Your How to Guide for Investing in Shares | Savvy Wealth

Your How to Guide for Investing in Shares

Share investing is one of the pillars of creating financial freedom and is a great way to create passive income. But if share investing is new to you, it can be a minefield trying to figure out how to get started.


In this guide, we take you through what you need to know to get started and the practicalities of doing so.

Decide the amount of money you'd like to invest

In order to know how much money you’d like to invest, it’s important to know your cashflow. How much surplus cashflow do you have and how much of that do you want to allocate to investing? If you don’t have surplus cashflow, what are you paying for that you no longer need or value, which you could stop and re-direct those funds to investing? For assistance in understanding your cashflow,  you can download my money management guide here.

Understand your risk profile

It’s important to understand that investing comes with risk and knowing your appetite for risk and if you can withstand fluctuations in the value of your capital is imperative. Your asset allocation influences the amount of risk you take, that is the fluctuations in the share price as well as your potential returns.


Diversification is known as not having all of your eggs in one basket and can help to smooth out your returns over time. Your risk profile determines what percentage you have allocated to growth and defensive assets and then how much allocated to the individual asset classes within the growth and defensive assets. You can read more about diversification and asset classes here.


How do you feel about the potential for your investment to decrease by 20%, 40% or even more in the short term? Would you want to withdraw your money? These types of questions are what is going to help you ascertain your risk profile. There are also risk profile tools online, like this vanguard one.

Decide if you would like to obtain robo advice or select Exchange Traded Funds (ETFs) or direct shares to buy

Robo advice is where the platform selects the ETFs on your behalf based on the risk profile you’ve selected. There are a number of investing platforms that offer this service. Alternatively, you can select the individual ETFs or shares you’d like to invest in, however you will need to ensure the asset classes are in line with your risk profile and the asset allocation for it.

Select and open the platform you'd like to use

The platform you select is going to depend on the features that are important to you such as whether you want robo-advice or to select your own shares and/or ETFs. Once you have selected the platform, you will need to open an account (similar to opening a bank account except it’s done online) then deposit funds into the platform from your bank account ready to invest or set up an automatic transfer.

Make investments

If you’ve elected to go with robo-advice, choose your desired portfolio in the platform and either invest some funds and/or set up an automatic transfer. 

If you’ve elected to choose the ETFs or direct shares you’d like to have in your portfolio, select them on the platform and ensure they fit into the asset allocation for your risk profile. Determine what you would like to start investing in first.

Start small

If you’ve never invested in shares before or had a challenging experience, start small. This will allow you to see how you actually feel when the market fluctuates. You can then build up the amount you invest over time.

Determine when & how you will re-balance your portfolio if you're investing in shares and/or ETFs

Pre-determining this helps ensure that your portfolio stays in line with the asset allocation for your risk profile. You can re-balance at regular intervals (eg quarterly) or when your asset allocation deviates by a certain percentage (eg 5% or 10%). Determine how you are going to re-balance. Some options are  diverting new contributions to the underweight asset class, diverting dividends to the underweight asset class or selling the overweight asset class to invest in the underweight asset class or a combination of these.

Schedule a time each month to review your portfolio and make any adjustments

Whilst investing can be automated, it’s important to regularly review your portfolio to ensure it’s still aligned with your selected asset allocation and you are comfortable with how it’s tracking.

Investing can be a great way to grow your wealth over time and build passive income. Before investing, you should decide how much money you’re comfortable investing and understand your risk profile. Freom there, you can decide whetehr to obtain robo advice, select ETFs or direct shares to buy, and choose a platorm that suits your needs. It’s important to start small and gradually build up your investments, rather than trying to invest too much too quickly. You should also determine when and how to rebalance your portfolio if you’re investing in shares or ETFs, and schedule a time each month to review your portfolio and make any necessary adjustments.