How To Make Money Investing In New Zealand For Beginners

Key Concepts

• Broker: Platform (app or website) for buying and selling investments.
• Fees: Costs associated with investing, including flat fees and percentage-based fees.
• US Stocks: Investing in companies listed on US stock exchanges.
• Dollar-Cost Averaging (DCA): Investing a fixed amount regularly, regardless of market fluctuations.
• Dividend-Paying ETFs: Exchange-Traded Funds that distribute a portion of their earnings as dividends.
• SCHD: An example of a dividend-paying ETF with a focus on high-dividend-yielding US companies.
• Dividend Yield: The percentage of a stock's price that is paid out as dividends annually.
• Annualized Return: The average annual growth rate of an investment over a specified period.

Choosing a Broker

• A broker is the platform where you buy and sell investments.
• Examples of brokers for New Zealand investors include Mumu, Sharesies, Hatch, and Stake.
• ASB charges a flat $90 fee for investing in US shares, which can be expensive for smaller investments.
• Hatch, Stake, and Mumu offer access to US companies like Apple, Amazon, and Google.
• Mumu is highlighted as a user-friendly option for beginners.

Geography: Local vs. International Investments

• New Zealand companies can offer stability and dividends.
• Example: Fisher and Paykel Healthcare grew by about 20% over 5 years.
• US market offers potential for higher growth and global exposure.
• Example: Nvidia grew by around 1,393% in the same 5-year period.
• Investing in US stocks provides access to global powerhouses like Google, Nvidia, Microsoft, and Amazon.
• A mix of local and international investments can be tailored to individual goals.

Understanding Fees

• Fees can significantly impact investment returns.
• Flat fees can be expensive for small trades.
• Percentage-based fees can add up over time.
• Mumu offers new clients commission-free trading for US stocks for 30 days.

How to Buy Stocks on Mumu

• Search for the company you want to invest in (e.g., Apple).
• View company information, including current price, price changes, P/E ratio, and dividends.
• Select the "buy" option.
• Choose a "market order" to buy shares at the current market price.
• Enter the dollar amount you want to invest.
• Shares typically appear in your account within one to two business days.
• Be aware of the time difference between the US stock market and New Zealand.

Investment Strategies

• Dollar-Cost Averaging (DCA):
  • Invest a fixed amount regularly (weekly, fortnightly, or monthly).
  • Reduces the risk of trying to time the market.
  • Smooths out the ups and downs of the market.
• Dividend Investing:
  • Consider dividend-paying ETFs like SCHD.
  • SCHD pays an average dividend yield of about 4% and has delivered an average annualized return of about 12%.
  • To generate $100 per day in dividends from SCHD, you would need a portfolio worth approximately $920,000.
  • Investing about $145 per week for 25 years could potentially reach that $920,000 portfolio.

Mumu Platform Features

• Mumu offers various features to help investors make money and boost returns.
• The video recommends watching another video for a full guide on the Mumu platform.
• Mumu is offering generous welcome bonuses for new users who sign up using the link in the description box and meet the requirements, including up to 12 random free stocks and 30 days of zero commission trading.

Conclusion

The video provides a beginner-friendly guide to investing for everyday Kiwis, emphasizing the importance of choosing the right broker, understanding fees, diversifying investments, and adopting long-term strategies like dollar-cost averaging and dividend investing. It highlights Mumu as a potentially accessible platform with attractive features and welcome bonuses. The key takeaway is that consistent, long-term investing, even with small amounts, can lead to significant financial gains over time.