Maybe you catch an Uber to work while listening to Spotify and checking Instagram on your iPhone. Arriving at work, you open up Google and start researching your next holiday (at least the stats say we do). Feeling inspired, you head to Kathmandu on your break and use Afterpay to purchase the perfect holiday jacket. That may seem like an unrealistic scenario to you, but when it comes to investing, it often helps to think about the products and services you use on a daily basis. Who is really benefiting from your purchases?

I once read an anecdote about a father explaining to his son, while eating at McDonald’s, the difference between consumers and owners. While they had paid for and enjoyed their meal, it wasn’t the staff or management that ultimately benefited from their purchase, but the shareholders of the company which anyone can buy on the New York Stock Exchange (NYSE).

That started to reframe the way I looked at the products and services I use every day; was I happy simply consuming them or did I want to benefit financially from their growth and success?

The great thing is that you don’t even need to make the decision to buy Netflix or Facebook. By simply investing in an Exchange Traded Fund (ETF), such as IVV, you get instant exposure to the top 500 US-listed companies. Think Microsoft, Visa, Walmart, Disney, Boeing, Starbucks and Nike. If you want to invest in Asia there’s an ETF for that — IAA, we’re talking Tencent, Samsung and Bank of China. Thinking about Europe? You’re covered as well; Nestle, Allianz and L’Oreal can all be found within VEQ.

Investors have more places to invest their money than ever before. There’s something for everyone; the NYSE even saw its first vegan ETF launch a few months ago. It can often be overwhelming when you’re getting started with investing, however, it’s important not to overcomplicate your approach. Warren Buffett claims you should only invest in ‘simple businesses’ that you understand. Analysts will often point out that to be a successful investor you need to invest within your circle of competence, or as Safal Niveshak puts it, “the businesses that you understand fall within the circle, and the ones you don’t understand fall outside it”.

Many investors I speak to are purely focused on Australia and the different options available within our borders, and it has been well documented that we are biased to our home country when we invest. So be sure to consider countries beyond our borders, when building your investment portfolio.

Learn more about investing here at How To Money.

Kate — HTM Founder & Editor

Want to learn more about money and personal finance? Check out our article archive, the How To Money Podcast and the Australian Finance Podcast. Catch us on Twitter @HowToMoneyAUS and Instagram on @HowToMoneyAUS.

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