Best Investments for Beginners in New Zealand: A Step-by-Step Approach

Investing is a key strategy for consistently building wealth and securing financial freedom, and it’s best to start investing as soon as possible. But of course, you should never dive into investing without doing your research or seeking out professional assistance. Smart moves now can benefit you greatly down the track, but the wrong moves can do more harm than good. 

Why Should You Start Investing?

Because investment returns build over time, it’s best to start sooner rather than later. Even if the investments you make now are small, they can grow and be worth much more in a few years. 

It’s common for beginners to worry about having too many risks, having too little knowledge and worrying about losing too much money. This is normal, and with the right guidance, you can get the confidence to make good investments without putting too much at risk.

Common Investment Options For New Zealand Investors

What kind of investment options do NZ beginners typically go for? 

KiwiSaver. KiwiSaver is a common and smart choice for New Zealanders, as it’s Aotearoa’s most popular retirement savings scheme. This allows investors to regularly contribute to their retirement fund. KiwiSaver is a low-risk, government-backed option, and it’s an ideal starting point. Beginning your KiwiSaver account now can greatly benefit you.

KiwiSaver isn’t a one-size-fits-all option, either - there are different kinds of funds and choices you can make, so you can pick one that suits you.

Index Funds And Exchange-Traded Funds. Index funds and ETFs are low-cost, diversified investment options that track the performance of a group of assets. They are relatively simple and low-risk when compared to traditional stocks.

Term Deposits. Term deposits are fixed-income investments where you deposit money for a set term with a guaranteed interest rate. They are low-risk and are ideal for short-term investment goals. However, they generally have limited growth potential. 

Property Investment. Investing in property involves purchasing rental properties to rent out to tenants. Buying property requires a larger initial investment, but it offers long-term wealth building through rental income. 

Shares And Stocks. Shares or stocks are investments made into particular companies, and they offer potentially high returns, liquidity and the opportunity to invest in specific businesses that align with your interests.

Starting Your Investment Journey

How do you start investing? Financial matters can be very stressful and complex, so it’s best to do your research and follow straightforward steps:

Step 1: Educate Yourself. First, research your various investment options. Learn about the basics of risk, returns and diversification. Even if you have an idea of what kind of investments you’re interested in, such as KiwiSaver or property investments, you should still look into other options just so that you can make a good, informed decision about your future. 

Step 2: Work With A Reliable NZ Financial Adviser. Making the wrong investment moves can result in devastating financial losses, so don’t go about it alone - work with a dependable, experienced NZ financial adviser. They can guide you through your investment options, answer any questions you have, analyse your current financial situation, discuss your overall goals and help you understand your best options. 

With their help, you can make smart choices that align with your goals and your current situation. 

Step 3: Define Your Financial Goals. With your financial adviser, define your financial goals. Why are you investing? Do you simply want to grow your wealth, or are you building towards something? Common goals are saving for retirement, buying a new home or saving for a significant life step such as higher education for your children. 

Step 4: Assess Your Risk Level. You should never invest more money than you can afford to lose. Consider your risk capacity and talk to your financial adviser about how much you can afford to invest. Smart investments mean that you can realistically grow your wealth, but in case something does happen and you do lose money, you’ll still be financially safe. 

Step 5: Start Small. Investing for the first time can be intimidating. Money is important, so putting your money into something that isn’t guaranteed to make more money can be stressful. So, most beginners choose to start small. Begin with small amounts that you’re okay with investing, and build confidence as you learn. 

Talk to your financial adviser about diversifying your portfolio. Rather than putting all of your financial eggs in one investment basket, look at a variety of options that you’re confident about. 

Step 6: Review Your Investments Regularly. Routinely review your portfolio with your financial adviser to make adjustments if necessary. Occasionally review your overall goals as well to align with your life. 

Starting Your Investment Journey With Future Wealth

Investing can be intimidating, but it doesn’t have to be. We at Future Wealth are committed to helping our clients build solid plans for their stable financial futures. We offer a variety of services for beginner and experienced investors, including risk management, KiwiSaver assistance, financial planning and more. 

Would you like to tell us about your investment goals? Call us on 0274988225 or use our contact page to reach us.

Future Wealth: Together, we can start a solid financial foundation for your future.