Starting to invest can feel overwhelming — but a well-designed beginner portfolio can be built in an afternoon and maintained in under 30 minutes a year. This guide covers everything a complete beginner needs to build their first Australian investment portfolio.
Step 1 — Get Clear on the Basics
Before opening a brokerage account:
What is an ETF? An Exchange Traded Fund is a collection of shares bought in one transaction. VAS, for example, holds ~300 Australian companies at once. Buying 1 unit of VAS gives you fractional ownership of all of them.
What is a brokerage account? Your account through which you buy ETFs and shares on the ASX — like a bank account but for investments.
What is the ASX? The Australian Securities Exchange — where Australian shares and ETFs are listed and traded.
Why not just put money in savings? High-interest savings accounts currently pay 4–5% — reasonable. But historically, Australian shares have returned 9–10%/year over long periods, significantly building long-term wealth beyond inflation.
Step 2 — Set Your Starting Point
You don’t need much to start:
- Minimum practical amount: $2,000–$5,000 (enough to cover brokerage without it being a large percentage of your investment)
- Ideal first investment: $5,000–$10,000 for a meaningful start
If you have less than $2,000, consider a micro-investing app (Raiz, Spaceship) or wait until you’ve saved a lump sum. Regular small contributions also work — $200–$500/month builds meaningfully over time.
Step 3 — Choose a Broker
For a first-time beginner, simplicity matters:
SelfWealth: $9.50 flat brokerage, clean interface, good for regular investing Pearler: $6.50 brokerage, built for long-term ETF investors, auto-invest feature CommSec: Trusted, full-featured; higher brokerage ($19.95 under $10K) but integrates with CommBank
Open your account online (typically 5–15 minutes), link your bank account, complete ID verification. Most accounts are approved within 1–3 business days.
Step 4 — Choose Your ETFs
For a complete beginner, two ETFs cover the world:
| ETF | What it covers | MER |
|---|---|---|
| VAS | ~300 Australian companies (banks, miners, retailers) | 0.07%/year |
| VGS | ~1,500 global companies (US, Europe, Japan) | 0.18%/year |
Simpler alternative: VDHG (Vanguard Diversified High Growth) — one ETF that covers Australian shares, global shares, and bonds automatically. MER 0.27%. No rebalancing required.
Recommended starting allocation for a long time horizon (10+ years):
- 40% VAS + 60% VGS
- Or: 100% VDHG if you want maximum simplicity
Step 5 — Make Your First Purchase
- Transfer funds from your bank to your brokerage account
- Search for “VAS” or “VGS” on the ASX
- Choose “Buy” — set the number of units based on the current price and your budget
- Select market order (buy at current price) or limit order (set a price limit)
- Confirm the order
Example: $5,000 investment at 40/60 split:
- Buy $2,000 of VAS at ~$100/unit = 20 units
- Buy $3,000 of VGS at ~$115/unit = 26 units
Step 6 — Set Up Ongoing Contributions
The most powerful thing you can do after your first purchase is automate regular contributions:
- Set up a direct debit from your salary account to your brokerage account on payday
- Buy ETFs monthly (or whenever your cash balance exceeds $2,000–$3,000 to make brokerage worthwhile)
- Pearler can automate this process entirely
Even $200/month invested consistently for 20 years can grow substantially through compounding. Time in the market matters far more than the size of your initial investment.
Step 7 — Leave It Alone (Mostly)
A beginner portfolio requires almost no management:
- Monthly: Confirm your regular contribution went in
- Annually: Check your allocation hasn’t drifted significantly (>5–10%); rebalance by buying the underweight ETF
- As needed: Reinvest dividends (or set up DRP if available)
Do not check your portfolio daily. Do not sell when markets fall. Do not attempt to time the market.
Common Beginner Mistakes to Avoid
- Waiting for the “right time” to invest — there is no perfect time; time in market beats timing the market
- Investing in individual shares — concentration risk; ETFs are better for beginners
- Buying too many ETFs — two broad ETFs (VAS + VGS) are sufficient; adding niche ETFs adds complexity without clear benefit
- Selling during a market fall — market falls are normal; selling converts paper losses to real losses
- Not considering super — employer contributions into super are your largest automatic investment; maximise them
- Checking your portfolio daily — short-term fluctuations are noise; annual reviews are sufficient
Related Articles
- Getting Started Investing Australia
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- Portfolio Fees Australia
- Portfolio hub
Frequently Asked Questions
How much money do I need to start investing in Australia? Practically, $2,000–$5,000 is a useful minimum so that brokerage fees ($9.50/trade) are not a disproportionate cost. Micro-investing apps like Raiz or Spaceship allow starting with as little as $5. There is no legal minimum for ETF investing.
Is VAS or VDHG better for a beginner? VDHG is simpler — one ETF covers Australian shares, global shares, and bonds automatically with built-in rebalancing. VAS + VGS requires you to maintain two funds and rebalance occasionally, but gives more control over allocation. Both are reasonable beginner choices.
Should I invest in super or separately? Ideally both. Maximise your employer’s super contributions and consider salary sacrificing extra. Also build an outside-super investment portfolio for pre-retirement access and flexibility. Super is tax-advantaged but locked away until preservation age (currently 60).
This article provides general financial information only. For advice tailored to your situation, speak with a licensed financial adviser through the ASIC financial advisers register or MoneySmart.