EP71 – Investing for Beginners

We recently asked our listener to describe their relationship with money, and the result showed that a majority of us are spending. What was interesting was the sense of guilt those spenders had when they admitted their relationship with money, so on this episode, we talk about how we got into investment and how we made the transition from spending, saving and then investing.

Understand your motive

Investing has its difficulties so you have to understand your why? because you will need a reminder for when things get tough or don’t go ask planned.

For us, we want that “F U Money”, a term which refers to your ability to turn around to your boss and say “Peace out”. But we both understand this isn’t an easy feat, we understand that it takes time to see your initial investment grow to a substantial amount, but the goal is to have smart passive money that sees money enter your account when you are sleeping.

Get to know your numbers

It advisable to have an emergency “break glass” amount of money saved up as a general rule, regardless if you are investing or not. This emergency pot is to have about 3 to 6 months of your monthly living cost, to protect you against unforeseen circumstances.

Also have an understanding of how much money you are willing to invest, only invest an amount you are comfortable with losing.

Another good practice is knowing how much money you spend on a monthly basis like using apps, try and adopt systems like the money jar systems.

Image result for money jar system

Research

If you are reading to investing, make sure you do your homework. Fortunately, we live in a world full of information freely available to us at our disposal.
Understand that investing does come with a risk, be wary of those scheme that claim they can help you make money fast.

Look for seminar, talks or events around investment, use sites like Meetup and Eventbrite to find them. Network and try to connect with people, there is so much wealth you can gain from other just by the passing of information and resources.

Useful sites

Investodepia – Useful for finding out and understanding certain words or terminologies

Which – Can help you understand the different types of investment

Money Saver Expert – Very useful site for finding information on how to save, invest and beat the system

Babypips – Free resources that will teach the key aspects of Foreign Exchange (FOREX) trading

Investment vehicles

There are different approaches to investments and you have to figure out which one suits you best, are you happy with a long-term investment strategy or perhaps a short to medium term investment.

Below are some investment vehicles:-

  • ISA – Most high street banks offer this, they incentives you to save money by offering annual percentage return of 1-5
  • Stocks – Investing in a share of a publicly traded company
  • Bonds – A fixed income investment in which as an investor you loan money to an entity
  • Fund – As an investor, you will provide money to a particular cause sometimes a government fund or hedge fund.
  • Property Crowdshare – Invest in a property you don’t physically own

Note: It is important to diversify you investment, and invest in a number of different areas.

Useful Apps 

Moneybox -Round up your purchases to the nearest pound and invest the spare change

Yolt – Makes managing your money easier so you know where you’re at with your money.

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EP71 – Investing for beginners

 
 
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EP71 – Investing for beginners
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