How to Start a Portfolio with Your Spare Change

We all want to have our wallets warmed by the slow burn of a share portfolio… To talk with fellow high flyers about bonds and China and gold and stuff.

But it’s a complicated area. It’s hard enough making time to finally draw up a budget, let alone figure out who the hell Dow Jones is.

Lucky for you, there’s a trend of three piece suits unshackling their investment banking balls and chains to start their own businesses. And these startups are mainly serving the financial ignoramuses of middle Australia.


One interesting business to spring up is FirstStep, a platform that plans to allow you to invest your spare change in the share market.

Their tricky system would mean that each time you made a purchase on card, the total would be rounded up to the nearest dollar and that money invested on your behalf.


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Say you bought a burger for $10.50 using your bank card, FirstStep would round that to $11.00, withdraws the $0.50 and invests it for you. Buy a coffee for $3.20, and they’d invest $0.80.

You get the idea.

Of course you need to know where your money is going, so there is some education to be done, but it’s all relatively straightforward.

Your spare change would be invested in Exchange Traded Funds, or ETFs, which are pots of money on the share market that replicate the movements of a certain asset, say Australian shares or bonds.

Take a gold ETF. If the price of gold went up by five per cent, your investment in a gold ETF would go up by around the same amount. If the Aussie share market goes down by two per cent, so does your Aussie share market ETF.

It’s a pretty cool idea that would make investing in shares a fairly pain free process.

However, don’t take this as a ringing endorsement, as these guys aren’t yet licensed to operate in Australia and can’t really do anything for you until they do. And as a rule, you should never deal with a financial business that’s not licenced by the Australian Securities and Investments Commission.

But it certainly looks like a handy little startup for the financially undisciplined. Word on the street is that another service is heading to our shores with a similar offering, Acorns, so check that one out while you’re waiting.

Now for a short share market explainer: