover the difference investing for the long term can make to your returns. Let’s say you sock away fifty bucks a week and invest it
into the share market each time you get to a thousand dollars. Assuming your shares earn 9 per cent a year,
in 30 years you’ll have 400-grand. But you’ll also have only invested
78-thousand dollars of your own dough. So jump on to MoneySmart’s Compound Interest
Calculator to see, with a little regular watering, just how big your investment seeds can grow. Okay, in preparation for buying your first parcel
of shares you need to get your accounts in order. So, set up a trading account with a discount online broker, which is generally cheaper than using a full-service broker. Now, your bank may even offer a free brokerage
deal when you open up a trading account that’s linked to your everyday bank account. Making your first trade isn’t as scary as it sounds,
in fact it’s kinda like internet banking. You can start with as little as a thousand bucks, just
transfer whatever money you’ve set aside to invest to your trading account.
You’ll see it sitting there as cash until you’re ready to invest it. You’re now set up to place your first ‘buy order’. So today, for my 6 day challenge, I encourage you
to make your first share investment… So long as you don’t have any outstanding
consumer debt and you have at least a couple of grand set aside for emergencies. For your first investment, I’d suggest looking at a
Listed Investment Company or LIC for short. LICs invest in a range of companies and other
assets and pay dividends from their earnings. Look for one with a solid track record and low management fees. Check out MoneySmart to find out more about
LICs to make sure they’re right for you. And you don’t need to check the share price every day.
That’s for traders, not long-term investors. Just set aside an hour a month to check how the company is doing, focusing more on dividends and the
underlying investments than the share price. So if you’ve been putting off dipping your bare foot into
the stock market, it might be time to start now.

Paul Whisler

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