Want to invest in

stocks?

Basically, you're wanting to invest in listed companies via the stock market. We'll use 'shares' as the catch-all term here.

Most of us (i.e. not professional investors) buy shares in the hope they'll go up in price, and they'll pay us dividends.

Some people feel shares are a bit like gambling. After all, you can't touch and feel shares the way you can a property.

Perhaps it's due to shares having a different value driver:

Shares go up in value thanks to human effort and ingenuity

Property goes up in value as it is improved and due to scarcity.

In the choose-your-own-adventure world of personal finance, here's some resources to help you learn about shares before you start investing.

TLDR; the highs and lows of share investing

Like all investment options, there are advantages and disadvantages to shares.

Here's a quick summary of the main pluses and minuses (by no means an exhaustive list!):

(+) Can start small

Because brokerage - the fee you pay when you buy or sell shares - is small these days, you can get started with as little as a few hundred dollars.

(-) You can lose it all

While rare, it is possible for a share price to go to zero. If you haven't borrowed to invest, at least you won't be in debt as a result.

(+) Minimal ongoing costs

You pay brokerage to get in and out, but you don't have to pay insurance, maintenance or rates on shares. Most ongoing costs come from managing your tax affairs.

(-/+) Ethics

You can invest in shares you consider ethical as an exponential vote for the future you want. Unfortunately, this can take a lot of research time.

(+) Relatively liquid

While not as swift as getting cash out the bank, provided there's not a trading halt you can usually sell your shares and have the cash within a week or so.

(-) Difficult to insure

There's no off-the-shelf insurance against share price going down, though some people use a product called options to create an insurance-like effect.

(+) Strict supervision

Listed companies have strict compliance regimes and are regulated to prevent investors losing money through poor conduct. Humans can still break the rules, of course.

(-) It can be stressful

Share prices move up and down, sometimes several times in the same day. Some people find this stressful (best bet: don't look!)

"Buying shares from a stock exchange is like buying an itty-bitty piece of a company. By buying a share, you become one of thousands - or millions - of owners of that company: a shareholder."

Lacey Filipich, Founder and Author of Money School

Excerpt from 'Money School: Become financially independent and reclaim your life'

Learn about shares

Whether you're thinking of buying specific companies or index funds (for example, ETFs or LICs), you can learn about the principles here:

Shares 101 Course, A$9

Take our short course on on how shares work, and the common rules of thumb you'll hear about shares.

Article: Five questions to ask

...before you start investing in shares (Kidspot article)

Article: Four decisions to make

...before buying shares according to a money expert (Kidspot article)

Listen: Podcasts

Lacey speaks about share investing regularly on radio and podcasts.

Read: Articles

Check out our articles for outlets like ABC and Kidspot, along with our in-house blogs.

Get the book

Money School's international award-winning book goes into how shares work.

Podcast and Radio Appearances

She Mines

You’re Not Bad With Money - Navigating Finances in FIFO

Length (mins):

ABC Radio Hobart

Why have Bitcoin and gold reached record highs? Starts at 1:08:57

Length (mins):

ABC Radio Perth

Greenwashing or genuine: Here's how to check the environmental credentials of your bank and super fund

Length (mins):

ABC Radio Perth

Cryptocurrency

Length (mins):

Articles

On shares

School News Australia

How teachers can build financial security beyond superannuation

Money School

What might personal finance look like in a climate change affected Australia?

Money School

Farewelling fossil fuels from my finances

Nine Honey

Expert's warning over 'Buy Now, Pay Later' payment options: 'People are going without meals'