The 12 Tips Of Christmas – All 12 Tips Of Christmas Posts
Save Some Money – Referral links to receive money off
Merry Christmas and welcome to the eighth post of my 12 Tips Of Christmas series.
These are a series of posts that will be going out on the lead up to Christmas and the New Year to help guide you towards a better money mindset with an aim to give you a base knowledge of personal finance.
The next two posts will be a sort of quick two-parter all about starting your investment journey.
Investing in a good, low-cost, globally diversified portfolio is a recognisable and proven way of growing your money over the long-term over a 10+ year time period, minimum.
The power of compounding allows your interest to earn interest on your interest, on your interest, on your interest and so on. These small gains might not seem like much initially, but as your money grows over multi-decades the compounding effect will become ever greater and more noticeable.
Obviously this is all dependent on the investments themselves growing and that you’re genuinely investing the money and not trying to predict the next Amazon.
So how do you get started in all this? Well here is a look inside an investment account. It’s not scary of confusing. It looks incredibly similar to a regular bank account, but with a few more little additional bits you’ll want to keep an eye on.
Buying shares or fund units can seem a little daunting at first. Especially with the possibility that these can decrease in value – quite significantly if you’re picking individual shares.
But as long as you’re willing to hold for the long-term, have all your other finances in order (emergency fund, debt plan etc.) and aren’t looking for immediate Wolf Of Wallstreet styled returns, then just dipping your toe in the investment waters could be all you need to get the confidence that this isn’t the same as depositing money in your Bet365 account.
Many brokers will let you start off with very small amounts. I’ll just use Hargreaves Lansdown as an example just because it’s what I know, but there are many, many others out there so please look into those before deciding which is best for you.
Their minimum is £25. you set this up as a regular monthly investment, taken from your nominated account, and it’s deposited into your S&S ISA either in cash – for you to choose an investment at a later date – or directly into a fund or share.
£25 is what? A decent main meal out with a drink or two? Sometimes the hardest hurdle to overcome in investing is that first initial deposit. Starting small helps you navigate that hurdle. you can do all the research and weighing up of the best platform and investments all you want, but if you never get round to actually putting money into the market, it’ll never grow.
You can stop these regular monthly investments at any time too. So if you find even the £25 was too much, and don’t want to put in anymore, just change the regular amounts from ‘£25’ to ‘£0’. But I’m sure once you’ve deposited that initial amount you’ll realise it isn’t as scary as you initially thought – I know I did.
My contributions went from £25 in the first month, realised that daily market movements aren’t that bad, and increased it to £100 for the second month. I then tweaked the amount over the next 2-3 years with amounts I was comfortable with according to the financial position I was in at that time. Your monthly deposit is take on the 7th of each month, but is locked in from the 1st, so as long as you change or pause it before then it won’t be taken out.
So just give it a go. If you’re thinking of pulling the trigger on starting your investment journey, but are hesitant because of the unknown, maybe just start as small as £25? After all, you miss 100% of the chances you don’t take. But that’s the thing with investing, a long-term strategy is nothing to do with chance or gambling on the next ‘winner’, it’s all to do with having confidence in the long-term growth of the great companies of this world. I see it as an investment in the human race.
After all, if you’re globally diversified passive fund collapses and you lose all your money, I think we’ll have bigger things than money to worry about – on that note Happy Christmas 🎄🎅🏻🤶