Life is full of things that cost money – from your education and adventure travelling, to the ultimate goal for many young Kiwis – a home to call your own. But saving for all of these things can be a slow and frustrating experience.
Fortunately, you do have options. An Investment Fund is a great way to grow your personal savings. And they’re not only for wealthy, experienced investors. In fact, you can get started with a small amount, with absolutely no prior experience in investing. These eight tips will help you to get started!
What is an Investment Fund?
Instead of investing directly into the share market yourself, you can put your money into a professionally managed Investment Fund. Investment Funds make becoming an investor really easy. You get the benefits of a professionally managed portfolio without having to do all the detailed work yourself. And when you join an Investment Fund, you become an investor in some of the very best local and international companies and brands that you may well use on a daily basis.
And what about KiwiSaver funds?
A KiwiSaver fund is very similar to an Investment Fund. The main difference with an Investment Fund is you don’t have to wait until you’re buying your first home, or you’ve reached the retirement age, to access your money. This means you have a bit more flexibility and can use Investment Funds for shorter-term savings goals. If you can afford it, you should definitely consider having an Investment Fund alongside your KiwiSaver fund.
Set yourself up for success
When you’re choosing to invest, it’s important you consider three personal factors. The first factor is, what are your goals – what are you trying to achieve with your investment? The second is your timeframe – how long can you leave your money invested before you’re likely to need to make withdrawals? And the last is your appetite for risk – are you looking for a lower-risk fund that aims to produce lower, but more predictable returns? Or are you wanting a higher-risk fund, that aims to provide higher returns, but with more ups and downs in value? If you’re not sure, our Digital Advice tool can help you choose a Milford Fund that might suit you.
The power of diversification
The old saying ‘don’t put all your eggs in one basket’ is very relevant when it comes to investment. Diversification is crucial. A well-managed Investment Fund can reduce your risk by diversifying across a wide range of assets (such as company shares, listed property, bonds and cash) in different industries all over the world.
Find a trusted partner
Choosing someone to manage your investments is a big decision. You want to ensure you’ve done your research and chosen a partner that is a good fit for you. Some things to consider include – are they experts at investing? What is their performance track record? Do they offer financial advice? Are they transparent? Do they invest their own money in the same funds as you? Do they communicate well? What do their customers say about them? Do they invest in a sustainable way? Do their values align with yours?
The sooner you start, the better
Long-term financial goals can seem daunting, particularly in today’s environment where just getting a deposit together for a home can see you having to save more than $200,000, depending on where in the country you live. But remember, the more time you have, the more your money can grow. That means, if you start sooner, you can dream bigger!
Seek advice – it will help!
Research shows that 75% of people believe their overall wellbeing is linked to their financial wellbeing*. That means there are a lot of emotions in play when you’re planning for your finances. A fresh set of eyes and ears can really help bring clarity and perspective. You can chat to our team in person, or access some incredibly handy online resources, like the Milford Digital Advice Tool.
Got a grand?
For a long time now, there’s been a perception that Investment Funds are only for older people with lots of money. But the world is changing! Today, if you’ve got $1,000, then you can join one of our Investment Funds managed by our expert team. You don’t need any knowledge or experience in the world of investing, and you can be up and running in a few minutes. So, what are you waiting for?