Island 1 of 6
Shares & Index Investing
Own part of the world's greatest businesses. Let time do the work.
What this island is about
When you buy shares, you're buying a tiny ownership stake in a business. If that business grows over time, your investment may grow too. Some businesses also share part of their profits with shareholders through dividends. Rather than trying to pick individual companies, many people choose to invest through an index fund. An index fund owns hundreds, or even thousands, of companies in a single investment. Instead of trying to guess which company will be tomorrow's winner, you're investing in the long-term success of many businesses at once. For many people, this is one of the simplest and lowest-maintenance ways to begin building wealth.
Where to start
- 1
Open an investment account with a reputable Australian broker. You don't need to invest a large amount. You don't need to find the perfect investment. You simply need to become an investor.
- 2
Once your account is ready, make your first investment in a diversified, low-cost index fund with an amount you're comfortable leaving invested for the long term. The size of your first investment matters far less than building the habit.
Campfire Conversation
The book gave you their story. These questions continue it.
- What was the first share or fund you ever bought and what did you learn from it?
- Was there a time the market scared you? What did you do?
- Did anyone teach you about investing, or did you figure it out on your own?
- If you could go back to 25 and give yourself one investing rule, what would it be?
- What's one thing about money you wish your parents had told you?
Download the Shares & Index Investing checklist
A printable one-page checklist with the five first steps for this island. Save it, share it, or take it to your next family conversation.
- 1Understand the difference between a share and an index fund
- 2Choose a low-cost broker or micro-investing app
- 3Set up an automatic recurring investment
- 4Decide between an ETF or a managed fund
- 5Write down your investing rules before the next market dip
The book that turns lessons into a legacy
The Archipelago teaches the thinking. The Six Islands book is where a parent writes the story behind the money: the mistakes, the wins, and what they want their child to remember.