Do you have dreams of investing your money, watching it grow while you earn through other sources of income?
Most of the self-employed people we’ve talked to over the past few months said that they’d like to start investing in stocks and funds over the next five years – yet, there are many people out there who can’t achieve this goal because they earn an unsteady income that can vary within months and even weeks. In fact, a significant portion of self-employed people do not currently allocate money towards investments because of the “barriers” that accompany self-employment.
So we sat down with our friends at Sharesies to talk about how they’re empowering people to start investing, regularly and in small chunks. Through their top investment tips for self-employed people, Sharesies are helping to change the world of personal investment for all.
For some self-employed people, being able to invest has traditionally been out of reach - have you seen that changing over time?
Absolutely! Investing has traditionally been designed for those able to part with large sums of money on a consistent basis. While this has worked for some people, the lack of flexibility has been a big barrier for others. Online investment platforms are helping to break down the barriers that once made investing inaccessible for self-employed people.
For example, Sharesies is designed for investing affordable amounts, regularly, over a long period of time. You can buy, sell, and withdraw your investments whenever you want—and invest from as little as $5! Greater flexibility means greater accessibility and freedom to invest in the ways that work for you.
What are some of the trends that you’re seeing in New Zealand, in terms of how people manage their finances in relation to investing?
This year, we interviewed 1000 Kiwis to learn more about how people spend, save, and invest their money. We were interested to learn that the majority of Kiwi investors are Auckland-based males over the age of 60! Is the face of investing changing? We like to think so!
Currently, 80% of the investors on Sharesies are under the age of 40 and evenly split between men and women. 33% of the Kiwis we interviewed said that they would consider buying shares with their savings, and 59% said that they could invest $5 a day without changing their spending habits. With investing becoming more accessible than ever, it’s super encouraging to see more New Zealanders jump in and give investing a go!
That’s great to hear that the barriers to investment are lowering. So what tips would you give to a self-employed person who is just about to start their investment journey?
Set up KiwiSaver—put small amounts aside throughout the year to make use of the Government’s annual member tax credit. Learn by doing: you don’t need to know heaps to get started. Start small and grow as you go! Dollar-cost averaging: invest an affordable amount, regularly, regardless of what the price is…and stick with your investments for the long-term! Diversify your investments: whether it’s spreading your money across different regions, investment options, or something else entirely, don’t put all your eggs in one basket!
How would you compare the level of financial literacy when it comes to investing in New Zealand versus other similar countries?
When it comes to investing in shares, our research suggests that New Zealand is lagging behind other countries. 40% of Australians and half of all Americans own shares, but only 20% of Kiwis own shares—in fact, 4% of all Kiwis don’t have investments at all and aren’t planning on getting any investments in the next 5 years!
A big part of this is a lack of knowledge: only 35% of the people we interviewed said they understand how investing works. Knowledge is power, and those who feel knowledgeable about the share market are more likely to own shares. As a country, we still have a long way to go but we hope that in opening up the conversation around money we’ll be able to share the knowledge and help New Zealanders feel more confident about the financial decisions they make.
What’s the one thing you’d like to see change about the way that Kiwis manage their finances and plan for the future?
We’d love to see Kiwis feel more confident, empowered, and knowledgeable about investing! Whether it’s starting small, talking about money with their friends and family, or setting up a Kids Account for the young people in their life, we’re excited to see Kiwis take steps to grow their wealth and share their investment experience with others!
Sharesies is a Wellington-based investment platform that empowers people to invest in funds from as little as $5.