Smart Aussie InvestorBuild Your First $5k Portfolio
This guide keeps things straightforward: broad funds, low costs, and habits you can stick with.
Before you start
- Safety net first: Aim for a small cash buffer for surprises.
- Time horizon: Money you won’t need for at least 3–5 years works best.
- Costs matter: Prefer low ongoing fees (MER) and fair brokerage costs.
A simple example mix
Purpose: diversification with just a couple of funds.
- 70% broad Australian shares ETF (e.g. VAS/IOZ) simple, local market coverage.
- 20% global shares ex-AU ETF (e.g. VGS/IWLD) big international companies.
- 10% cash or bond ETF (e.g. VAF/IAA cash alt) a small stability anchor.
Note: These are examples, not recommendations. Pick equivalents you’re comfortable with.
How to put $5,000 to work
- Choose a broker you find easy to use and check the fees.
- Search the ETF codes and read the fund pages (what it holds, fees, distribution schedule).
- Place limit orders (lets you set a max buy price) and avoid chasing a moving price.
- After buying, turn on distribution reinvestment (DRP) if you want hands-off compounding.
Ways to invest (quick note)
- Lump sum: invest the full $5,000 at once. Simple; maximises time in market, but can feel chunky.
- DCA (Dollar-Cost Averaging): split the $5,000 into stages (e.g., monthly over 3–6 months) to smooth the ride.
Keeping it on track
- Top-ups beat tinkering: A steady monthly/quarterly add often beats constant changes.
- Rebalance occasionally: If one slice gets much larger than planned, nudge it back.
- Expect ups and downs: Headlines change. Your plan doesn’t have to.
Costs to know (in plain English)
- MER: A small yearly fee built into the fund (lower is usually better).
- Brokerage: Fee each time you buy/sell.
- Bid/ask spread: The small gap between buy and sell prices it’s a hidden cost.