Ditch TikTok, save your super: Experts’ best advice for new investors

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Not gambling on quick wins, expecting to replicate the success of others or following the advice of “finfluencers” would be a good place to start for young investors, say some of Australia’s most experienced finance professionals.

Reflecting on what advice he’d give his younger self to get a leg up in the investing game, Jonathan Philpot, wealth management partner at HLB Mann Judd, says he was consumed with the idea of making immediate investment gains. He would advise those starting out to be patient.

Nabtrade’s Gemma Dale says it is much easier to invest now than when she was starting out, but there is a lot more “noise” about how to invest.

Philpot bought into the privatisations of government-owned businesses in the 1990s, including Tabcorp, which was privatised by the Victorian government in 1994, and Telstra. The Australian government sold the first tranche of the telco’s shares to the public in 1997.

After doing well from the privatisations, Philpot was encouraged to buy shares in other companies making their debuts on what is now known as the Australian Securities Exchange, only to lose money.

He also started to trade “options”, where investors speculate on the future direction of a sharemarket or individual stocks or currency exchange rates, among other markets. “I was virtually gambling,” Philpot says.

“I was a good saver, but I was so focused on high investment returns and was taking far too much investment risk … and taking stupid bets,” he says. He also hopped aboard the 1990s tech boom, only to lose money in the “tech wreck” of the early 2000s.

‘The challenge is differentiating an expert from someone who has had a great deal of success by being in the right place at the right time.’

“I think a lot of young people are like my younger self in trying to make money quickly,” Philpot says.

He reckons anyone starting out now should look at “index” investments, like exchange-traded funds (ETFs), where the money is spread around rather than concentrated in a particular stock or sector.

Jonathan Philpot, wealth management partner at HLB Mann Judd, says he would tell his younger self not to be so consumed with the idea of making immediate investment gains.Credit: Jessica Hromas

Gemma Dale, director of SMSF and investor behaviour at Nabtrade, says one of the greatest challenges is deciding which advice to listen to and whose lead to follow.

For example, her father had done well from investing in bank shares. “I bought some bank shares, and if had held on to them, they would be worth less than I paid for them,” Dale says.

“The real challenge is differentiating an expert from someone who has had a great deal of success by being in the right place at the right time,” she says.

It is easier to invest now than it was when she was starting out, provided you can switch off the “noise”, with all sorts of experts giving financial advice online. “You can just invest in an ETF and then buy some more when you have got more money,” Dale says.

“You may not get the same thrill that you may get if you buy cryptocurrency or whatever it is that your friends are talking about,” but ETFs can be effective over the longer term, Dale says.

Amanda Thompson, financial adviser, author, and founder of Endurance Financial, says that getting yourself financially literate at an early age is important.

Financial adviser Amanda Thompson says getting yourself financially literate at an early age is important.

“In this day and age, when everything is about personal development, money is still not mentioned. I would tell my younger self to approach finances just like making a commitment to sport,” says Thompson, who trains and competes in endurance sports.

However, you have to set your personal goals before you can set your financial goals, she says.

“I advise my younger self to be very aware of who you are and what your values are, and that your money goals should be aligned with your personal values”, Thompson says, warning the rise of influencers on Instagram and TikTok can make it harder to stay true to your own goals.

Helen Baker, a financial planner, author and founder of On Your Own Feet, says she wished she had known more about superannuation.

She spent an extended period overseas and withdrew some of her super to help pay for her travels. In those days, it was possible to withdraw super for a variety of reasons before access was tightened.

Baker wishes she had contributed more to her super rather than having to play catch-up later on.

• 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.

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