You don’t need a lot of money to start investing, especially if you start with stocks.

The minimum parcel of shares you can buy in a company listed on the Australian Securities Exchange (ASX) is typically $500, so that could be considered the minimum amount to start investing in Australia.

Once you have got your foot in the door with a $500 investment, you can keep buying more shares as you save money and build your portfolio from there.

Before you start though, it is important to be aware that getting into the market this way, may not be very financially efficient. The reason is that when you buy shares you have to pay a fee to a stockbroker, called “brokerage”.

A typical brokerage fee for up to $10,000 worth of shares is $30 per transaction. So, if you buy your shares in $500 parcels, you are paying 6% brokerage each time you buy and your shares need to earn that much just to break even.

It is far more efficient to buy in larger parcels, e.g. If you buy $2000 at a time, your brokerage falls to only 1.5%, and for $10,000 a paltry .03%.

However, this means you need to save a bit more each time before buying.

So why would I start small?

In a word, education. You might do better to think of your first small investments as an education expense. You can learn about the process of investing, set up accounts to fund investing and receive distributions, see how to access information for tax purposes, and consider the most tax-efficient investment approaches before you have too much money on the line. Then, when you do get some larger sums, you will have the expertise to handle them confidently.

What is your financial position?

If you’re not sure whether your finances will allow you to begin investing and sustain it for the long-run, consider these questions:

·        Are you regularly saving money?

·        Do you have some spare cash available that you don’t need to use soon?

·        Have you prepared a realistic budget to see how much you could invest in future?

·        Do you understand the fees involved, as well as the money you might lose?

·        Are your debts very small?

Other assets

The minimum amount of money you require to invest varies depending upon the type of asset you are seeking to buy.

Just as shares have the lowest minimum trade, property has one of the highest. The average price of a home in every capital city is between $500,000 and $1.2 million.

At the lower end, you have managed funds, which typically have a minimum investment of $5000.

This may sound like a lot, but some of these funds can give you access to asset classes that you may not be able to invest in directly. For instance, Residential Mortgage-Backed Securities (RMBS) are debt-based securities that are similar to bonds. They are secured by a pool of residential mortgages over Australian properties. When the property owners make their interest payments on these mortgages, they are passed through to the RMBS owners.

RMBS are usually available only to institutional investors but through Firstmac’s High Livez fund, investors can get access to RMBS, for a minimum investment of $5000, and $1000 for subsequent top-ups.

To find out more about High Livez, see here.


As we touched on above with shares, the amount you should have in order to start investing doesn’t just need to cover the investment itself, it also has to cover transaction fees. Aside from shares, there are many other desirable asset classes such as direct property, corporate bonds, overseas shares etc. which have higher minimum parcels and may have higher fees.

Different types of investments have different costs, but all carry some sort of transaction fee or commission.

Some, such as property, also have substantial holding costs as the asset needs to be maintained. When you buy or sell residential property, you will also have to pay expenses like real estate agent commission, advertising, and stamp duty. Managed funds have management fees, although these are typically drawn from earnings so will not require you to put in any more money.

So there you have it. You don’t need a lot of money to start investing in shares, and for just a little more, you can even start to access other asset classes beyond equities. As with all investment decisions, we also recommend that you seek advice from an independent professional financial adviser for advice specific to own circumstances.