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Investing is a scary thing, don’t get me wrong. It’s a world we are not introduced to early on in life, which is so annoying, because it’s now becoming vital for us. It’s a genuine means to make income passively (though I wouldn’t rely on using this money at the start of my investment journey), but in the long run, I know that this money is mine, tax-free and is earning compound interest in the background. (Scroll to the bottom to read about who I invest with)

So, how do you invest?

The reason I say this, is because a lot of platforms now want you to deposit a minimum amount of cash to ‘open’ your investment account. Some are as little as £1, but others ask for £500.

Do your research and find one that works for you.

You can do this option first, and that just means you need to know how much money you have to start and do the research accordingly.

For example, Vanguard is always being recommended, but you need a minimum of £500 to open an account with them. (Which is weird because when I opened it in Sept 2021, it still allowed £0 to open the account).

If you don’t have that kind of cash, there are other platforms such as Trading 212, your bank and Invest Engine, who can open your account with no initial amount.

The reason you open a Stocks and Shares ISA, is because the money you invest is tax-free, even the dividends. If you open a regular Stocks and Shares account then the first £500 of dividends is tax-free (8% - 40%), and if you sell any shares, they are liable for Capital Gains Tax (18-24%). There are other fees too, so just open the tax-advantage account.

This is self-explanatory, literally where it says ‘Add cash’ or ‘Deposit cash’ or if you’re real savvy, set up a direct debit, so each month they take money straight from your bank. Then you don’t have to remember.

🚨THIS IS DIFFERENT TO STEP 2🚨

Once the money is in the platform you need to tell the platform where to invest your money. If you don’t it just sits there like it’s in a really bad savings account that doesn’t earn any interest.

However, platforms such as Trading 212, do allow your uninvested cash to earn interest there, but that interest will be lower than designated savings accounts, and WAY lower than what you could be earning if you invested it. So, invest it!

In what? you may ask

Start off with large portfolios such as the S&P500 and FTSE100. These are large baskets that exist based on the top 500 or 100 companies. So if they perform well, then your money performs well. If you get more confident, branch it out and diversify based on what aligns with you. Some people really like tech, so they might invest in more tech companies. Others are more aligned to social and environmental benefits, so they invest in companies that are using investors money, that are good for the planet. There is probably a niche of business for everyone’s taste.

Investing is for long term goals. Think a career break in your 40s. Early retirement. Buying a house more than 5 years in the future. This is because the longer you leave your money in there, the more time it gets to experience the compound interest that comes with investing.

It might seem scary, and you might fear that you will lose your money, but the biggest way to lose money is to sell. There are such things as market crashes, but hear me out ‘If the top 500 and 100 companies collapse, surely we will be experiencing a global issue that means your won’t be thinking about your money’.

I used to do those steps above, and I tried them on Vanguard, Trading 212 and Invest Engine. All decent platforms, but I don’t have the energy to give time to researching portfolios to invest in. This meant I only invested in those two index funds for the last 4 years, and I didn’t think that was great diversity for me. So I changed.

I moved to a company who manages it for me. I send them my cash, and there are people there managing what my money does, and I all I had to do was tell them where I wanted my money invested, and they do the rest. They even automatically take the money out of my account. And the fees? The yearly amount is a little bit more than the Vanguard monthly fees. Trading212 and Invest Engine are both cheaper than what I use now, but I am paying for the convenience and peace of mind.

My money is invested in the top companies, and so many more global markets. It even has social and environmental aspects in my portfolio. And someone more skilled and interested in this subject, is being paid to handle this for me. So for that reasonably small yearly fee (around £6), I still get to invest, and keep my time for the things I find genuinely interesting. All of this, and knowing my money is growing for me in the background, is why I am really happy with the J.P Morgan - Personal Investment platform.

Please note if you click on some of these links and open an S&S ISA to invest, I will receive a form of compensation, but you will benefit too, whether it’s a free stock or gift cards😊

Hope this helps

Speak soon,

Rue

Adulting For Life