Where to invest your money, at any stage of life

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One of the most variable and vague topics in the (already quite variable and vague) personal finance world has to be investing. The concept itself is simple: you put your money into assets with the hope they’ll grow in value over time. But when it comes to what assets, well, the options feel infinite.

You could invest in individual shares or bundle them together into an ETF. But maybe you should try to invest in property instead, and potentially your superannuation too. Does that all feel too risky? Just settle for gold or a nice high-interest bank account, then. And what’s all this buzz about cryptocurrency?

This isn’t even really scratching the surface of all the decisions and sub-decisions someone has to make when they start investing, so if anyone ever tells you it’s easy, they’re a big liar.

What’s the problem?

The ASX’s most recent Australian Investor Study in 2023 found that just 50 per cent of Australian adults hold investments outside their super, with 40 per cent having never invested and 6 per cent saying they intended to start investing.

Given just how good our superannuation system is, this isn’t unexpected, but I suspect it could be higher if the whole space didn’t confound the everyday person.

What you can do about it

So if you’ve been thinking of putting your money to work for you, here are some suggestions on where to invest at any stage of life:

• Gen Z: If you’re aged around 20-30, you’re likely either still at uni or have only been in the workplace for a handful of years. Your superannuation balance will be relatively low, and you probably won’t have a huge amount of spare cash lying around to invest. So if your goal is to start building a portfolio outside of super, micro-investing platforms such as Raiz, Sharesies or Pearler can be a good place to start, allowing you to put a little bit aside each paycheck to start slowly building up your balance. If you have a more significant sum to invest, then choosing some broad-based exchange-traded funds (ETFs), such as the top 200 Australian or international shares, can be a good place to start. However, that all being said, getting out and seeing the world can be truly priceless, so don’t feel bad spending your savings on a holiday instead – I certainly just did!
• Millennials: For those in the 30-40ish year old bracket, this is the stage of life where it becomes (slightly) realistic to start thinking about owning property. Money you have earmarked for investment could start being pooled towards a deposit for your first home – don’t forget about things such as the First Home Super Saver Scheme, which allows you to save for your deposit via your super fund, saving you money on tax. It’s also a great time to start setting up a salary sacrifice into your superannuation. Even a small amount – say $100 a fortnight – can leave you tens of thousands of dollars better off by the time you retire.
• Gen X: If you’re between the ages of 45 and 60, you’ve probably started to think seriously about what your retirement might look like, and possibly also raising a family. Dawn Thomas, senior wealth adviser at The Wealth Designers, suggests those two areas should be your focus at this stage of life. “Putting money into super is a great way to boost your retirement pot of money in a tax-effective manner,” she says. For younger Gen Xers, make sure your investment option reflects your investment time frame, Thomas says, suggesting you ensure your super option is skewed more towards growth assets, which are ideal for investment periods of 10 years or more. “You may also want to kick-start your kids’ investing futures and similarly can use education bonds or investment bonds as a controlled and tax-effective way to help grow wealth for your kids,” Thomas says.
• Boomers: For those over the age of 60, it’s all about retirement, as you’ll either already have retired or be pretty close to doing so. For those in the latter camp, Thomas says you should be taking advantage of your last working years by shovelling money into your super fund where you can. “Putting money into super as a concessional contribution can give you a tax deduction, or if your income is low, you can make a non-concessional contribution,” she says. Your fund allocations should also be changed to be slightly more on the conservative side, though don’t go too far – average life expectancy is now over 80 years old, so you want your super to last a good long while. It’s also a good time to hark back to your 20s and start spending your money on yourself by taking some trips locally and abroad – you’ve earnt it! Thomas’ final suggestion is to put some money aside for your children and grandchildren. “With the cost of living, you may want to help your kids out now instead of waiting until they get your estate,” she says. “If you’re on the age pension, you can gift $10,000 per annum (but no more than $30,000 in 5 years) without negatively impacting Centrelink payments.”

Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.