Invest where you spend

BUILDING personal wealth is easy as long as you follow your wallet.

That is the advice of wealth coach Jeremy Britton who believes Queenslanders should invest in the companies where they spend their dollars.

"I teach high school students that buying a Billabong share is as easy as buying a Billabong backpack," he said.

In his book Who's Taking Your Money? (and how to get some of it back!), which will be released next month, Mr Britton encourages consumers to "get rich every day by investing in everyday items".

"Yahoo looked like a good investment, but when was the last time you actually paid Yahoo? I send more money to the grocery store and the bank, so I buy shares in those and not in the internet advertisers," he said.

The finance expert says if a shop is good enough to buy products from, then it's usually good enough to buy shares in.

"I believe the average consumer is an intelligent person. They know enough to buy good-quality brands and they try to get the best value for their dollar. They will change brands if needed, and they will not continue to shop where they receive bad service," he said.

His first tip is to take an inventory of where your money is going to.

"When you buy a DVD player at Harvey Norman, some money stays with Harvey Norman, some goes back to the maker in China, but then the Chinese manufacturer has to send money back to BHP for the steel," he said.

The Sunshine Coast financial planner's second piece of advice was to find out where the money ends up.

"Over the past three to four years, DVD players have become cheaper, while steel has become more expensive. If you had invested into the DVD manufacturer, your shares would have gone down, but by investing into where the money ends up (the steel miner) your investment would have tripled," he said.

"Simply knowing that there is only one company behind AAMI, Shannons, Australian Pensioners Insurance, Vero, Tyndall, Guardian and Mariner may make you realise it is worth investing where you spend," he said.

"Many people will be absolutely amazed when they see 'who owns who' and how few companies seem to be everywhere at once."

Mr Britton said people should invest their spare dollars rather than leave their funds in transaction accounts, earning little or no interest.

"Imagine if you could save 10 per cent on your insurance by changing companies, and then use this saved money to buy shares in the insurance company," he said.

"Some banks will reduce your bank fees if you own shares in the company."

Financial expert Paul Clitheroe backs Mr Britton's advice as he had given it to his teenage son.

"I said to my son when he was about 13 (he's now 19), rather than leaving money in the Commonwealth Bank earning 5 per cent why don't you buy some Commonwealth Bank shares?" he said.

"He also bought some Coca-Cola shares and he bought some Coles Myer shares."

"It's a more interesting way of saying 'buy blue chip'.