Hi, I'm Ben.
I have no experience in the stock market, I have no financial background experience, I didn't study anything at university. I work as a Desktop Support Technician. I don’t know anything about how this works and I find whenever I try to search for the details of how it actually runs… I'm just presented with 101 people suggesting me to subscribe to their newsletter and stock choices for 200-2000 per year. I apologise if this is a stupid question in advance.
I'm looking to be able to invest a portion of my earnings into the stock market. I can't afford a deposit for a house so instead of letting my money sit in a bank earning basically nothing I figure I can turn to the stock market to help me achieve that 20% deposit number quicker.
In all the reading I've done about how to invest in the stock market, I consistently come across the terms index tracking funds and how they regularly outperform over 80% of the managed funds on the market, mostly due to the high management fees of the managed funds.
But then when I try to read into the details about these index funds, it once again, is just a labyrinth of someone trying to sell me something. The main question I have is;
How do these index tracking funds outperform managed funds when the charts look like this. (Like I said, I apologise if this is just an outright stupid question.)
So... The way I understand it. If I started my investing in approximately the start of 2010... Which is just a random time in history that the share price/value of this tracker has been the same as it is as I am writing this question.
If I invested $500 per month for 6 years, that's 6 grand a year. ASX:STW says it is currently paying 4.16% dividend. which is approximately 250 bucks. But the price didn't even make the whole of 2010 before dropping, so you're not even getting 4.16% on $6000, you're getting even less than $250.
What I FAIL to see, is if I invested 500 of my monthly earning into one of these funds since 2010, how would I have actually made ANY money? Dividends could go up and down, value of the share could go up and down, but it all ends up at the same place. what did I make in 6 years? 1k-2k-3k on dividends?
I see investment funds that say; invest 10k today and make monthly contributions of 500, and in 5 years your investment fund will look like this 100,000-200,000. But the leading investors of the world day index funds. Big risk guys say small cap stocks.
I don't have a fancy job or any family money, I just want to be able to be able to say I don't have any issues with money by the time I'm 30 (8 years to go)
Thank you for taking the time to read this and help me.
