A plain-English introduction to investing — where to start, what to invest in and how to avoid the most common mistakes.
⏱ 8 min readBeginnerUpdated May 2026
Quick Answer
Start with: pay off high-interest debt first, build a 3-month emergency fund, then invest in a low-cost index fund (like an S&P 500 ETF or a diversified Australian ETF) through a brokerage account. Invest regularly and do not try to time the market.
Before You Invest — Get These Right First
Emergency fund: Keep 3 months of expenses in a high-interest savings account. You do not want to sell investments in an emergency.
High-interest debt: Pay off credit cards and personal loans before investing. A 20% interest rate on debt is a guaranteed 20% return when you pay it off — no investment reliably beats that.
Superannuation / 401k: In Australia, make sure you are consolidating super and not paying fees on multiple accounts. In the US, contribute enough to get any employer 401k match — it is free money.
The Simplest Investing Strategy That Works
1
Open a brokerage account
In Australia: Stake, CommSec Pocket or Pearler. In the US: Fidelity, Vanguard or Charles Schwab. Look for low or no brokerage fees and no account keeping fees.
2
Choose a low-cost index fund or ETF
An index fund automatically invests in hundreds or thousands of companies at once. This gives you diversification without needing to pick individual stocks. Look for ETFs with management fees (MERs) under 0.20% per year. Examples: VAS or VGS (Australia), VOO or VTI (US).
3
Invest a fixed amount every month
This is called dollar-cost averaging. You buy more shares when prices are low and fewer when they are high — removing the need to time the market. Even $100 a month builds significantly over decades.
4
Reinvest dividends
Set your account to automatically reinvest dividends. This compounds your returns significantly over time.
5
Leave it alone
Do not check it every day. Do not sell when markets fall. Time in the market beats timing the market — the evidence for this is overwhelming.
The power of compounding$500 invested monthly at a 7% average annual return grows to over $600,000 in 30 years. The earlier you start, the more compounding works in your favour.
Investing involves riskThe value of investments can fall as well as rise. Never invest money you cannot afford to leave invested for at least 5–7 years. This guide is general information, not financial advice — consider consulting a licensed financial adviser for personal advice.
Frequently Asked Questions
Very little. Many ETF platforms in Australia allow you to start with $100 or less. In the US, some brokerages offer fractional shares meaning you can invest any dollar amount. The important thing is to start — even small amounts grow substantially over time.
Statistically, a lump sum invested immediately outperforms monthly investing about two thirds of the time because markets trend upward over time. However, monthly investing (dollar-cost averaging) is psychologically easier and reduces the risk of investing right before a market drop. For most people, monthly investing is the better approach.
Both have merits. Shares are more liquid, require less capital to start and are easier to diversify. Property provides leverage and tangible asset ownership but requires significant capital and has higher transaction costs. Most financial advisers recommend a diversified approach over time.