Ask Paul: I have $10k to invest in shares - where should I start?

Q. I'm a 30-year-old single midwife earning $110,000 a year.

I co-own an investment property with my brother - it's worth $500,000 with $490,000 owing on it due to the drop in the Perth property market. The cost per fortnight is around $300 each as the rent doesn't cover the mortgage.

This is financially comfortable for me.

Recently I inherited $180,000 that is now sitting in my offset account (my brother and I have separate offset accounts).

My plan is to leave the money there and, in one to two years, use it as a deposit for an apartment to live in.

However, I would like to use some ($5000-$10,000) to invest in a share portfolio, ideally one that I can add money into each pay.

I don't really know much about shares and would like a diversified portfolio to build long term - i.e., an initial investment of $10,000 and then a further $200 from each fortnightly pay.

Do you have any advice on how to invest more wisely? - Emma

Good on you, Emma. Obviously the downturn in the Perth property market has not helped you but, as you say, this is not a financial stress for you.

Markets are cyclical and time plus population growth should provide decent returns.

Yes, I like your idea of buying your own apartment in a year or two and getting experience as a share investor by starting a small portfolio. There are a few ways you could go here.

You could choose a few shares and buy them cheaply using an online broker.

Each time you build up to, say, $1000 you could add to one or two of your holdings, or buy a different company. The ASX has a free online share course that would help you here.

Or you could choose a low-cost ETF that invests in shares in Australia or around the world and add to it. Or you could go with a managed fund with a regular investment facility, where funds are automatically invested via a direct deposit.

I do like the idea of you building a share portfolio. However you choose, it will not only build wealth over time but will also build your knowledge.

The big plus of being 30 is that you have years in front of you to create wealth. By saving and investing, paying off your property, buying an apartment and building your super as you are now, time and compound returns will do the rest.

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