Tim Wilson is getting a Money Makeover from our panel of 3 advisers. He wants to know where to invest the money from some shares he sold. He enjoys the good life but wants to know how to save better.18th February 2013, THE  AGE, Picture by Mal Fairclough

Goals … Tim Wilson hasn't really looked at investing. Photo: Mal Fairclough

AT THE age of 24, Tim Wilson is three years into his marketing career. So far he has saved $8000, but he wants to build some capital and eventually buy a property.

Trouble is, he confesses to liking the good life. ''I like going to restaurants, seeing new bands and buying anything with new technology,'' he says.

Wilson rents with a flatmate, and after paying his bills says he puts $800 a month away into an online savings account earning 4.65 per cent. Even so he says, ''I've never really looked at investing. To be honest I've never really even tried hard to save - it hasn't been a major concern for me.''

Wilson's long-term goal is to buy a property. ''However, I understand this is going to be some time away and am really now just looking to build capital.'' Without having to sacrifice too much lifestyle.

Apart from his savings account, Wilson also has $6500 after recently selling some shares he picked up from a company share-purchase scheme with his previous employer.

Wilson is torn between just adding it to his savings - ''but this seems a bit lazy'' - or re-investing this in the sharemarket.

If it's the sharemarket, where?

''My internet research suggests that a good place to start is my investing in an exchange-traded fund [ETF]. I'm looking at ILC.AX [iShares tracking the top 20 stocks], which seems to be fairly safe and has had a reasonable return. Another option was buying a 'Share Pack' through Commsec, once again safe, and I save quite a bit on brokerage.''

What should Wilson do with the $6500 - apart from spend it - to help meet his long-term goal of buying a property?

PAUL MORAN

Moran Howlett Financial Planning

Exchange-traded funds are a great way to access the sharemarket without trying to pick specific shares, and they are becoming very popular. The ETF you have mentioned is also one of my favourites, but I think you might consider an equivalent managed fund instead. ETFs are bought like shares and you pay brokerage each time you buy. With small purchases this becomes a very high entry cost and is not appropriate for a regular savings plan. An index-managed fund allows you to make regular direct-credit contributions for smaller amounts ($800 a month) without cost, and provides access to the same core investment. The lower cost and additional flexibility makes this a better option to me.

Remember the time frame for future investments becomes shorter and shorter as you near your purchase goal. For this reason, don't forget to adjust you strategy as you get within two to three years of needing the money. Stop re-investing and start making contributions to a savings account, and even start to redeem the units progressively. What you don't want is a fall in the sharemarket just before you are about to buy.

SUZANNE HADDAN

BFG Financial Services

As your long-term goal is to buy a home, you should consider depositing some of your savings into a first-home saver account.

You would receive a 17 per cent government contribution on the first $6000 deposited each year. This equates to a maximum $1020 of extra savings tax-free from the government. Also the interest earned is taxed at 15 per cent, which is at least half the tax you're paying on your interest.

However, like most good things there are some negatives to consider. You must deposit at least $1000 in four separate financial years. And the funds can only be used to buy or build your first home to live in. If you decide to buy or build before meeting the minimum four years, the funds will not be immediately available but can be applied to the mortgage once the minimum four years elapse.

The restrictions on withdrawal may help you stick to a more disciplined budget, but you should also ensure that you retain some savings in high-yield accounts for emergencies.

MIKE INGHAM

Obelisk Advisors

Most of us like the good life, but having the discipline to save part of your income and invest it wisely should help you grow your wealth and achieve your long-term goal.

Fortunately you have already developed a healthy savings habit by putting $800 a month into an online saving account. But it is important that you achieve a better investment return than the 4.65 per cent interest paid by your savings account.

Despite the global financial crisis, the Australian sharemarket returned 8.5 per cent annually (income and capital growth) over the 10 years to November 2012. This compares with a return of 5 per cent for cash. Australian shares are at present yielding about 4.7 per cent, or an even better 6.2 per cent when the value of franking credits is taken into account.

I would invest the majority of your $8000 cash, together with the $6500 you recently received from the sale of company shares, in an Australian share ETF.

I favour broad-based ETFs that track the ASX 200 or ASX 300. Every few months you could top up your initial investment with your new savings. Over the long term you might diversify by also investing in global shares and listed property.