Investing as a millennial in Australia comes with its unique opportunities and challenges. However, buying assets such as stocks, bonds and commodities can enable you to grow your financial wealth.
Whether you are just beginning or looking to refine your approach, this article offers valuable advice tailored to your financial goals. Based on the golden rules of investing, it focuses on the factors that younger Australian investors need to incorporate into their strategy planning.

Introduction to Investing
Investing can seem daunting at first, but you can build your confidence by gaining a greater understanding of the basics of the financial markets. Buying assets such as stocks, bonds and commodities does involve risk, but also offers opportunities for growing your wealth.
Tip: Create a detailed budget of future costs including categories such as housing, healthcare, leisure and emergency funds.
Understanding financial markets and assets
Financial markets are essential for facilitating the exchange of assets. They provide a platform for investors to buy and sell, ensuring liquidity and price discovery. Assets, on the other hand, are the financial instruments that can be traded in these markets. Commonly held assets include:
- Stocks: Shares of ownership in a company.
- Bonds: Debt securities issued by corporations or governments.
- ETFs: Exchange-traded funds that pool money to buy a diversified portfolio of stocks or bonds.
By understanding these components, you can make informed decisions and begin to build a robust investment strategy.
Tip: Start by researching low-cost, user-friendly investing platforms that provide educational resources.
The Importance of Early Investment
Starting your investment journey early can have significant benefits. One of the most powerful concepts in investing is the compounding effect, which can lead to substantial long-term growth.

Compound interest and long-term growth
Compound interest is the process where the interest earned on an investment is reinvested, allowing your money to grow exponentially over time. The earlier you start investing, the more time your investments have to compound, potentially leading to greater wealth accumulation.
For example, if you invest $1,000 AUD at an annual interest rate of 5%, after 10 years, your investment would grow to approximately $1,628 AUD. However, if you wait five years to start investing, your investment would only grow to about $1,276 AUD in the same timeframe. This demonstrates the importance of starting early to maximise your investment potential.
Navigating Investment Choices
As a millennial investor, you have a variety of investment choices at your disposal. Understanding the differences between stocks, bonds and ETFs can help you make informed decisions.
Stocks, bonds and ETFs
It’s important to know that each type of investment has its own characteristics and risk levels.
Stocks | Bonds | ETFs |
---|---|---|
Offer potential for high returns but come with higher risk due to market volatility. | Generally considered safer than stocks, providing steady income through interest payments. | Offer diversification by investing in a basket of stocks or bonds, reducing risk compared to individual stocks. |
By diversifying your investments across these assets, you can balance risk and reward to suit your financial goals.
Tip: Regularly review your portfolio and perform portfolio rebalancing to ensure that it aligns with your financial goals and risk tolerance.
Risk Management for Millennials
Managing risk is a crucial aspect of investing, especially for millennials who may have longer investment horizons. Diversification and maintaining a balanced portfolio are key elements of any risk management strategy.

Diversification and portfolio balance
Diversification involves spreading your investments across various asset classes to reduce risk. A well-diversified portfolio might include a mix of stocks, bonds and ETFs, which can help cushion against market volatility.
For instance, during a stock market downturn, bonds might perform better, helping to offset losses in your portfolio. Maintaining a balanced portfolio aligned with your risk tolerance is essential for long-term investment success.
Tip: Having a well-balanced portfolio leaves room for smaller amounts of capital to be invested in riskier assets such as crypto.
Ethical and Sustainable Investing
Many millennials are interested in aligning their investments with their values. Ethical and sustainable investing allows you to support companies that prioritise environmental, social, and governance (ESG) factors.
Aligning investments with values
Ethical investing involves selecting companies that meet specific ethical criteria, such as environmental sustainability or social responsibility. This approach not only supports companies that align with your values but can also lead to competitive returns.
For example, investing in renewable energy companies can contribute to environmental sustainability while potentially offering attractive returns as the world shifts towards cleaner energy sources.
Final thoughts
As a millennial investor, you have the advantage of time on your side. Embrace the chance to grow your investments early, and do so wisely by staying informed and adaptable.
You also have more time to improve your understanding of the markets and learn from your mistakes. By making educated decisions and leveraging resources like this guide, you can set a solid foundation for your financial future.
Learn more about investing by joining the eToro Academy.
FAQs
- How much money do I need to start investing?
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You can start investing with as little as $100 AUD. Many platforms offer fractional shares, allowing you to invest in high-value stocks without needing a large sum of money.
- What is recurring investing?
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Recurring investing involves investing a predetermined amount of cash on a regular basis — for example, every month. It uses the principles of dollar cost averaging to enable you to track, rather than beat the market.
- How much money should I keep in a savings account, and how much should I invest?
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This will vary from person to person. Assess your current financial situation and your short-, mid- and long-term goals. Keeping a reserve fund can in the long run improve your investment returns — for example, if it removes the need for you to liquidate financial assets to free up cash during a bear market.
This information is for educational purposes only and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to, buy or sell any financial instruments.
This material has been prepared without regard to any particular investment objectives or financial situation and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Not all of the financial instruments and services referred to are offered by eToro and any references to past performance of a financial instrument, index, or a packaged investment product are not, and should not be taken as, a reliable indicator of future results.
eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this guide. Make sure you understand the risks involved in trading before committing any capital. Never risk more than you are prepared to lose.