hey guys welcome back to the channel my
name is Brandon and today we're going to
be running through a step-by-step guide
as to how to get started investing here
in Australia because I know a lot of you
guys out there to follow this channel
basically just brand new to investing
and just looking for some sort of help
to just get yourself started so if
that's you this is the video for you
it'll definitely help you out now before
we get started I just wanted to let you
know that we have just launched the
profitable Facebook page and we're
putting up heaps of free investing
content over on that page so I'd
encourage you guys to go and like that
page but also like or join the
profitable investing community Facebook
group because there are heaps of
investors over there we're all
like-minded we ask questions we debate
topics over there in that group so if
you're looking to just ask a question or
talk to other investors around Australia
go and join that Facebook group that
will help you out heaps but to get
things started guys let's talk about
step number one to get started investing
here in Australia well this one is just
to get started investing anywhere around
the world step number one is you have to
take the time to define your strategy so
you have to ask yourself are you that
investor that wants to try and pick
stocks or are you really not interested
in that and you're really looking more
for a set and forget kind of approach
that work over a long period of time so
that's the first thing you've kind of
got to think about and for me I think
that it comes down to two strategies
you've got either the passive investing
strategy or the active investing
strategy now the passive investing
strategy is that more set-and-forget
style approach it's basically where you
find a market tracking investment and
you contribute to that portfolio
periodically and you keep following that
approach for a very long period of time
and the idea here is that if you follow
that strategy you're going to average
out to the general market return now
passive investing it definitely works
here in Australia it works in basically
all really well developed markets around
the world so here in Australia history
suggests that the average annual return
out of our stock market has been about
10% in all honesty that's a little bit
high when you compare that to other
major markets around the world so I
probably mmm I'd probably think more
along the lines of 7% per year but it
definitely works here in Australia and
in
all honesty it's the strategy that most
investors around Australia tend to
gravitate more towards so that's passive
investing than the other way that I
think you can go about it is active
investing now active investing just
means you select individual stocks to
invest in now the problem here is that a
lot of people think that active
investing is basically just like oh yeah
I like that business and I like that
business therefore I'm just going to
invest in those businesses because I
like them unfortunately this is
basically just gambling and people that
do this they actually don't really have
an active investing strategy set they
think they do but they really don't and
this opens them up to being very
influenced on their emotions right
they're they're much more likely to just
act on a whim based on what the stock
market is doing today or tomorrow or in
the next week and that's really not a
good investing strategy so that's our
first step right our first step is to
make sure we have a good strategy
defined we know what we're doing when we
our stock market investing so for
instance yes I am an active investor but
for me my active investing strategy that
I've defined is that I find businesses
that yes I like but I also have to
understand the business the business has
to have some sort of competitive
advantage the management team of that
company has to operate with skill and
integrity and lastly I only buy the
shares when they are undervalued or when
they're at a margin of safety share
price now the interesting thing when
we're talking about investing
specifically in Australia is that when I
was first learning how to go through
that active investing strategy I was
looking at companies here in Australia
but I actually didn't really find any
that I was interested in investing in
and a lot of that comes down to the
areas of business that I am interested
in right so when you if you're an active
investor in Australia the companies the
big companies that a lot of the times
you'll end up researching are things
like banks mining companies health care
companies supermarkets and so on and for
me they're just not very interesting
businesses so what actually found when I
was starting to invest in Australia
trying to implement that active
investing stock selection strategy is
actually found that why did that's the
thing I didn't find any companies also
interesting what I did find being kind
of a young guy that's interested in
technology and that sort of stuff I
found that actually the businesses that
are over in the US markets we're
thinking like Tesla or Apple or Facebook
or Disney any of those companies they
appealed to me much more so I'd actually
if you are someone that's a young person
and interested in getting started with
active investing I'd actually challenge
you to really think do I actually want
to start active investing here in
Australia because you might find that a
lot of these businesses are just not
particularly interesting for you you
might have a better time active
investing in a market like the Nasdaq
anyway let's keep moving our way through
the video the last thing I'll say here
is that if you are someone that wanted a
just a step-by-step guide as to how to
implement either the passive investing
strategy that I was just talking about
or my particular individual stock
selection strategy then check out the
links in the description I've made full
in-depth courses on both of those
investing strategies so if you are
someone that wants to learn more the
step by step process into those
investing strategies check out those
courses check out the links in the
description that'll take you over to
profit fool and you can learn more about
it there but anyway moving on now into
our second step to start investing here
in Australia once you've defined your
strategy you have to then go and open a
brokerage account now a brokerage
account is basically the access is you
are making an account that gives you
access to trade on the exchange you make
an account okay and then that is what
then enables you to be able to buy and
sell shares now the interesting thing is
the stock broker they don't do this for
free okay they don't process your buy
