However far in you are to your career, it is never too early to start thinking about investing your money. There are so many benefits to investing your money, and if you choose your investments wisely, you may well find you have earnt yourself a tidy sum. Here are some tips for investments newbies:
Research all your options
It is important not to just choose the first investment option you see, but to do your research first. With the internet, you can really compare investment plans side by side and figure out what you need to put in vs what you could get out vs the risk. The Money Advice Service says that knowing yourself, your needs and goals and your appetite for risk is a good start, so you could start by filling in a money fact find. This will involve addressing questions such as,
- What is your monthly budget?
- What are your assets? (e.g. cash, property, savings, investments, pension, life insurance)
- What are your outgoings? (e.g. mortgage, credit cards, loans)
- Will your income remain a constant?
- What are your money goals?
- What is your attitude to risk?
- How much time would you like to spend managing your money?
With this in mind, you can then make savvy decisions with your money.
Learn the Technical Language
When you start reading up about investments, you’ll find that the wording can have you rubbing your head. If you’re unsure of a word or phrase, look up its meaning. You should start understanding the lingo as it will empower you to make smarter decisions. You should “make a habit of reading financial publications and websites. Sign up for newsletters from websites such as Fin24.com or Moneymatters.com.”
Ask for advice
There’s only so much reading that you can do before it is a good idea to ask someone for advice on your potential investment. Remember, investment opportunities can pass quickly, so don’t procrastinate, but try not to jump into something without speaking to someone first. This doesn’t have to be a financial advisor, but a friend, family member or colleague who could give you a word of advice or reassurance.
Don’t be put off
Some investments don’t pay off – that’s the risk involved when making an investment. Try and dust yourself down when this happens and don’t be put off trying a different investment avenue in the future. Perhaps, for example, your company shares didn’t work out, but there are stocks and shares ISAs you could invest in instead.
If you’re unsure or you don’t like the risk, start with a small amount of money (e.g. putting £5 a week into a stocks and shares ISA) and then build yourself up over time.