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INVESTING is not an activity reserved for the super wealthy. Anyone with more than $500 can get started.

But the sharemarket is a daunting place if you don't know what you're doing. Saving up for a deposit on a house takes a long time. And investing in art and fine wine is risky business.

So if you have $1000, $5000 or $10,000 sitting in a savings account, what should you do?

Kirsty Lamont, director financial comparison site Mozo, says it depends on your goals. If owning your own home is what you want to do, you should focus on saving for a deposit.

"But if you're happy renting and not so fussed about owning your own place you could look at the stockmarket instead," Ms Lamont said.

The sharemarket traditionally outperforms every other investment class, Ms Lamont said.

"Right now interest rates are so low that if you've got $10,000 sitting in a savings account you're just wasting that money basically," Ms Lamont said.

If you have a savings account, in order to make up for the money you lose through inflation and tax you need to earn at least 3.5 per cent interest. And only one quarter of Australian savings accounts have ongoing rates above that amount.

Barefoot Investor's Scott Pape says there is no amount of money too small to invest in shares.

"Small amounts of money grow into large amounts of money. That's the secret to becoming rich," Mr Pape said.

"If you'd stuck a $1000 into the CBA when they first floated in 1991 it would be worth around $38,000 today, and they'd be sending you a cheque for $1800 a year."

But before you get too excited by the prospect of getting rich quick, there are some things you must take care of first.

Before making any investments, you should pay off consumer debts such as credit cards or car loans, says Robert Reid from RK Financial Planning.

Read more: http://www.news.com.au/money/investing/h...z2dK5IygUA
Ways to invest small amounts of money in the sharemarket

$500…

… is the minimum amount required to start investing. The reason is that amounts under $500 will have a big chunk eaten away by fees. For instance the typical share trade cost with an online broker is around $20, which is 4 per cent of $500 and double what you'd want to be paying in fees.

$1000…

… could see you investing in an exchange traded fund or individual shares. If you choose to invest in individual shares, purchase one stock and buy a new one every couple of months as you save.

$5000…

… would still be a good amount to invest in an exchange traded fund. If you want to invest in individual shares, build a portfolio of smaller high growth companies balanced with safer value-orientated stocks to spread risk. You could also invest in managed funds, but ensure fees don't eat away your investment by keeping fees at around 0.3 per cent, or less than 2 per cent of your total investment.

$10,000…

… means you should take the same advice as if you had $5000, but it just means you have a bit more to play with.

$20,000…

… is an amount you could invest in the sharemarket, or in an investment property. Older apartments are cheaper and have higher improvement potential. Renovations can add value to your existing house.
Good advice

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Learn me about stocks. I have no clue how that works.

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I put a bit in cBa about 5 years back when it was below $50, now over $70 & dividend reinvesting the whole time, so bought just before the crash at worst possible time ever, and its still doing okay, good stock.
You are an enigma Calo
I prefer to be referred to as a former luchadore somalian slap fighting pirate, every kid wants to be a pirate.
the market hasn't really gone anywhere for the past 10-15 years.

there is a way to beat the market, but you would have to use a combination of fundamental + technical
Yep I don't like the pure approach from either, fundamental or technical, in fact on their own it doesn't work in terms of beating the market.
I have half a dozen stocks that I trade because I know the general lines where they will hit & start to fall, so buy & sell up to that level, sometimes I am out timing wise in the very short term, but it will always correct itself, when it doesn't is something bigger at play, inside info some parties are using. No way I can account for that, so the stocks I hold are on a fundemental basis.
What platform do you guys trade on?

My bank has a deal where you can trade for a start up fee of $14! pretty good huh?

Personally I am more into property, if you have the cash look into investing in property in SE Queensland Australia.

I bought a place on Bridie Island in 1998 with my dad for $320K and its been appraised for $850K 2 years ago.

All retirees and services people so its a safe bet.
I believe you guys get some tax relief as foreign investors also.
What is this gayness? Real men invest in booze and bitches.
What about high yield bonds?
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Ha ha ^

Ey has a great sense of humour about these memes


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