Nuthin' but a P thang: How do I invest!?
Updated: Aug 22, 2020
WTF is this blog about!?
Nuthin' but a P thang is my new blog series where I cover everything you need to know about investing.
Investing can be super scary but it doesn't have to be.
Aside from your pension, a Stocks & Shares ISA is the best place to start investing and there are a few different types to choose from, which I explain in this blog with the help of some wardrobes!
I want to invest, where do I start!?
Not to sound like your mum, but if you're paying into a pension then you're already investing and this is probably the best investment you'll ever make (because of all the free cash money you're getting from your boss and the government!).
But I know you really want to know about the juicy stuff like stocks and shares - so I'll stop talking about pensions for 5 minutes and tell you about some more exciting investments instead!
Before you even think about investing, it's really important you get a few things straight first:
Pay off any high interest debt (I don't mean your student loan or mortgage)
Build an emergency fund
Define your #moneygoals
Check out my IGTV for more info on why it's crucial to complete these three steps before you start investing.
Ok, I've got those things straight - now can I start investing!?
Yes, you may.
When it comes to investing the best place to start (aside from your pension ofc 😉) is a Stocks & Shares ISA, which is essentially a legal way of avoiding tax #hallelujah (if you're not sure what a Stocks & Shares ISA is, you can download a free copy of A Millennial's Guide to ISAs by subscribing to my mailing list 💁).
So there's three routes you can go down here, each with their own pros and cons and, because I've just had a wardrobe delivered and it's on my mind, I'm going to compare your options to wardrobes (wish me luck):
1. DIY: you've designed your own wardrobe, gone to B&Q and bought the materials and built it yourself from scratch.
This requires a lot of research, time and effort to build. But it is (usually) super cheap because you're just paying for the materials (unless you're counting your own time because time is money y'all and I'm really f*@king expensive).
If you're new to investing, this option probably isn't for you. These types of ISAs are for people that really know what they're doing when it comes to investing because it requires a deep understanding of the different types of assets available and which ones are right for you. This option also requires a lot of upkeep, checking-in on your investments at least once a year to ensure your portfolio is still on track.
DIY providers include Cavendish Online and iWeb.
2. Flatpack: you choose from a selection of wardrobes and the parts are delivered for you to build yourself.
This is slightly more expensive because the wardrobe company are doing the difficult job of designing the wardrobe and supplying the parts. You still need to put it together but it's a hell of a lot easier than making the whole thing from scratch yourself!
With these types of ISAs you still have to choose your own investments, but they help you make the decision (i.e. they might show you a small list of funds to choose from based on your chosen risk level). You'll need to check-in on your investments occasionally to make sure your portfolio is still on track.
Flatpack providers include Vanguard and AJ Bell.
3. Ready made: you choose from a selection of wardrobes and it arrives pre-built.
This is the simplest option because all you need to do is decide (i) that you want a wardrobe (Iii) when you want it (iii) how much you're willing to pay for it. It's typically the most expensive option but it means you get the wardrobe you want built by someone (probably) a lot better at building it than you - so you save a heck load of time and effort.
This type of ISA is perfect for any investment newbies - you can set-up a Stocks & Shares ISA in a matter of minutes via an app and the provider will usually help you choose a risk level that's right for you. All you need to do is pay some money in and you're good to go! The best thing about the ready made option is that it's very much 'set and forget' i.e. the provider will manage your portfolio for you so you don't need to keep checking-in on it and moving your money around like you do with the other two options.
Ready made providers include Nutmeg* and Wealthsimple.
Investing is super easy, and you can do it from as little as £1. If you're a newbie, I would recommend going down the ready made route, investing via an app like Nutmeg*. You'll just have to complete a short questionnaire to help the app choose which risk level is right for you and then you can leave the rest to the experts!
Before you drive right in, make sure you've taken some time to complete the three steps I outlined in my IGTV to straighten out your finances.
If you're still a little confused, the main thing to remember is that the earlier you start investing, the better. So don't waste loads of time fretting about choosing the absolute best product available, just start somewhere - you can always move your money if you decide you want more or less control over your investments.
Keep your 👀 peeled for my next blog because I'll be giving away my top investing tips!
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*By using this link to open a Nutmeg ISA you won't have to pay any management fees for 6-months (I'll also get a small reward, so it's a win-win!) 💃.
Now for the serious part: my blogs are for educational purposes only; they do not constitute financial advice. Please consult with an independent financial advisor for advice on your specific circumstances.