A Mum and Dad share market investment (New Zealand only)
Investing directly in the sharemarket is an option not available to the ordinary Kiwi because broker fees makes purchasing small parcels of shares uneconomic; then there is the question of diversification, the strategy of purchasing a number of shares from different industries; this is out of the question for small investors.
The best option is to invest in managed funds where everyone’s money is pooled together to purchase funds. It is just like a retail chain being able to purchase in bulk in order to purchase goods at a cheaper rate. Kiwisaver, the New Zealand retirement scheme is a perfect example of this.
A person on the minimum hourly rate working 40 hours per week would have $27.50 going into kiwisaver every week if they were paying 4% of their gross wages into KIwisaver.
This is a terrific way to build up your retirement funds!
There are other options available for Mum and Dad investors; the one I am going to talk about is Sharesies.
This is a managed fund just like Kiwisaver but where it differs from that scheme and other managed funds is that you are able to choose which companies to invest in.
It is a terrific way to build up your financial literacy with a minimum of outlay.
Check out these features of Sharesies;
1 Just $30 to join and $30 per annum thereafter
2 Start the fund with just $20
3 Invest as little as $10 in shares.
You will be given a reference number which is used when you deposit money in the sharesies bank account.
Think of money as a seed, if you sow seed in enough places it will reap you a nice harvest at a later date.
Money can really grow when you invest in a number of places and sharesies is an excellent addition to an investor’s financial portfolio; you can check it out here;
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