How to Start Investing
If you are new to the world of investing, just like I was not so long ago, you may be wondering, how do I start investing. When I started researching how to invest, I was overwhelmed by the number of different companies offering investments, and I really didn’t have a clue what was right for me. In this post, I will try and explain how you can get started investing with whatever money you have on hand. Firstly, make sure you have read my post about budgeting, so you can work out how much you can afford to invest.
How to Invest with Robo Advisors
A robo advisor is a great way to start investing your money and putting it to work. A robo advisor is basically a trading robot run by an investment company, which makes decisions on your behalf, they use complex algorithms to make these choices, and so far, I am having great success with them. How do I start investing with a robo advisor though?
There are a number of different companies who offer robo advisor investing services, the one I am currently using is Wealthify (if you sign up with my link, you get discount on the fees). Typically, fees for robo advisor investment companies are a good bit lower than traditional investment companies, due to the lower over heads, and lower staffing costs, which make them a good first investment. My Wealthify account has gained over 15% in the past 6 months!
How to Invest in a Workplace Pension
In the UK, employers now must provide a workplace pension, it is the law to do so, no matter what size of business. A percentage of your pay is put into your workplace pension automatically each month, and the employer and government will usually pay some in too. So, if you are wondering how to invest right away, then you can get a workplace pension setup, and you don’t need to do anything at all, just go to work and pay into it.
You can also get tax relief on this option, so it is worth even putting a small percentage of your pay into each month.
You may not see this as investing, but, after all, it is getting a return on your money, and the pension company will be investing it to get that return.
Find more out about workplace pensions here.
Low Initial Investment Mutual Funds
Mutual funds are investment securities, that allow you to invest in a portfolio with a range of stocks and bonds in it. Many mutual fund companies have a £250 minimum investment, but if you dig around, you may find something lower. I have yet to invest in a mutual fund myself, but I will do in the near future. I will make a post about how to invest in mutual funds when I do it, and what fund I choose when I made the investment.
Invest in Gold and Silver
You can start buying gold and silver coins or bullion for long term holding, I am a big fan of this, as I see it as a sort of protection against a stock market or economic collapse. At the time of writing this, you can pick up a 1oz Silver Coin for around £22, you can even look on eBay and see if there are any going cheaper. Gold coins are more expensive, so depending on your budget, you may want to stick with silver for now. Another advantage of Gold and Silver coins is that you can cash them in basically right away, so if you find you are really broke, no emergency fund money left, you can cash in some bullion.
Peer to Peer Lending
Peer to peer lending is another way you can put your money to work. With an average return of around 6.6% per year, it beats inflation, and also has a cheap initial investment, the company I have signed up with is called Funding Circle, I deposited £100 into my account, and in nearly 2 weeks, have returned 0.35%, before fees and tax., hopefully it continues like this.
I hope this article provided some insight on how you can get started in the world of investing, there are many more options, but I have just covered some basic, low buy in options in this post, there will be more to follow. So, now you should know how to invest your money and get some return!