In this series, we ask investors from all walks of life to chat about what it was like to make their first ever investment. We caught up with Trade Me CFO Caroline Rawlinson who found a creative way to buy her first shares as a university student.
Caroline Rawlinson may work for Trade Me, but she’s not interested in trading her investments any time soon. The successful young CFO started by purchasing shares in Fletcher Building as a teenager, while she was a student.
Working toward a double degree at university, and influenced by her father’s investments, she dove in, and has kept a hand in the share market ever since.
Despite studying Law and Economics, Caroline veered toward Finance—landing her first job in Corporate Finance at PwC.
She went on to work in strategy for Sealord and then Fletcher Building before her first CFO role for Formica in Asia. Caroline moved back to New Zealand eight months ago to start as the CFO at Trade Me.
Through different ages and life stages, Caroline continued to keep a close eye on the market.
“Shares are a long-term game; I have had a few losses but overall more wins. I enjoy educating myself and watching a Company’s journey — it is more interesting than having that money sitting in the bank.”
Caroline tells of her path to investing, which all started with a student loan.
Can you tell us about your first investment?
In my first year at Auckland University I had two jobs and worked to pay for my living costs. All my friends had student loans—so I got one too—and decided to start investing in the share market.
My first purchase was shares in the Fletcher Building, I had those shares throughout University and still own the stock today.
At the time I was young and didn’t really think about the risk of putting all of my eggs in one basket with Fletcher Building. But it worked out. I ended up doubling my investment and was able to pay back the student loan and leaving uni better off. Thinking back on it, most of that success was pure luck.
How did you choose what to invest in and what was the process?
There had been a lot of press about the Fletcher Challenge group splitting up to create four new companies—Fletcher Paper, Fletcher Forest, Fletcher Building and Fletcher Energy, so I thought it would be a good time to buy in.
I didn’t trade the shares, my plan was always to buy and hold onto them. I put about $5,000 into shares each year while at uni.
What, if anything, would you do differently?
If I knew what I know now, I would have spread the risk by buying into a more diverse range of stocks. I would have bought smaller parcels of shares in more companies. It was quite a risky strategy going all in like I did, but I was fortunate that it worked out.
People often think you need loads of cash to invest? What do you think?
A lot of people don’t have a lot of knowledge around KiwiSaver or how it works, so I think there’s a huge opportunity to educate people more about investments. Many people are already investors in NZ companies through their KiwiSaver scheme but aren’t aware of this.
It’s a common misconception that you need a lot of money to make a lot of money. You don’t need to save $10,000 before your think about the sharemarket—you can start with $1,000 or less. Sharesies presents another option for people who want to dip a toe in, but don’t know where to start.
What do you like about having an investment and why should people try it?
People should do it because it’s interesting; you get to learn stuff and (often) make money at the same time. I was lucky that my Dad had a share portfolio and I was able to learn a lot from him, but I think there is a gap in the market to simplify and de-mystify the investment process.
My investments helped me buy my first home—I sold my shares to fund the deposit when I was 25. It was a two-bedroom unit in an outer suburb of Auckland, but investing young allowed me to make my first step into the property market.
What is the best piece of advice you have given (or been given) about investing?
It’s important to understand something about what you are buying—read the newspaper, do research online. Buy a company you can relate to—I travel a lot so like walking through Auckland Airport and flying Air NZ knowing I own a little bit of these companies.
Diversity is also key—don’t put all your eggs in one basket. It’s about spreading your risk.
You also need a bit of a buffer; stocks are less liquid than cash and you should never be a desperate seller. So don’t spend money on shares that you may need in the next 6 months—keep that in cash in the bank.
Thanks, Caroline! 🙌
If you have any questions about how to get started with investing, leave a comment, and we’ll add this to the next blog.