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‘This can’t be legal’: How woman with zero experience became successful investor

Lucy Dean
·5-min read
Close-Up Of Hand Inserting Paper Currency In Bottle
Do you invest? Image: Getty

Yahoo Finance Breakfast Club: Women's Money Movement is a two-part series. Episode 2 will be about how to set and meet money goals on Tuesday 26th May 10am AEST. RSVP here.

When Sharon Connolly started investing, she thought: “this can’t be legal”.

At the time, she had zero trading or investing experience and had just received a $20 voucher for social trading platform eToro, which she thought might have even been a scam.

But she decided to use it. Three months later, that $20 was $63, and now she’s Australia’s most successful female investor on eToro.

Her advice for other investors? Just start.

Speaking on the Yahoo Finance Breakfast Club with fellow investor and founder of financial literacy organisation Money School, Lacey Filipich, Connolly said she started her investing journey “skeptically” but just kept putting more money in while reading up and testing her own tolerance for risk and volatility out.

“The only challenges that I had at the time was that I thought ‘This is actually so easy. How can it be this easy?’” Connolly said.

“There are various apps and you do need to understand the difference between the types of investments, but you can pick up your phone and you could have $50 invested in an investment vehicle within a couple of minutes.”

This is also why it’s important to understand the risks involved, she added.

Filipich, who bought her first property at 19 and grew up financially savvy, had similar advice: “Investing is actually a little bit like driving, in that the more practice you [have], the easier it gets.”

The first time you need to merge across three lanes, an accident happens up ahead, or you need to enter a highway is always terrifying. But over time, you’ll grow more comfortable and confident.

And the only way to learn to drive is to get behind the wheel.

“I hope people think about it as being a skill – it's not as hard as it looks,” Filipich said.

“The mechanics aren’t hard. It's about having that map: where are you going and how do you want to get there? Once you've got that it, becomes a lot easier.”

Here’s what else first-time investors should know:

The information is out there

Filipich said first-time investors can’t go past Australia’s main share market, the ASX, in terms of information.

“So if you're researching and you want to find out about a company or an exchange-traded fund or a listed investment company, then go to ASX.com.au, and it'll take you directly to the correct links,” Filipich said.

The government’s MoneySmart website is also a great resource for first time investors.

You don’t need thousands of dollars to begin, but watch your fees

The financial barrier to entry is now much lower than it was previously.

While investors can get started on platforms like eToro for $200, investors who want to make individual trades can now trade with fees as little as $10.

“The point is that the trading cost is very low these days, like super low – you can get a small trade for $7 to $10, whereas it used to be a couple hundred bucks because there was a human screaming down the line.”

She said many banks will have an attached trading service that investors can look into.

But, she added, it can be worth putting in a bit more money if you’re able to offset fees.

In particular, she said roundup investing apps which round up expenses to the nearest dollar or $5 and then invest the difference, can feature high fees.

“Just really look at those fees,” she said.

“Just make sure that it's worth it because sometimes the fees can be disproportionate particularly when you're starting out.”

Know what you want

Filipich said the best thing her investments have given her is time and the freedom to focus on life outside of work.

And while investing can help you reach your goals, like purchasing a house, paying for education or sustaining a fulfilling retirement, it’s critical that investors know what they’re willing to accept to get there.

For example, some investors may prefer a high risk but high-return investment strategy.

This sort of strategy would see them invest in one particular part of the market or asset type. If that does well, their investments will do well. But if that doesn’t do well, that’s their entire portfolio dented.

Other investors may choose to invest across a more diverse range of assets and companies, because they believe that as a whole the market will generally go up over time.

“Each one has different commitments, each one has different risks and it’s up to you to decide,” Filipich said.

Connolly agreed.

“Knowing more [than I did starting out], I have bonds, and I invest in other platforms to have more of a diversified portfolio,” she said.

Yahoo Finance Breakfast Club: Women's Money Movement is a two-part series. Episode 2 will be about how to set and meet money goals on Tuesday 26th May 10am AEST. RSVP here.

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Yahoo Finance Breakfast Club
Yahoo Finance Breakfast Club