3 tips on getting started in investing from Australia’s best money managers

By Brett Kelly

June 12 2020
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Want to start investing but not sure how? Here are three tips from Australia’s best money managers.

Most people have something they have always wanted to do. A goal or a dream they have never quite got around to realising. It could be writing a book, or starting a new, more interesting and challenging career. For whatever reason, something else always gets in the way, a more “pressing” concern. Life drifts by without you even laying down the first marker towards achieving what you want. For many, the unachieved goal is becoming an investor.

The question you have to ask yourself is, “What is actually stopping me from doing it?” Particularly when, by having only a few dollars to rub together, you could begin a journey that creates real and lasting wealth.

Stop waiting for the right time

In investment, the best advice for getting started is to go for it. Today. No one else is going to fulfill your dream for you. Do you actually want to make it a reality, or is it something you claim to want without putting in the hard yards?

Successful people are those who take the scary plunge, then persevere for as long as it takes. Don’t wait for perfection. It may sound like stating the obvious, but you can’t be a good investor without actually doing it. Some people think they need to be well versed in all the ins and outs of investment before laying down their first dollar. It doesn’t work like that; learning is very much “on the job”. If you don’t know what compounding is and how it works, don’t let that be your barrier. Go find out.

Research

Once you’ve started, it’s essential you immerse yourself in the process and educate yourself thoroughly. Find out as much as you can about what you’re investing in. Andrew M. Clifford, CEO, executive director and chief investment officer at Platinum Asset Management, says putting in many thousands of hours of learning and reviewing is key.

“To be really good at this, you need to have a desire to understand how things work. That can be on a whole lot of different levels – from how a product is made, to how a system works, or how interest rates impact markets and growth.”

Carefully select your companions

Decide who you want on your team. They need to be people you can trust, but not “yes” people. You should have a clear, long-term plan early on of what you are trying to achieve and how you intend to get there. Then you need someone objectively keeping score on your progress.

Successful investing requires constant review, good advice and, in some situations, hard conversations. It’s a discipline where looking back is as important as looking forward, maybe even more so. You need to ask, “Why did this work, but not that?” Persistence is essential. Mistakes will happen.

Successful investing is not about easy, short-term gains. It’s a risky business by nature and there isn’t a single investor in the world who hasn’t stuffed up at some time or another. Evaluate, learn and adapt. Doing this will help you become attuned to the potential risks and your estimates will become more educated.

Remember, it’s your money. The only obstacles to what you can learn and achieve will be the ones you put in your own path. What’s so incredibly exciting is that anyone can own a business, even as employees. Buy shares and you can be sitting on the board, having a clear say in its operations.

There will be people reading this who are still thinking, “Yeah, but that’s a lot of work; I don’t have the time. Maybe I’ll do it in a few years when I can do it properly.” If that’s you, don’t lie to yourself any longer. You probably won’t ever do it.

For the rest, it’s time to get started, work hard and enjoy the ride. As Tribeca Investment portfolio manager Jun Bei Liu says, “Bravery and confidence in yourself go a long way.”

“If you aren’t afraid to be bold, with hard work and a determination to be yourself, you will shine; you can find that path less travelled. You will achieve what you always wanted.”

Brett Kelly is an author and the founder and CEO of Kelly+Partners Chartered Accountants.

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