I have a confession to make.

Until recently, I was so overwhelmed by the idea of investing in the share market that I just… didn't. I didn't know where to start. I didn't know what the acronyms meant. And frankly, every time I tried to Google my way to understanding it, I ended up more lost than when I started.

That all changed one night late last year, when 10 of my girlfriends gathered for an investing 101 evening. We all downloaded an investing app and each put a tiny amount into shares (spoiler: I invested in a media company!) Over the weeks that followed, we watched our tiny portfolios go up and down, and slowly, the mystery started to dissolve.

It was an incredibly valuable lesson, and one I was lucky enough to be taught first-hand. So today, I'm sharing the love. These are the questions I wish someone had answered for me before that night.

Let's get into it!

A note on this edition: CommSec is the sponsor of today’s newsletter, and also provided research and insights for today's newsletter but had no editorial input on what we've written here.

_{^{The information has been prepared without taking into account your objectives, financial situation or needs. For this reason, any individual should, before acting on this information, consider the appropriateness of the information, having regard to their objectives, financial situation or needs, and, if necessary, seek appropriate professional advice.}}

Do you need heaps of money to open an account?

Nope. There are some investing platforms that let you begin with just $50.

Do I have to work in finance to invest?

Absolutely not! Numbers are not my strong suit (just watch me still count on my fingers), but nowadays, investing can be for anyone. 

What’s the difference between investing and saving?

Saving is putting money aside for the short to long term. It sits in a bank account, earns a modest interest rate, and is there when you need it. Investing in the share market is putting your money to work, with the hope that it will grow over a longer period of time.

Where do you invest?

So, it turns out that you can’t just waltz up to the Australian Securities Exchange (the ASX, our national stock exchange) and buy shares directly. Think of it like buying an apartment. You don't negotiate directly with the seller, you go through a real estate agent who facilitates the transaction. Investing platforms are the real estate agents of the share market.

Some platforms are built for beginners and keep things simple. For example by focusing on ETFs, or Exchange Traded Funds - a way to invest in many companies at once. Others are designed for people who want to trade frequently or access international markets. 

What does your first trade actually look like?

First, let’s define a trade: A trade is simply the act of buying or selling an investment. You place a "buy order" through your platform, that's a trade. When you eventually sell, that's also a trade.

So when you’re ready to do it yourself, you search for the company or fund you want to invest in, enter how much you want to put in, and hit confirm. That's genuinely it. Your investment then sits in your "portfolio", a summary of everything you own, and you can watch it move up and down from there.

How do you choose which shares to buy? 

There’s no rule book on this! A good place to start is looking at an industry you are familiar with. For example, I looked at media companies because I know a lot about the media and therefore could understand why prices were going up and down. If there’s nothing calling your name, do some research to understand where there might be opportunities for a company to grow in the future.

How do I actually make money?

There are two main ways.

1) Growth. You buy something for one price and later sell it for more. That difference is your gain. But it's not a guarantee. Investments have good days and bad days, and the real returns tend to come to those who are patient enough to wait out the stormy ones.

2) Income. Some investments pay you money along the way, called dividends. Think of it as your investment quietly producing something while you hold it. Not all investments pay dividends though, it depends on the individual company or ETF.

Er, what’s an ETF?

Look, I could explain that in the written word, but that would be no fun. Instead, let my colleague Billi explain it simply via salad ingredients here. 

How often do I need to check my investment?

This one’s completely up to you. However, if you're investing for the long-term, obsessively checking your portfolio every day is more likely to stress you out than help you. Share prices move constantly, and short-term dips are completely normal. This game’s all about patience!

Start investing with just $50

Getting started with investing doesn’t have to be complicated…or expensive. With CommSec Pocket, you can start building your portfolio with $50!

Browse, trade and manage ETFs and shares listed on the ASX, all directly in the CommBank app. Choose themed ETFs that match your interests, track your investments alongside your banking, and get access to tools and education to help you grow.

^{Consider the T&Cs and fees and charges at commsec.com.au and the PDS for each ETF prior to making an investment decision. Trading and investing involves risk, including potential loss of your investment. The value of your investment may go down as well as up.}