Don’t Know Where to Start with Investing? Start Here!

It’s fair to say I’m pretty passionate about the power of investing. In fact, once you start to pay yourself first, it’s the number one thing you should be doing to ensure your future financial freedom.   Not just saving…you should be investing!

But here’s the thing: so many women see investing as a scary thing – and you shouldn’t, because the evidence shows we’re often better at it than men. Women tend to be less tempted by “making a quick buck” and stay the course for the long haul, which is the strategy I recommend. Women tend to chop and change less frequently, doing extra trading on average 45% less than men – we steer a course through the twists and turns of the market’s tide with a steadier hand. And one more thing – have you ever heard of a female ‘rogue trader’? Thought not.

So women not only CAN invest, we can kick some serious butt at it. But how to get started?

What kind of investment?

Deciding on the type of investment you need depends on two main factors.

First, how ‘hands on’ do you want to be with investing? This will also in part be determined by how much spare time you have. Don’t commit yourself to learning every nuance of investing and the stock market if you already have a full schedule of commitments. And if going beyond the basics with investing isn’t your thing right now, then don’t feel guilty. There are still investment vehicles out there that will suit you.

Second, how much do you have to invest? You don’t have to have a lump sum to begin investing – there are plenty of options out there for regular investors who want to pay smaller amounts each month, but this can also dictate the kind of investment you can have.

Trackers make it easy

Tracker funds are usually cheap to run because they don’t require active management, either by you or by a fund manager, which also means they’re low on time commitment. Tracker funds track the performance of a share index, such as the FTSE 100 or S&P 500, by investing in shares of those specific companies, which keeps the fees low. A tracker fund can easily be opened online and if you haven’t maxed out your tax-free allowances, there are also tracker-style ISAs available, which are ideal for first-time investors. Lump sum investment options are available, as well as monthly deposits.

Investing in shares

If you’re keen to be a bit more hands-on with your investments and want to pick and choose the companies you invest in, then you might want to look at either direct investing (i.e. buying shares yourself).  The draw-back here is that your portfolio may not be as diverse as investing in a tracker fund or a unit trust.

Managed funds

Investment in a fund is where your money is pooled with other investors into a selection of shares that are picked and managed by a fund manager. These funds can be very specific or very diverse with anything from investing in a small tech company fund to the broad spectrum of investing in a worldwide stock market fund. Depending on the fund you should you can vary the level of risk and the fees of that fund.

You can buy shares yourself, either through a stockbroker or through one of the online share dealing accounts available through various banks and providers, a list of some is available here. Some of these offer the opportunity to practice with a ‘dummy’ portfolio, so you can try your hand at it before you commit. A direct share dealing account will require a lot more active management and there is more risk in this, so many investors wanting to move on from tracker funds will opt for investment fund products first as a stepping stone.

Check the fees and charges

If you’re not sure exactly what the impact of the fees and charges for your fund will be, use Candid Money’s calculator to work it out before making your selection. I’m all about keeping your charges as low as possible, because of course that impacts on your returns – and you want more of your returns for you.

Want to get even MORE investment savvy? Why not give me a call about coaching and accelerate your journey to financial freedom!