Paul Clitheroe | Effie Zahos | Alan Kohler top money tips for 2024

The start of a new year is an excellent time to (re)focus on your money and investing goals. It sounds cliched but taking some time to commit to improving your financial position, start investing or educating yourself about investing will make you feel great. From where to invest and how to better manage your emotions, when markets go nuts, our experts have a tip for you.

Paul Clitheroe, InvestSMART Chairman, and the OG money and investing expert

Invest internationally 

The principle of international diversification is simple. Australia’s sharemarket is less than 2% of global markets. Equally, our market is strongly resource based. You don’t need to be the Albert Einstein of investment to work out that leaving all your assets in 2% or less of the globe means missing out on the return potential and diversification benefits of the remaining 98% of the international market. 

Stick to the basics 

Success as an investor isn’t restricted to the rich, the highly educated or those who think making money calls for elaborate strategies. The basics of wealth creation are incredibly straightforward. People who spend less than they earn, invest on a regular basis and focus on quality assets will be a lot richer than ‘market timers’, lottery hopefuls, those who can’t get their act together, or those who spend their lives saying, “I’ll get started tomorrow.” 

Take a long term view 

History shows that growth assets, such as quality shares, are spectacularly effective over 10- and 20-year timeframes, but they can be extremely volatile over the short term. That makes it essential to commit to the long term rather than reacting to short term market movements. 

Effies Zahos, money and investing expert

Inflation-proof your budget 

Inflation may be declining but it will take time for prices to fall, and household budgets could still be stretched in 2024. That makes it important to plan where every dollar goes. One strategy is to use separate accounts or ‘buckets’ for different purposes – like bills, emergencies and fun. Work out how much money needs to go into each bucket every month, then set up automated transfers out of your main transaction account and into your various buckets. You should never find yourself short on cash again. 

Treat investments like a subscription 

No matter whether you’re a fan of Netflix, Stan or Amazon Prime, chances are you never miss a payment because your subscriptions are automated. Take the same automated approach to growing your investments. You’ll never have to worry about market timing, and your portfolio can reap the rewards of dollar cost averaging. 

Slash your bills 

Household bills tend to creep higher each year. But it’s possible to find savings with a small amount of effort. From energy to insurance, start by making sure you have the right product for you. Compare offers from other providers instead of auto-renewing – the best deals are often reserved for new customers. Even if you swapped last year there’s nothing stopping you swapping again in 2024. Canstar’s cost of living index shows you could potentially save over $12,000 by switching regular household bills from the average cost to either the cheapest or 5-star rated products. 

Alan Kohler, founder of the Eureka Report, Weekend Brief and ABC finance expert

Look at older apartments

If you’re investing in an apartment, make it an older, well-built one, not a new one, and definitely not off the plan. 

Research property markets out of the big cities

Look for property markets where prices have been weak but likely to benefit from post Covid tourism and resources, for example Darwin or regional Queensland 

If it's not volatile, are you even invested?

If you’re investing in shares, expect volatility and low returns

Ron Hodge, InvestSMART CEO

Set financial goals

Have a specific goal in mind, even if it’s just a figure you’d like to reach in 5 years, will help you to guide your investment and money choices towards a brighter financial future. 

It’s never too early to invest

Investing might seem like something can be left for the distant future. The truth is time is your greatest asset. The earlier you start, the more time your money has to grow through the magic of compound interest. 

Equally, it’s never too late

The number of clients I’ve met who told me they thought they were too old to invest or that they need to be an expert is staggering. I created InvestSMART to help more Australians access low cost investment portfolios. Compounding still works even if you’re starting out later in life.  

Tom Wilson, InvestSMART investor education

Improve your investing knowledge

Start a course like InvestSMART Bootcamp to learn skills in investing and get ahead. 

Look for new ways to expand your income

This could mean starting a side hustle or investing in different areas.   

Take advantage of automation

Set up your accounts to automatically handle saving and investing, keeping your finances on track effortlessly. 

Follow Tom on TikTok @investsmart_australia

Mitchell Sneddon, InvestSMART's head of portfolio services

Seek compounding

In the words of Charlie Munger, never interrupt compounding unnecessarily. The biggest mistakes I’ve seen clients make over the years is jumping out of the market. It may feel good at the time but they face a much harder call, when to get back in. Inevitably they anchor to the point they pulled out and when the market has recovered fear it’s too high to jump back in. 

Being average is better than average!

Most people fail to get the index return when all they need to do is hold the index in an ETF. They fail to achieve this because they are trying to time the market and trade too much or pick the next big winning stock (it’s really bloody hard). Get the average return and beat these types of people and spend your time doing what you enjoy rather than agonising over asx announcements. 

Think total returns

It’s unbelievably common how many investors I come across who have focused purely on dividends and ignored capital return. I understand the allure of franking credits but this has seen them miss out on investing globally and benefiting from the capital return of the dominant global players and further strengthen their portfolio through diversification. 

Daisy Causer, InvestSMART funds management services 

Don’t let your emotions drive your portfolio

Emotions like fear and greed can lead to impulsive decisions that may harm your portfolio. Avoid making rash decisions based on short-term market movements and stick to your long-term strategy. 

Consider dollar-cost averaging

Spread your investment over regular intervals, to help reduce the impact of market volatility.  

Stay updated but avoid doing too much

Monitor your portfolio periodically for performance evaluation and adjustments in line with your goals. Avoid the temptation to make daily changes, as excessive tinkering can lead to increased costs and hinder long-term growth. 

Mitchell Datson, InvestSMART portfolio services

Tune out the noise

Markets have always and will always fluctuate for a million different reasons; don’t listen to every news outlet, consider those you respect, take a step back and look at the big picture. 

Don’t live in the now

Avoid judging an investment by returns in the short-term instead look to opportunities that have stood the test of time. 

Know your limitations

If you don’t have the time, skill or desire to run your investment portfolio effectively then stop impacting your future and find an investment manager who matches your needs.