Starting out thread, hints, tips... anything really

[whitey]

Hey, new here, just wanted some advice from people that seem to have it going on.

2nd year of full time work, trying to long term plan some savings/investments/portfolio. Have a partner, so two incomes, currently renting (cheaply). Have kiwisaver @ 2%, should i increase? I want to build a nestegg pretty much. 22 years old

[STRAT]

Hi Whitney
No magic answers here.

Questions need to be more specific and targeted at the right punters.

Welcome to Share Trader

[karen1]

Hi Whitey

You've already used the best tip - joined Share Trader! Loads of sound advice here, just go back through threads like this one, and Investment Strategies for starters. There are some fantastic posters on this forum, willing to share their knowledge/experience with patience.

Also many gems to be gathered among daily posts, even if not about a topic which particularly interests you, so take the time to read or at least skim each post until you get more familiar with the forum, and various posters.

If charts interest you, look up Phaedrus in the Members list. He no longer posts, but was well followed.

I might get shot down in flames here, but as Kiwisaver keeps getting tweaked, I would myself be reluctant to up the anti, especially at your age, but with the proviso that you need to have the discipline to instead invest what you may have increased that contribution to into something else on a regular basis. And that something else could be a host of alternatives - type Kiwisaver in the search box on this forum to see the thoughts of others.

And as Strat said, welcome!

[CJ]

I wouldnt increase kiwisaver, Do the minimum to get the benefits and no more (That money will be tied up for a long time though you may be able to get it out for a first home purchase)

Do you want to trade or be a buy and hold investor? Do you want to stay with NZ or invest in australia as well?

Choose a few of the bigger stocks to follow (not invest necessarily) in the papers and on this forum. That way you will see what factors influence price and what other investors are thinking about them. eg. the FBU (fletcher building) thread is quite active so you will see lots of peoples thought (buy and hold, chartists, fundimentalists etc) on whether it is a buy, sell etc.

[whitey]

ok so kiwisaver seems not the way. what about smartshares or a managed fund from rabo. i need something i can chip away at to atleast raise funds for that first investment. how much would i need

[karen1]

Sorry if I'm asking the obvious, but have you worked out a budget? It's a very good way of seeing what you can afford, whether it's to spend or save. With two incomes, is it possible you can live on one (or 1.5) and save the rest? With your lives ahead of you, and your attitude towards implementing a financial plan, you should do well, once you have that plan in place.

So, your "how much would I need" question might be answered with "how much can you afford". And I'm not asking for figures - no one here will do that.

Diversification is a much used word, and one to keep in mind. So some in shares, some maybe in managed funds, and definitely a few spread term deposits, maybe some bonds, well researched, would be my thoughts, but I'm sure others will have some better ideas.

You might like to add this site to your favourites: http://www.interest.co.nz/saving/call-account/
The panel on the right gives you some good choices.

[whitey]

Thanks Karen, in terms of a budget, nothing really in place as such. I operate on a 25/25/40/10 spilt with any money that comes in, 25% for each of us, 40% towards the bills and 10% towards savings. This is our first year living together and that spilt has worked fine, although we probably could save more and less towards the bills.

[karen1]

OK, that's a pretty good looking divvy up of finances! And if it's working for you, that's great. Budgeting is still a great thing to do, for long term planning. You can project a budget as far, or near, into the future as you wish, and if you are both focussed, take satisfaction in realising your projections. Although extremely difficult to do in the current climate, imo well worth the exercise!

You sound as though you are focussed on getting ahead, and good luck to you. I would also guess that you are awake to all the tricks of credit card use - pay the full amount owing each month, and bank accounts - make your bank work for you, not the other way round - make sure you are set up with accounts so you pay the absolute minimum or no fees. These two latter points I mention because you can lose a few hundred dollars and more annually if you aren't awake.

At your age, we worked spread term deposits to the max, but that was 40 years ago. Today, it's hard to find a decent rate, although if you've checked that link I gave earlier I note there are some reasonable rates under Building Societies atm. You would be surprised how things add up when you tuck away the odd $1000 here and there.
As for shares, don't know if you have any yet, but take a look at this for some sound suggestions http://www.sharetrader.co.nz/showthr...here-to-invest. CJ's comment above re stocks is very wise!

Also might be of interest to you https://www.asbsecurities.co.nz/section240.asp Bear in mind if you do your buying using an online broker the commission you will pay is considerably less than paying for the services of, for example, the likes of Forsyth Barr, Craigs, etc. Setting up an account with an online broker is very easy to do - I use ASB Securities, and find them very helpful if I need to talk to someone, otherwise I do it all online. Take a tour around their site, there is some pretty good learning material on it, as well as Direct Broking, and there will be others.

Another site I like is http://nz.finance.yahoo.com/q?s=FRE.NZ&ql=0 I've put it on the FRE (Freightways) page - under More on Freightways on the left you have a few options to learn more, like historical price, always interesting.

You will see a lot of the posters on ST have an addendum on their posts, DYOR - doing your own research is of course a good way to learn.

[buns]

Thanks Karen, in terms of a budget, nothing really in place as such. I operate on a 25/25/40/10 spilt with any money that comes in, 25% for each of us, 40% towards the bills and 10% towards savings. This is our first year living together and that spilt has worked fine, although we probably could save more and less towards the bills.

I wouldn't worry about earning returns to much at 22. It's bloody hard to do, and takes a lot of time to master. Simply put you have better things to do and I'm thinking you are doing these things if your spending 50% of your income on things other than bills and savings - good work!

Pull out a simple spreadsheet, assuming you earn at least average wages and budget sensibly - assume you can compound savings at 10% from Age 25-40 and you will easily achieve net assets well over $1m at 40 years old. (if you cant do this calc you need to read more books)

Thats plenty of money, and yes if you start now that may turn into another 100k or so, but the difference between $1m and $1.2m is nothing compared to $1m and an awesome youth full of sweet times.

Kiwisaver will do fine whilst you invest in double brown.

When you get to 25-26 or can't handle the hangovers no longer, start reading up on investing. By then you will also have 4-5 years of exp behind you which will add to your knowledge and skills for investing. Don't enter a game when the odds are against you.

[buns]

If thats not for you.

Find proven people, and read/learn everything they have done.

Note - Sharetrader is not the place for that when for $1 on trademe you have Warren Buffet etc.