June 2021
Okay, so let’s get some context out of the way first.
Dave is a mid-twenties male. He’s originally from Wellington and studied hard at Weltec, followed by an apprenticeship to gain his trade qualifications. He made the move to Christchurch to be closer to his girlfriend, Grace.
These days, he’s working fulltime as a plumber for a small Christchurch outfit.
Dave’s girlfriend, Grace – also in her mid-twenties – is originally from Auckland, moving to Wellington for her university study.
She worked for a small tech company following Uni, but then secured a role as a Sales Representative based in Christchurch for a large pharmaceutical company.
The couple rent a townhouse in St. Albans, a suburb north of the central city. They moved in together when Dave moved to the city. The investment journey they’re about to start will be a ‘first’ for both of them.
Long-term goals
Dave and Grace have been together for some time and have recently started to think harder about securing their future – including purchasing a house. Like many young couples their age, they’ve asked their parents for support and advice, but realise that their parents are not in a financial position to help them.
They have watched from the sidelines as house prices have continued to increase and have realised that they need to do some other things to save for a deposit, having become frustrated by low levels of bank returns.
Dave and Grace both have KiwiSaver accounts, with Dave investing in one of the default providers’ “Balanced” fund, and Grace investing in a “Conservative” fund. They don’t follow their KiwiSaver too closely but have realised that the return’s on Dave’s “Balanced” fund is better than the term deposit rates at the bank. They are also aware that it can help them save for a first-home buyer house deposit.
Both of them realise that investment markets may provide an alternative pathway to securing their future, and they owe it to themselves to becomes knowledgeable about other investment opportunities.
Set a goal that is important to you
They’ve tried to see a financial advisor, but found the process inaccessible, due to the relatively small size of their available investment – right now, they’ve got $10,000 available to invest. Nonetheless, they are committed to saving at least 10% of their take-home salary towards investment.
First Steps
Dave and Grace have established an account with TradeDoor, a low-cost share investment platform that is easy for them to use. TradeDoor allows Dave and Grace to purchase shares and exchange-traded funds on the NZX and other stock markets around the world.
They worked out pretty quickly that browsing the TradeDoor app raised plenty more questions – for example, they soon figured out that the three-letter codes for shortcuts for companies or funds.
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It is important to know that NZSA does not endorse any of the companies or funds highlighted in this article. ‘Grace’ and ‘Dave’ are fictional characters; any resemblance to any person, living or deceased, is not intentional. ‘TradeDoor’ is not an actual share trading platform.
The commentary in this article is for information and/or commentary purposes only. It is not an offer of financial products, or a proposal or invitation to make any such offer. It is not financial advice and does not take into account any real person’s individual circumstances or objectives.