If you want to start investing in ASX shares or ETFs in Australia today, the good news is this: you do not need to know everything before you begin.
You do not need the perfect portfolio. You do not need to pick the perfect ETF. And you definitely do not need to wait until you feel completely ready.
I find most people delay investing because they think it is something you study first and do later. I think that is backwards. Investing is an apprenticeship, not a degree. You learn by doing. You get better by taking action, reflecting, and building confidence over time.
That is especially true if you are starting with a small amount. Whether it is $10, $100, $500, $1,000 or a little more, the real goal is not to build a flawless portfolio on day one. The goal is to get moving.
Here are five simple steps to invest in ASX shares or ETFs today.
Step 1: Know what you are investing for
Before you buy anything, get clear on why you are investing. I know this sounds boring but hang with me.
Are you building long-term wealth?
Investing for retirement?
Putting money aside for a child?
Or simply trying to beat inflation over time?
Your goal matters because it shapes everything else. If you are going to need the money in the next year or two, shares may not be the right place for all of it. The sharemarket goes up over time, but it does not go up in a straight line. Some years are fantastic. Some years are painful. That is normal. I estimate (using 100+ years of data from multiple stock markets) that one-in-five years will be negative – often pretty bad.
If your money has a long runway, you can let time do the heavy lifting and ‘balance out’ those bad years. If your time frame is short (under 3 years), volatility feels far more dangerous.
Good investing starts with matching the right asset to the right goal.
Step 2: Choose a broker or platform you actually understand
Once you know why you are investing, the next step is choosing how you will invest.
In Australia, there are plenty of brokerage platforms and investing apps. Some are built for regular share investing. Some are built for ETFs. Some are designed to make micro-investing easy. Many do a bit of everything. That is all fine, but the key is to understand who you are dealing with.
That means checking the broker or platform properly:
- Understand who operates it
- What licence sits behind it (use asic.gov.au‘s “professional registers” search function)
- What fees you are paying, and
- How your investments are held.
If you cannot explain how the platform works in one or two sentences or why it’s good for your style of investing, slow down and do more homework.
This does not need to become complicated. You are simply making sure the platform is legitimate, appropriately structured and suitable for what you want to do. It’s often free to open and close accounts.
The mistake many beginners make is focusing on the fees of the app (e.g. “zero brokerage” or “no fees under $1,000 in ETFs”, etc.) when really, they’re going to skewer you with really harmful financial products or try to convince you that “you could be the next Warren Buffett if you use our AI transformer hypergrowth alpha trading platform”.
Step 3: Learn the difference between a HIN and a custodial model
This is one of the most important things a beginner can learn in Australia because it affects your legal ownership status and fees.
When you buy ASX shares or ETFs, your investments will usually be held in one of two ways: under your own HIN, or through a custodial arrangement.
A HIN, or Holder Identification Number, means your investments are linked directly to you through the stock market’s settlement system – your shares/ETFs are legally tied to your name at stock exchange. A custodial model means a platform or custodian holds the shares/ETFs on your behalf.
Neither is automatically better in every situation. But they are different, and you should understand the difference before investing.
A lot of people open accounts without ever knowing how their investments are held. I think that is a mistake. HIN models might sound like they have an extra layer of safety (they do) but they cost more (e.g. $4-10 brokerage fees). But custodial models are most common in the world – including inside Super or ETFs themselves.
If you are putting your hard-earned money to work, you should understand the basic plumbing. It is part of becoming a confident investor.
Step 4: Start simple and start small
Here is where people get stuck. They think their first investment has to be brilliant.
It doesn’t. Charlie Munger told us “it is easier to avoid stupidity than it is to seek brilliance”.
Most people are better off keeping their first few investments very simple – and small.
I think a broad Australian or US shares ETF (like VAS, STW, A200, NDQ or IVV) or a diversified ETF (VDHG, DHHF, etc.) can be a sensible place to start. So can a regular investing plan that puts small amounts into the market over time – the best platforms now automate it for you.
Small investments are powerful because they lower the emotional pressure and have proven to be highly effective for good returns, when measured across decades of returns. If you invest a modest amount, you are less likely to obsess over every market movement. You are also more likely to stick with the process.
That matters because confidence does not come from reading ten more articles like this. It comes from seeing how investing works in real life. You buy. The market moves. You feel uncomfortable. Then you realise that is normal. Over time, that discomfort fades and discipline takes its place.
That is why I tell beginners to “focus on progress, not perfection”.
Step 5: Expect pain… and keep going anyway
This is the step most people skip.
The stock market will fall at some point. Get used to it.
Your portfolio will have bad days, bad weeks and possibly a bad year or two. None of that means you are doing it wrong. It means you are investing.
Too many people enter the sharemarket expecting a smooth ride. Then the first correction comes along and they panic. But the reality is simple: randomness is the price of admission for long-term returns. If you want certainty, don’t invest.
But if you want the higher long-term return potential that shares and ETFs can offer, you have to accept that the journey will sometimes feel uncomfortable. That is not a flaw in the process. That is the process. It’s one of the reasons why you get better returns (other people aren’t prepared for the pain and run away).
I believe investing rewards optimism and patience. You do not need to predict every twist and turn. You need a sound approach and the willingness to stay the course. Someone once told me on The Australian Finance Podcast, the hardest part of investing is staying invested. I couldn’t agree more.
So if you are ready to start, keep it simple. Know your reason. Choose your platform carefully. Understand the holding structure. Invest a small amount. Then do it again.
That is how real investors are built.
Remember, a typical apprenticeship is three-to-four years.
Owen Raszkiewicz is the founder of Rask. This article contains general financial information only, and is issued by The Rask Group Pty Ltd, which acts under AFSL 563 907. Don’t act on the information until you have considered your own needs, goals and objectives, or spoken with a financial planner who can do that for you. Find The Rask Group’s financial services guide (FSG) on rask.com.au.
