The new year is here and with it, plans to improve our financial situations.
And according to Ladies Finance Club founder Molly Benjamin, there’s never a better time to begin investing than right now.
“From a practical sense - we have inflation on the rise and interest rates not doing a lot, so your cash in the bank is actually going backwards,” she told Yahoo Finance.
“If you have your emergency fund full, no bad debt - credit card, buy now, pay later, etc - and don't need the money in the next three to five years, then really, why not give investing a go?”
For the past three years, Benjamin has been on a mission to help more Australian women begin to invest and build wealth.
That culminated last year in the Ladies Finance Club’s $100,000 virtual trading competition with eToro, which saw 2,000 women compete to see who could deliver the greatest returns on a virtual $100,000 portfolio over six weeks.
Now, six weeks after the competition has ended, the participants are keen to try their hand at investing with real money.
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31-year-old product designer Melissa Barrass had considered investing to be “scary and unpredictable” and admitted to struggling throughout the competition, in particular in understanding how the platform’s Stop Loss feature worked.
However, weeks into 2022, she decided to take the leap and invest real cash.
“It was time and I am in it for the long run,” she said.
She invested $1,000 into Betashares popular ETHI ETF and plans to continue investing $300 into the ETF every month.
She’s also funneled $1,000 into the micro-investing platform Spaceships Voyager’s - Earth portfolio. She’ll add $200 to that every month.
“Both funds lean to the ethical side, which is extremely important to me and I see a very strong future for the businesses within,” she said.
For Barrass, the key to beginning to invest was simply wrapping her head around the easiest brokerages to work with.
“Spaceship's onboarding was quite enjoyable, and I used Stake to buy my Betashares ETHI ETF stocks.”
25-year-old vet student Sarah Webb, who also participated in the competition, believes the best thing she learnt was the patience to play the long game.
“The hardest part was understanding how to avoid making a loss, when to buy in the trend and how long to hold onto the stock for - perhaps years in some cases,” she said.
Competition winner Diksha turned her $100,000 virtual portfolio into $125,015 after investing in Shopify, EWJ, Alibaba Health and Chip Tech.
“This was my first time investing. I felt confident knowing it was risk free,” she explained.
“I'm excited to start my investing journey in 2022 and finally found a pathway to financial freedom.”
Eight steps to start investing
“The very first step is to think about how long you want to hold the investment for- what’s your time frame? [Then], how much do you want to invest?” Benjamin said.
The final step is to figure out the “why” behind investing. That will help people decide how much to invest, their risk tolerance, time frame and investments.
“From there, the investing part is quite simple,” Benjamin said.
“I always say buying shares and ETFs online is very similar to shopping online.”
Here’s how it’s similar to buying online:
Pick a platform (eBay) / Pick a platform (Superhero)
Create an account / Open a trade account
Search what you're looking for / Find your investment
You check the price / You check the price
Place a bid / put in an asking or limit order
You win the item / you buy the investment
You receive a confirmation email/ You receive a confirmation email
A few days later, the item is sent to you / Your investments appear in your account.
However, the competition also highlighted some key lessons new investors needed to remember.
“What many of the ladies learnt from this competition is don't day trade - you just lose out,” Benjamin said.
“Stick with what you know, know what you’re investing in, do research and … don’t try and stock pick.”
She quoted Vanguard founder John Bogle: “Don't look for the needle in the haystack. Just buy the haystack.”
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