How a 24-year-old engineer started investing

Caitlin Lawrence began investing a year ago. Now her advice to her peers is simple and straightforward: just start now.

The Deloitte employee started investing around this time last year after realising just how low the interest rates on her saving accounts were.

“I'd just started a job…in consulting and I had, prior to that point, traditionally just saved money in the bank and I thought that was the normal thing to do,” she said.

“Starting at Deloitte, that was the first time I had a salary, so I thought, 'Great, I have to be smart about this. I have a continuous income, so I need to be smart with my management of that.'”

This moment of realisation coincided with the COVID downturn, which drove a hammer through savings rates and launched Lawrence into action.

This is what she did.

The investment and the returns

Lawrence knew she needed to move at least some of her money out of the bank and into the share market.

“I didn’t know a lot about the stock market and share trading, so I was a little bit intimidated,” she said.

“But I looked at a lot of different areas and I’d heard about Stockspot and I thought that was a good introduction and stepping stone into investing, but I was also talking to my Dad about how CommSec works and what you actually need to do to buy.”

Lawrence ultimately decided to begin investing with online investment advisor Stockspot.

This platform works by assessing investors’ risk appetite, timeline and interests and then investing their money into exchange-traded funds, or ETFs.

ETFs are essentially baskets of shares that track an index, like the S&P200, or a theme, like green investments.

Because ETFs are made up of dozens of companies, they’re generally considered a cheap and easy way to diversify an investment portfolio and spread risk.

She felt Stockspot, and ETFs more broadly, took some of the pressure off her to decide where to invest.

“I thought that, despite not choosing those individual shares to invest in, like you would with CommSec, Stockspot helps customise the portfolio and your risk portfolio, so that helps you to have different investments,” she said.

“Diversification was the biggest thing to me, and that’s why I started off with them.”

Since then, her investments have grown to include government bonds, international shares, cryptocurrency, and now she also invests in individual shares.

She chose to begin investing with $5,000, but now invests significantly more after investing in property and in other investments with her partner.

Since last year, that $5,000 has grown to $7,000.

“That’s after one year of not having to do anything, which is quite nice.”

The experience and the lessons

Her portfolio allocation today is 60 per cent Australian shares, 20 per cent cash and bonds, and 15 per cent gold.

“It’s quite diversified, and based on those it’s quite good because you get involved in a lot of different areas,” she said.

“From the initial Stockspot stepping stone, it made me realise that ETFs are quite good to get involved with, in terms of CommSec. And from that, I’ve done my own research into companies and different organisations that I’m interested in.”

Now, if she’s choosing individual shares to invest in, she’ll follow another simple rule: invest in things you know and things you use.

For Lawrence, with her engineering background, that means investing in companies like CSL. And she’ll also invest in companies like Zip and Afterpay as she uses them.

However, her biggest piece of advice remains simple: start now.

“If you haven’t started your investing journey, then do it now. Do your research, do your due diligence, assess your risk appetite, make sure that whatever you’re putting in you’re willing to lose,” she said.

“That’s one of the biggest things. I was nervous to invest in those Buy Now, Pay Later platforms like Afterpay…but just taking that plunge when I felt comfortable enough, after I’d done my research, was quite good.

“Once you’ve made those decisions, have confidence that in the long run you will see those returns and make sure you’re not doing it for those short term returns, but for that longer term financial freedom.”

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