Investing in shares is one effective way to earn good money. If you haven’t set up a financial goal yet, then don’t waste any more time and start thinking of your future. As the year 2016 starts, it is best to take the opportunity and set financial goals. People invest to earn money. If you have the means to engage in this type of investment, go for it. Why people are into it? Setting up a savings account in the bank is also a good way to earn profits but most banks apply very low interest rates. Some prefer time deposits, and allow their money to sit in the bank for years. This is a good option too but it’s not going to earn much if the rate is low. This is a safe way to earn profits. If you want bigger income, investing in shares is more ideal.

Investing in Shares

Investing in shares involves buying shares to generate income from the share price growth or earn dividends or a combination of both. Bear in mind that this is not only a short term goal but a possibility of 5 years or more. But where do you invest?

There are a lot of things to consider, the amount of investment, where you invest and the stability of the stock market. The movement or any drastic change in the stock market can cause a great impact on your investment. You should be careful where you put your money. If you have $10,000 where are you going to put it? Don’t invest the whole thing in one area. Investing in shares requires allocation and using the percentage of where you plan to use it. Provided below is a sample portfolio. Here’s how you can become a seasoned investor:

  1. 20% in Vanguard Australian Shares Index (ETF) – Mostly represented by major banks, Telcos, Miners and Retailers, if you do believe in these companies, you can put higher than 20%.
  2. 30% in Vanguard MSCI Index International Shares ETF – Some of the best investment companies can be found outside of Australia.
  3. 20% in Wesfarmers shares – ASX:WES owns a lot of the stores that are actually household names to us like – Kmart, Coles and Target. You will even shop with joy after you invest in them because you will own a portion of these shops.
  4. 20% in Telstra – Since more than half of the Australian population uses Telstra and their famous payouts, there is no reason why you shouldn’t take the chance to invest.
  5. 10% (your choice) – this is the smallest part of the portfolio, this is your chance to choose yourself. When investing in shares, pick an established company that has the potential to become bigger in the future. It must carry a product or service that you usually utilise or something you are excited to own.