8 months ago I took the plunge and decided I was going to invest. I wasn’t debt free yet but it was something I wanted to do and I just thought to myself – go for it. When I first started, I had no clue about investing. I knew it had something to do with shares but that was it. It is 8 months later and I thought I’d share the 5 things I have learnt about investing so far!
You can start small
When I first thought about investing, I assumed you need £1,000s and the people at work that invested said I would need at least £100s to start. They were wrong. You can start from £25! Yep, you read that right, I started investing with £25 a month. This is with Hargreaves Lansdown. For monthly investing, you can start anywhere from £25 a month. You might think that’s nothing but it adds up, I now have £200 invested. It is far from the £1,000s I thought I needed to start.
Now I am a bit more confident with investing, I have upped my amounts to £50 a month into two separate funds (I will tell you next what these are). If I was to start investing now at £25pm for 42 years (till I am 65), with a 4.4% interest rate (from the Aviva investment site) then by the time I am 65 this could grow to £30,800. What could you do with that money?
Funds were one of the first thing I invested in. They are a collection of investments in several different companies. This helps diversify your portfolio as your investing in several different companies in several different industries. There is risk with them still. However, in my opinion they are lower risk than investing in just one set of shares. Obviously, you can invest in shares but as I was starting out investing I decided to go with funds to lower the risk.
Don’t worry when your investment goes down
One thing that I use to worry about was when my investment would go down in value. When Covid-19 came and all my investments dropped, I thought what have I done investing. I thought I’d made the worst decision but there are gonna be times like this on your investment journey. I was reassured that the market will come back eventually and it has. It has been slowly rising for the last month. Also, if you are looking at long term investing and dividend investing then the fluctuations really don’t matter as much. I want to invest in order to build up a dividend income.
Always look at the fees involved with buying units in funds or buying shares. I use Hargreaves Lansdown and they have a tab when you look at the shares that will show you if there are any charges.
Just start. I wish I had told myself this years ago, if you are not certain start with £25 a month if you have it. Thats the equivalent of a Dominos for us so I thought as much as I love Pizza, I can have it once less so I can invest. Plus, when you get dividends (if you don’t reinvest them), you could spend them on pizza and you’ll still have your investment too!
If you are thinking that there is no room in the budget for investing why not look at my side hustling post here to make some extra money to invest!