New research uncovers how Kiwis feel about investing
The Face of Investing: New research uncovers how Kiwis feel about investing
Smartshares delve into the new generation of
New research by online investment platform Sharesies, in collaboration with Smartshares, puts the spotlight on how Kiwis plan for our financial future.
Results from 1,000 New Zealanders surveyed by Colmar Brunton in June 2018 shows a lot of Kiwis aren’t aware how simple investing can be and instead assume it is out of reach for them. New technology that makes it convenient, simple and effective to invest in shares could just help change that.
The study showed the majority of us aren’t actively investing in the share market and instead, 72 percent of us opt to keep our money in a savings account, while other common investments include Kiwisaver (65 percent), or owning a home (59 percent). However, there is a change coming. As a new generation of investors come through and home ownership rates continue to drop, Kiwis are beginning to look to other ways to grow wealth.
“Just one in five Kiwis own any shares, and most are male, Aucklanders or over the age of 60. There’s a big opportunity for more Kiwis to start investing” says Brooke Roberts, co-founder and CEO of Sharesies.
Sharesies is a unique low-cost platform offering Kiwis the opportunity to build their own investment portfolio from as little as $5 at a time. The company recently celebrated a year of being in business, during which time it attracted more than 17,000 customers who have invested $18m.
With only 20 percent of Kiwis investing in the markets, research shows New Zealanders lag significantly behind our international counterparts, with 31 percent of adult Australians owningshares and over 50 percent of Americans investing their money.
Roberts says this is largely due to misinformation and misunderstanding around the process of buying shares. The majority of New Zealanders don’t feel knowledgeable about the share market (66 percent).
Further to this, the biggest reasons Kiwis
cited for not investing money are:
• A lack of cash to spare (36 percent)
• Not knowing how to invest in the stock market (34 percent)
• A belief that investing in shares is risky (31 percent)
• The stock market is only for people with lots of money (35 percent)
For Kiwis, education, discretionary income and perception of risk, are the three biggest factors holding us back from investing. This leads to the majority of us leaving our money in the bank rather than investing.
Property is still thought of as the best form of investment above owning shares and 50 percent of us believe it’s not as risky as the share market. People who either don’t want or don’t think homeownership will ever be achievable are happy to let savings sit at the bank (42 percent), with only 10 percent keen to invest in shares. Just 4 percent of us don’t have any form of investments.
“Sharesies, working with Smartshares, has shown that Kiwis can grow their wealth no matter how much they have to start with.,” says Smartshares CEO Hugh Stevens.
“It's great to see the introduction of new technology which makes it easier for New Zealanders to access the share market. Investing in shares has, over time, proven to deliver greater returns than many other investment options."
From 2012 to present, for example, the value of the S&P/NZX 50 has more than doubled.
The study showed that close to 3 out of 5 of us would be prepared to set aside $5 a day to create an investment portfolio, without changing our spending habits. “We’re particularly encouraged by the finding that 38 percent of those who don’t have shares because they don’t have spare cash said they can in fact find $5 a day to invest if it were possible to do so. And with Sharesies, it is.
doesn’t have to involve large sums of money, and instead
even small regular contributions can, over time, become a
substantial portfolio,” says