Most of us associate buying shares and investing money with business tycoons or the wealthy. But a group of Kiwi millennials has set out to smash those misconceptions by setting up an online business, Sharesies, that makes investing in shares simple for everyone.
The premise of Sharesies is: sign up for $30 then invest as little as $5 from a selection of funds, then watch your funds' progress.
There are 11 funds to choose from: two are socially responsible Pathfinder funds; the other nine are what are known as exchange traded funds, where you invest in a group of companies (the top 50 companies in New Zealand, for example). Every fund has a risk classification so you can choose a fund that aligns with your risk comfort levels.
Since Sharesies was launched in October 2016 it has amassed more than 11,000 customers and 80 per cent are under 40 years old. Just under $10 million has been invested through the platform so far.
Its founders - a group of seven millennials who come from a range of backgrounds including banking and finance - spent six months undergoing market research beforehand to gain insights into Kiwis' views on money and investing. What they learned is:
- Most people don't know where to start when it comes to investing and find the thought of researching and selecting investment funds daunting.
- There is a perception that you need a lot of money to get started.
- Most New Zealanders choose to invest in property - yet home ownership has become unattainable for a growing number of Kiwis.
- The most surprising discovery was that although every person interviewed had KiwiSaver, not one of them considered themselves an investor.
"So it showed there was this real lack of understanding of the investment world, even though people already had money tied up in investments," says co-founder, Sonya Williams.
"Investing is not just for the rich, and you don't necessarily have to make big sacrifices to benefit from investment either. You can invest small amounts of money and still have your smashed avocado on toast! The important thing is just to get started. You learn a lot just by doing."
Sonya suggests picking an amount you can afford and committing to investing on a regular basis, "one payday at a time. There are lots of great tools online that can help you choose the types of investments that might be right for you."
Find out what type of investor you are here.
"What customers find is that as they see their funds go up and down they get used to it and understand the rhythms. To earn more you do need to risk more, however over the long term even though things go up and down they generally track positively."
Over time Sonya also sees customers asking more complex questions, as their understanding about investment grows.
The idea for the company was sparked by an epiphany Sonya had. "One night my partner and I were trying to decide whether we should get takeaways for dinner and I thought, 'Even if I don't get takeaways I'll just spend that $50 on something else in a few days' time... What if I just invested that money? Quickly, online, small amounts. That's the genesis of it."
Co-founder Leighton Roberts has been part of an investment club with family and friends since he was 17, and sharing his insights added momentum to Sonya's idea.
Sharesies' co-founders see themselves as able to offer a solution to everyday people who want to get ahead financially, but don't know where to start and don't necessarily have a lot of money.
"When you think about that first home milestone it's definitely getting more and more out of reach for New Zealanders. If you're leaving university and the idea of saving for your first home is too far away or daunting, you can use this to bridge a gap... If you have a home already you can use Sharesies as a way of diversifying your investment," says Sonya.
"We're encouraging people to invest the way they want to and the way they feel is right for them."