Curious about the stock market? Finance expert's simple guide to investing and making money like the experts - and the THREE things to know before you get started
- Financial adviser Canna Campbell shared her simple guide for investing
- The Sydney-based expert said you need to know three things before starting
- Shares are a long-term investment and the market is volatile so don't look at it
- Canna said you should always diversify so your eggs aren't all in one basket
- Here’s how to help people impacted by Covid-19
A leading financial expert whose passive income earns her thousands each year has shared her simple guide to investing in stocks like a professional - and the three things you always need to remember when you get started.
Canna Campbell, from Sydney, said despite the economy's grim outlook during the coronavirus pandemic, she has continued to 'save, hustle and work my backside off' over the past four weeks to make an extra $1,000 on top of her salary that she can now invest.
'Having worked every weekend for the past four weeks, I now have $1,000 packaged and ready to go,' Canna said in a recent YouTube video.
So what do you need to do to get started?
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A leading financial expert whose passive income earns her thousands each year has shared her simple guide to investing in stocks like a professional (Canna Campbell pictured)
While many are baffled by the stock market and think it's too confusing to get started, Canna said in fact it's 'easier than buying a pair of shoes'.
'It's an incredibly fast and easy process,' Canna said, adding that you just need to remember three things.
'The first thing to keep in mind is that shares are a long, long, long-term investment,' Canna advised.
'When I buy shares, I never intend on selling them, because what I am using that $1,000 for is to buy and build growing passive income streams through dividends in companies.'
Canna said the more dividends you have in different companies, the more passive income streams you will have, so there is no point in looking at the share market as a short-term thing.
Canna (pictured) said you need to remember three things before you get started and these include the fact that investing is a long-term project and not something to see as quick gain
Canna said you absolutely must diversify your investments to lower the risk (pictured: her ANZ trading platform) as this will give you more passive income
The second thing Canna wants you to take on board when you're getting started is the idea that the share market is 'incredibly volatile'.
'It bounces around like a yo yo and so you never know what it's going to do next,' she said.
'All you want to do is build a passive income stream, so what the share market is doing right now is completely irrelevant.'
If you can, Canna advises you switch off from your investments for a period once you have invested the cash - rather than looking at them obsessively every day.
Canna (pictured) said you need to remember that the stock market is volatile and will always be changing, so try not to pay too much attention to it
Finally, the financial adviser said you always need to remember that diversification is key.
'Never put all of your eggs in one basket,' Canna said.
'If you have $1,000 to invest, you would need to be very careful if you intended to go and put it all in one company, as you'd be far better off diversifying that money.'
If you are unsure of where to start and have never invested before, Canna said listed investment companies can be a great way to get a foot in the market.
When you invest in a listed investment company, your cash is immediately diversified for you and all of the hard work is out-sourced.
Canna advises doing your research and finding out which trading platform is the best for you; she likes the ANZ platform (pictured)
Once you've taken all of this on board, Canna said you're nearly ready to begin.
'Make sure you have an online share trading account open before you start,' she said.
Canna likes the ANZ platform, but said you can go with any of the big banks like Comm Sec or a discount option like Self Wealth or Bell Direct Gold.
'Do your research and work out which one is the best for you and your goals,' Canna said.
'Once you've got your account setup, transfer that money you want to use for the shares and then you can get started.'
Canna (pictured) said her parcels of $1,000 make her at least an extra $8,500 per annum in passive income
As an example, Canna said she wanted to buy $1,000 worth of shares in Westpac Banking Corporation (WBC).
'Remember this is an example and matches my goals and risk profile, so don't just copy me,' she said.
To buy, Canna simply clicked on the 'Trade' button on the ANZ shares platform and then 'Buy'.
'I then enter the stock code, which is WBC, and I can see that $1,000 at the current share price is 62 units in WBC.'
Enter in the number of units, enter your trading pin and you should receive an email within minutes to say your request has been approved, before you later get a letter in the mail confirming the number of shares you have in your portfolio.
'If you're buying shares in a company where you've never bought from before, then you will receive some paperwork as a letter that will come as a form with a pre-addressed, pre-stamped envelope,' Canna said.
On this form, you will be asked for your tax file number, bank details and dividend instructions.
Dividend instructions typically fall into three different options, Canna said.
The first option is to get the dividends paid into your cash account, while the second option is a partial dividend re-investment (for example, 70 per cent is re-invested back into the company and 30 per cent goes into your cash account).
'The third option is my personal favourite and it's the choice option,' Canna said.
'You decide which re-investment plan you want and if the company have an active re-investment plan in place, you can tick this option, which means you won't be paid in cash, but rather it will be used to buy more shares.'
Canna said this is good because it doesn't give you an opportunity to spend the money, but instead means you continue to build your passive income.
To find out more about Canna Campbell, you can visit her YouTube channel here.
