Investing basics
Easy ways to be smarter with money
Investing
basics
Easy ways to be smarter with money
Whether you’re saving for your first home, thinking about retirement or simply wanting to get smarter with your money, knowing where to start with investing can feel overwhelming. To help cut through the noise, Contact asked UQ Business School experts Dr Eric Tan and Dr Natalie Peng to share clear, practical advice you can put into action today.
Dr Eric Tan
Senior Lecturer in Finance
Dr Natalie Peng
Lecturer in Accounting
Here’s 4 things you should consider as a starting point
Dr Tan: Before thinking about stocks, funds or other asset classes, it helps to start with a few simple considerations.
1. Firstly, what are you investing for? Saving for a house deposit in 3 years feels very different from investing for retirement decades from now. Short-term goals usually call for more caution, while longer horizons give you more room to ride out market ups and downs. In my teaching, I often remind students that your timeline and your comfort with risk are 2 sides of the same coin and that they need to line up.
2. Liquidity is another thing to consider. Shares can usually be sold quickly if you need cash, but property or private investments can take months to unwind. How easily you might need access to your money should influence the mix of assets you hold.
3. It’s also worth getting comfortable with the basic idea of risk and return. Investments that offer higher potential returns generally come with more uncertainty. You don’t need to be a mathematician to understand this, but it’s important to be sceptical of anything that claims you can earn high returns with little or no risk. If it sounds too good to be true, it probably is.
4. Finally, diversification remains one of the most practical ideas in investing. Instead of putting all your money into one company, sector or trend, spreading your investments across different types of assets can help soften the impact when something goes wrong. Investors often call this the “free lunch” of finance because you can reduce risk without necessarily giving up returns.
Common mistakes new investors make
Dr Tan: A very common mistake is assuming that strong past performance will continue. It’s tempting to pile into last year’s best-performing fund or stock, only to find that its luck doesn’t last. This is why investment products routinely carry the warning or disclaimer that “past performance is not a reliable indicator of future performance”. Focusing on how an investment is managed is usually more helpful than chasing recent winners.
Another trap is letting emotions drive decisions. Many investors trade too often, panic during market downturns, or fall in love with certain companies. These reactions can hurt returns through bad timing and unnecessary costs. A steady, rules-based approach generally works better than relying on gut feelings in the heat of the moment.
Fees are another area where investors can get caught out. Management fees, performance fees and commissions aren’t always obvious upfront, but they can make a big difference to the outcome of your portfolio. Taking a few minutes to understand what you’re paying for can save you a lot of money over time.
Start thinking about your super – today
Dr Peng: It’s easy to think of superannuation as a ‘locked box’ for the distant future, but it is actually one of the most effective tools we have right now. At its core, super is a tax-friendly way to grow your money. While the tax on your take-home pay can be quite high, the tax on money going into super, and the profit it earns, is generally capped at just 15%. This ‘head start’ means your savings can grow much faster inside super than in a standard bank account.
For those balancing a mortgage or career growth, super acts as a steady engine for building wealth. Because you can’t dip into it easily, it naturally protects you from the temptation to spend your savings or react to short-term ups and downs in the market. By treating super as a core part of your financial life today, rather than just a line item on a payslip, you’re making the most of a system designed to work for you over the long run.
What do you need to do to actively manage your super?
Dr Peng: You don’t need to be a financial expert or watch the news every morning to manage your super well. In fact, a ‘set and forget’ approach is often very successful.
However, being completely disconnected can be expensive. Over a 30-year career, small differences in fees or being in the wrong investment category, like a low-growth option when you still have decades of work ahead, can lead to a much smaller balance in the end.
Checking in once a year is usually enough to keep things on track. You might start by looking at your investment type to see if it matches your age. For example, if you have a long career ahead of you, growth options can help your balance increase more significantly over time. It is also worth reviewing your fee footprint to ensure you aren’t paying for insurance you don't need or high administration costs that eat into your profits.
Finally, if you have small accounts lingering from old jobs, bringing them together is one of the simplest ways to stop multiple sets of fees from shrinking your savings.
How to know if your super is working for you
Dr Peng: The superannuation system is becoming much more transparent. Recent rules mean the government now flags funds that aren't performing well, making it easier for everyone to see how their fund compares to others. This is a big win for us as members, as it forces funds to work harder and gives us a clear signal if it might be time to look for a better home for our money.
Looking ahead, we are seeing a shift toward helping people not just save money but spend it wisely when they eventually retire. It has never been easier to see exactly what you’re paying for and what you’re getting back. Staying aware of these basics helps you stay confident that your strategy is still working for your future.
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