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In this increasingly expensive world, a little disposable income is always welcome. A quick doomscroll reveals why: housing prices are steadily rising, the cost of living is at an all-time high and those US tariffs are setting off alarm bells everywhere.
With long term dreams like home ownership and a comfortable retirement at stake, it’s easy to see why investment seems so attractive. Whatever your reasons for learning how to invest though, the first place to start is with the experienced advice of the experts – especially if you’re just beginning your investment journey.
To help us navigate this complex financial world and figure out how to start investing, we sat down with Deakin University’s Senior Lecturer in Financial Planning, Marc Olynyk.
Before we think about how to invest, let’s first get a quick refresher on what investment actually is. It’s important to get the fundamentals of investing right if you’re going to be successful in creating long-term wealth.
‘Investing involves the purchase of financial assets, such as shares, property and bonds for the purposes of generating wealth and income flows over the long term,’ Olynyk says.
‘Understanding risk and its relationship with the potential to generate returns over the long term is an important feature of investing,’ he explains.
Olynyk also wants us to be clear that investing is different from saving (which is designed primarily to achieve shrt-term goals, rather than the long-term outlook of investing) and speculating, which involves ‘Taking bets on short-term price movements to chase potentially large but uncertain returns’.
Property, shares, bonds, futures, cryptocurrency – the sheer number of ways to invest money in Australia is enough to give anyone analysis paralysis.
To help you decide how to manage your money, Olynyk says it’s important to tick off some key investment principles:
With that in mind, let’s take a closer look at some different types of investments.
Property prices and returns in Australia have performed very strongly over the past few years and experience, particularly in the Australian housing market, indicates that an investment into the housing market is generally a reliable vehicle for building long-term wealth.
If property investment is a path you’re interested in exploring, how can you actually invest in property in Australia?
There are two different methods to think about, depending on your budget: direct property investing and indirect property investing.
‘Direct investing refers to the acquisition of physical property which might include such things as purchasing residential property, a shop or factory,’ says Olynyk. ‘Indirect property investing involves buying an interest in a property fund or acquiring shares in companies listed on the stock exchange that invest into different forms of real estate.’
While direct investing has historically provided excellent returns over the long-term it does require a much higher initial outlay – often a 20% deposit on the value of the property – and, usually, a bank loan to fund the remainder. However, you will have the benefit of owning and controlling the property outright whereas with indirect investments into property, the investor has no control over the selection and management of the properties. Indirect investment generally requires a much smaller outlay of funds, often as low as an investment of $5,000, and provides greater diversification across a range of different properties held within the fund.
Stocks and shares are a type of investment that gives you a small percentage of the ownership of a corporation and are a common way to invest and create wealth. Australians have had a long-term love affair with shares over many years, and many young investors are now turning towards shares in order to build wealth given the soaring prices of property. Similarly to property investment, there are two ways to start investing in stocks – direct and indirect.
‘Direct share ownership involves the investor acquiring ownership of shares in individual corporations,’ says Olynyk. ‘Indirect share investing involves the investor owning units in a managed fund or other investment vehicle such as exchange-traded funds (ETFs) that pools funds from many different investors in order to buy shares in a range of several companies.’
So, what is an ETF? ‘An ETF is a listed managed fund that pools investor funds to invest into a range of different investments such as shares, property, bonds and infrastructure,’ Olynyk says. ‘The barrier to entry is generally low (both in terms of initial investment and brokerage costs), diversification is built-in and there are nearly 400 ETFs for Australian investors, making this a potentially attractive option for early-stage investors.
Particularly with direct ownership share investing, it’s important to be educated, well-researched and, in many cases, backed up by professional guidance. Diversification is also a vital strategy in share investment, which is why Olynyk recommends beginners start off investing into the share market through an indirect share fund, like ETFs, that are relatively low cost, provide good diversification and you can start with a small cash outlay.
The buzzword in investment in the last few years has been cryptocurrency, but are ‘cryptos’ like bitcoin good investment options for new investors?
According to Olynyk, it really depends.
‘They are complex products that come with significant risk and volatility,’ he says. ‘Any decision to invest into cryptocurrency should firstly consider a range of factors as to their appropriateness for investing into including personal goals and needs, the degree of risk you are willing to take and your understanding of the product.’
Olynyk says that cryptocurrencies like bitcoin can be solid investments as part of a diversified portfolio, but that research and education is vital to ensure the investment is right for you and your investment strategy in meeting your financial goals.
If you want to know how to invest as a beginner, there are plenty of options to suit most investment goals.
As Olynyk says, there’s no ‘right’ approach for everyone, but he does recommend defining some key points for yourself before investment, including your:
Some investment types (like direct property investment) require a significant outlay – often tens of thousands of dollars. However, if you’re a beginner, there are much more affordable options to get your investment portfoliostarted.
So, how much money do we need to start investing, then? According to Olynyk, it could be as little as a few hundred dollars.
‘Many online brokers allow a minimum purchase of shares with only $500,’ says Olynyk. ‘Vanguard Investments, for example, allows investors to acquire a wide range of diversified managed funds and ETF’s from as little as $200.’
‘The sooner you invest and the longer you invest for, the sooner you start to make money and real wealth,’ says Olynyk. He points to investor Warren Buffet (whose net worth in 2025 is estimated at $154 billion USD) as evidence of the power of compound returns and patient investing over time.
‘The benefit of compounding means that as soon as you start to make a return on your investment, future returns will be based on the original investment plus returns generated to date,’ he says. ‘Investment returns make up most of the wealth creation. Especially for younger investors, compounding means that every dollar saved will have a huge impact on future investment outcomes.’
This means that, while making money from investments is possible in the short term, the real key to effective investment is to plan well, learn how to invest sooner rather than later and wait for the passage of time to (hopefully) bring those compound returns.
Senior Lecturer,
Faculty of Business and Law,
Deakin University
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