Podcasts

How Sharesies is making investment portfolios for everyone, not just the rich

Business is Boring is a weekly podcast series presented by The Spinoff in association with Callaghan Innovation. Host Simon Pound speaks with innovators and commentators focused on the future of New Zealand, with the interview available as both audio and a transcribed excerpt.

One of the common kind of bleats from this podcast is that as a country we invest too much in unproductive assets like houses and interest payments, and not enough into companies. One of the reasons we are like this is that it actually isn’t that easy to invest in other stuff.

In order to get into something like shares there are risks, and also you need to get a diverse range of investments to spread your risk. There are managed funds, full of fees and large sums needed to invest, there is share trading through a bank, but with 30 bucks each brokerage you need to be doing more than about 2000 at a time or else the fees are more than a 6% return. It actually just isn’t that easy. Enter Sharesies!

A cool new idea that makes it easy to invest. Simply set your industry preference, risk appetite and get started with as little as 50 bucks a go.

It aims to increase financial literacy and get more people into good investment practice, and its promise, that I love, is that you don’t need to be rich to have a share portfolio anymore. Co-founder and CEO Brooke Anderson joined me to chat all things Sharesies.

Either download (right click to save), have a listen below, subscribe through iTunes (RSS feed) or read on for a transcribed excerpt

You guys are in beta now. How many users have you had join already?

It’s astounded us, the growth that we’ve got. We’ve got over 2100 people on our platform. We’ve only been out for a month. In our probably audacious business model we thought 1000 in the first month so we’ve doubled our hopes. It’s amazing seeing how these people behave with their money and how they’re getting into investing. What I also love about these users is 80% are under 40 [years old], which is so different to how the industry is today. The majority of investors are probably over 50.

I got excited by shares, much like anyone who’s a business nerd, when I was younger and had very limited resource. It took me a while to realise that if I was putting through a $500 purchase with a $30 brokerage fee and then $30 to sell it again, you had to be getting like 20% returns just to break even on your brokerage. And then you’d have to save up to get it all the way up to $2000 to make it worthwhile doing a transaction. And that could be a year and the boat’s sailed. So it’s a fantastic model to have cracked.

Three key reasons, or problems in the industry, why we started Sharesies were 1) the minimum buy-in for investing is way too high. It’s in the thousands, typically, in order to get a return. And most funds expect ten thousand or more. 2) Jargon. There’s so much jargon that scares people off from investing. So we try and eliminate the jargon but in saying that we don’t want our investors to have a new kind of language or anything. But we try to demystify it and break it down and turn it into everyday language. 3) the industry is definitely targeted to the wealthy few and that’s what we wanted to stop.  We wanted the ability for any New Zealander to have a crack at investing.

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