Investing for Noobs

What do I need to begin investing in stocks and ETFs?

The first thing you need to do is to educate yourself about the financial markets.

ASX has free courses available here:

This will give you a basic understanding of financial markets and how to invest.

You could also read: Millennial Revolution

Which is a kick-arse blog by millionaires Kirsty Shen and Bryce Leung and has a beginner investing workshop for free (my favourite price).

You could also read: Afford Anything

Which is another excellent blog and podcast by Paula Pant, who writes about the tension between dividing scarce resources such as your time, your money, and your life.

The second thing you need is a brokerage account.

Stocks and ETFs are bought and sold from within brokerage accounts. These are generally free accounts that charge a fee to buy or sell shares (generally between $10-$30 per transaction).

How do you decide what brokerage account to buy?

I suggest contacting your everyday bank. ANZ, Commbank, Bendigo Bank etc all have the option to create brokerage accounts that let you buy and sell shares. If you already use netbanking, you will generally  be able to login to your brokerage account from your banks netbanking platform.

That’s it!

You’re ready to buy and sell shares.

You know what you want to buy (based on your education) and you know how to do it (with an online brokerage account).

NOTE: I am not a financial advisor. This blog is for entertainment purposes only. I’m not a CPA. I’m basically just a gal who has access to google. You should treat this blog with the seriousness you would treat ANYONE who has access to google. This blog was written in response to a question from Neko Loui. If you have financial question, I’m happy to try to answer it.

How to be Happy (Yes, even you).

I have lots of great relationships. I have good friends. I have good relationships with my family. I keep in touch with people. I give Christmas presents. My life is full of great relationships.

And my sister doesn’t talk to me.

In his book, Hardwiring Happiness, Rick Hanson argues that negative experiences are like Velcro, but positive experiences are like Teflon. That one negative experience will stick more, and take up more of our mental space than all of the positive experiences. That one difficult relationship will bother me more, than all the good from all the good relationships I have. Luckily, Rick Hanson provides an antidote to this.

He argues that whatever you don’t want to feel you need to spend 12 seconds to one minute feeling the opposite, as often as you catch yourself feeling that feeling you don’t want to feel. So, if you often feel afraid, you could spend 12 seconds feeling safe and secure several times per day. You could spend time remembering when you’ve been safe in the past, or imagining when you’ll be safe in the future. The aim is to deeply experience safety and security.

Neuro-plasticity is a new buzz word, but this is an excellent example of the mind and body’s ability to change itself and grow. You can literally change your brain’s defaults; your emotional reality, just by working on it for 12 seconds several times per day. So what’s the opposite of your regular emotions? Do you feel anxious and afraid all the time? Practise feeling safe and secure. Do you feel alone or like a failure? Practise feeling a sense of achievement or a sense of connection. Do you feel unloved or unappreciated? Practise feeling like other people adore you, or you’re fine just the way you are.

The point is not to ignore reality—reality might be that you need to be afraid of something real. This is for people who have “Velcro” negative experiences and want to get out of their innate negativity.

I’ve tried it, and I definitely felt better. Rick Hanson, Hardwiring Happiness: Highly recommended.

Review: ResiFund

ResiFund is an Australian residential real estate investment fund. On their website, they quote a return of 10.8%. However, if you read the fine print, they are actually quoting a 10.8% return for Open Corp, the company’s sister company. Open Corp provides financial education, and finds investment properties for investors. So it’s unclear where the 10.8% return is for investors who have bought and sold their investment properties through OpenCorp or if OpenCorp are keeping tabs on the properties they sell to other people.

ResiFund states that a significant proportion of their returns will come from quarterly distributions. However, they do not quantify what a “significant proportion” is. They also do not quote historically, what the yield is. This means that it is unclear what the anticipated capital growth is vs the anticipated rental returns are.

Resifund’s gearing policy is 50% of the current value of the assets. This means that should the fund be wound up, investors will not get anything. Of course, the intention is not for the fund to be wound up, and Resifund do anticipate a good return.

However, doesn’t everyone who starts a fund anticipate good returns? And wouldn’t everyone who starts a fund state that on their website (except Warren Buffett who famously stated to the public that Berkshire Hathaway was overpriced)?

ResiFund also sells by getting people to come to seminars on real estate investing. In my head I worry when I hear this. I feel that anything that can’t be sold on math alone, shouldn’t be sold.

Resifund is an Australian residential real estate investment fund. As with all investments; you need to do your homework, and make decisions as to what is best for your own interests, however the process gives me pause.

ResiFund, interesting, but be careful with your cash