orders and your sell orders for free so
they're going to charge you what's known
as a brokerage fee now in Australia
typically what you're going to find is
that a brokerage fee will cost you
anywhere between $10 and $30 for every
trade that you make with that be a buy
or a sell and that's obviously a lot of
people when you are starting out in with
your investing one of the key things you
want to find is a brokerage site that
has absolutely minimal brokerage fees
okay
but also is quite reliable and isn't a
scam obviously so the first thing that I
always tell people when they're looking
at opening a brokerage account here in
Australia is all four of the major banks
offers share trading services and what
you typically find is that with these
banks if you're already a customer with
that bank they're going to give you some
sort of deal or some sort of perk for
also doing your share trading with that
service so in Australia for major banks
their share trading services we've got
COMSEC there's NAB trade Westpac share
trading and answer'd share investing I
believe is what they called those share
trading platforms for the banks but of
course you don't have to do your share
trading through one of the banks there's
also other options through advertising
you've probably seen ones like eToro or
+500
in all honesty I haven't used their
platforms so I can't honestly comment on
this but from my experience running this
channel I haven't heard too many good
reviews out of those brokerage sites the
one that I use for trading if I'm
trading here in Australia I use CMC
stock broking and the other one that I
haven't personally used but I've heard
lots of really good reviews about is
self wealth which also I believe is the
cheapest brokerage cost platform in
Australia so overall there some of the
options you've got here investing in
Australia overall step two you have to
open a brokerage account to get access
to trading on the Australian exchange
which is called the ASX alright moving
on now into step number three the third
one of the most critical steps in
starting out in investing in here in
Australia or anywhere around the world
is just to chill out and just don't rush
because what you'll hear from the
financial services industry what you
hear on TV what you hear from people on
YouTube is that it's best if you get
into the stock market as soon as
possible and it can make you feel as
though you have to get in right away
okay but that's totally not the case the
reason that they say it's important to
get into the stock market sooner is
basically because as time goes on your
money compounds and
the compounding effect obviously with
your money the sooner that you start
that process the better it gets over
time however it's a much better strategy
just to wait on the sidelines and
continue to research your strategy and
learn about how the markets move and how
they work as opposed to just rushing in
immediately and making all sorts of
mistakes which could cost you a lot of
money okay because overall in the grand
scheme of things if you are a truly
long-term investor which I definitely
recommend you stick to long term focused
investing then it really won't matter
too much whether you start now next week
in one month or in six months from now
so don't feel the pressure is that you
need to get in the stock market is going
to be there for you whenever you're
ready to start and then step number four
our last step to get started in
investing here in Australia or around
the world is to always focus on the long
term there's a saying in the stock
market don't hold a stock for ten
minutes unless you'd be comfortable
holding it for ten years and it's so
true it is really important especially
when you first start out and you're kind
of setting your foundations you're
investing foundations not to get caught
up in the short-term movements of the
stock market right because overall in
this in the short-term nobody really
knows what's going to happen no people
try and guess and they just get it wrong
all the time all the time they get it
wrong right it is basically impossible
to predict where the stock market will
move in the short term okay so the stock
market here's a quote for you the stock
market is an incredibly unreliable
get-rich-quick scheme however it is an
extremely reliable get rich slow scheme
pretty much if you look at any
short-term snippet of any major stock
market around the world who knows it
might go up it might go down but if you
take those snippets okay and you just
start to scroll out further and further
and further what you'll find if you are
looking at a well developed market okay
what you'll find is the further you
scroll out the more likely it is that
over time the stock market has moved up
I mean look at it this way I'm going to
show you two charts one chart is
ten years worth of compounding and the
next chart is 40 years worth of
compounding right and for this chart
what we've imagined is we've grabbed
$10,000 plumped it across the market and
then we're getting the average market
return of 7% per annum now look at this
if you just look at the compounding
effect over ten years your $10,000 will
have turned itself into $20,000 however
if you extend that time frame right if
we look over 40 years your $10,000 at
that average market return of 7% has
turned into a hundred and fifty thousand
dollars the longer you leave it the
better it gets and this is because
compounding is exponential it's not
linear anyway guys they are my four key
steps to getting started investing here
in Australia step number one is define
your strategy step number two you've got
to open that brokerage account step
number three make sure you're not
rushing take the time to do your
research
step four make sure you're focused on
long term investing because that is the
reliable way of making money in the
stock market anyway guys I hope you
enjoyed this video as I said during the
video if you're interested in looking at
a step-by-step process of how I go
through my investing strategies passive
investing or active investing links in
the description profit fall head over
there and check out those courses if you
like make sure you join that profitable
investing community over in Facebook
it's completely free to do so there's
heaps of content going up there as well
so if you want go over to that group ask
a question I'll respond other
like-minded investors will respond as
well so anyway guys if you enjoyed this
video make sure you leave a like on it
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do so of course and that'll do it for
today's video guys thanks for watching
I'll see you guys next time
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