Preparing to become a first-time investor

image
Print Friendly

It’s daunting to think about how you’ll support yourself when you retire.

However, forward planning and a few strategic savings and investments decisions could ensure that you’ll have a comfortable income. While many people are taught about the value of saving when they are young, there’s comparatively little financial education on how to invest.

Resultantly, making your first investment can seem overwhelming and risky. But it doesn’t have to be intimidating. By preparing your finances carefully and considering why you want to invest, becoming a first-time investor could be a joyous experience.

Why should you invest?

In general, the main reason people decide to invest is because they’d like to see a higher rate of return on their money than they do with a traditional savings account. By and large, saving is a safe way to invest your money but low interest rates mean than in 2013, your money probably isn’t growing as rapidly as you’d like. Investing is a riskier option, as there’s a higher likelihood that you’ll lose your money, but a good investment can deliver a significant profit.

There are many different ways to invest your money, and the type of investment you choose to make will vary depending on your investment goals. Buying property, for instance, is a long-term investment option. That’s because you expect the value of the property to increase over time so you may sell it for a profit in future. However, there is a risk involved here as it’s also possible that the property will decrease in value over time.

Stock market investments, on the other hand, are typically more risky and are often confined to people with a large amount of capital at their disposal. However, one way to make stock market investments is with an investment ISA, which is offered by some high street banks like Barclays and HSBC. In contrast to a Cash ISA – which acts like a normal savings account – an Investment ISA (or Stocks and Shares ISA) invests your money in a range of concerns, without you having to pay tax on any profits made.

Currently, the Investment ISA allowance is £11,520, £5760 of which can be in the form of cash. However, financial advisers usually recommend that you only invest in this kind of ISA if you are willing to let your money remain there for at least five years, to balance out any stock market dips that may occur.

Getting your finances in order

Before making your first investment, it’s important to make sure that your finances are in good shape. For example, consumer advice experts Which suggest you should clear all your debts before making an investment, as you may otherwise struggle to make your loan and credit card repayments. They also suggest that you protect your income against ill health that may leave you unable to work, and that you take out life insurance if you have dependants before you make an investment, to safeguard against market fluctuations.

Additionally, it’s important to remember that investments are not a replacement for savings. Always ensure that you have savings built up before making an investment so you won’t be left high and dry if things go wrong.

Disclaimer

 The contents of this article are for reference purposes only and do not constitute financial or legal advice. Independent financial or legal advice should be sought in relation to any specific matter. Articles are published by us without any knowledge or notice of the circumstances in which you or anyone else may use or rely on articles or any copy of the information, guidance or documents obtained from articles. We operate and publish articles without undertaking or accepting any duty of care or responsibility for articles or their contents, services or facilities. You undertake to rely on them entirely at your own risk, and without recourse to us. No assurance of the quality of articles is given or undertaken (whether as to accuracy, completeness, fitness for any purpose, conformance to any description or sample, or otherwise), or as to the timeliness of the publication.

 

The following two tabs change content below.
Hello ... I am the Creative Director and Website Editor for Silversurfers and manage all the social media too. I hope you find the features and articles we have shared with you of interest and relevance. Please feel free to comment below and share your thoughts with us ... I hope you enjoy Silversurfers and all that we offer ...

Latest posts by Silversurfers Editor (see all)

Not a member?

Join the silversurfers community today! It's free, easy to do, and is packed full of features and amazing offers!

Join the community!
Click here if you have forgotten your password

Community Terms & Conditions

Content standards

These content standards apply to any and all material which you contribute to our site (contributions), and to any interactive services associated with it.

You must comply with the spirit of the following standards as well as the letter. The standards apply to each part of any contribution as well as to its whole.

Contributions must:

be accurate (where they state facts); be genuinely held (where they state opinions); and comply with applicable law in the UK and in any country from which they are posted.

Contributions must not:

contain any material which is defamatory of any person; or contain any material which is obscene, offensive, hateful or inflammatory; or promote sexually explicit material; or promote violence; promote discrimination based on race, sex, religion, nationality, disability, sexual orientation or age; or infringe any copyright, database right or trade mark of any other person; or be likely to deceive any person; or be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence; or promote any illegal activity; or be threatening, abuse or invade another’s privacy, or cause annoyance, inconvenience or needless anxiety; or be likely to harass, upset, embarrass, alarm or annoy any other person; or be used to impersonate any person, or to misrepresent your identity or affiliation with any person; or give the impression that they emanate from us, if this is not the case; or advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.

Nurturing a safe environment

Our Silversurfers community is designed to foster friendships, based on trust, honesty, integrity and loyalty and is underpinned by these values.

We don't tolerate swearing, and reserve the right to remove any posts which we feel may offend others... let's keep it friendly!

More Finance

Going to university: a guide for parents and grandparents Oxford, England
Going away to university is an extremely exciting time in a young person’s life, but it’s...
Resources for DIY wills Person Hand Over Last Will And Testament Form
Creating a last will and testament is an important piece of admin many of us avoid dealing with...
Holiday insurance for disabled travellers Disability chair at awimming pool
You're planning a holiday and all you want to be thinking about is packing your sun cream and...
The best retirement budgeting tips on the web Writing retired and enjoying life on an application form concept
Retirement is a wonderful new chapter in life where your time is your own and you're free to...
Shopping Smart With Voucher Codes Shopping online
With the global recession seemingly never ending, it’s no surprise that consumers have had to...
Where to follow economics news Businessman Reading Latest News
Since the financial crisis of 2007-08, economics news has enjoyed a bit of an upturn in...
Easy tools to help you manage your spending Delicious food
Controlling your expenditure can be tricky, no matter how long you've been at it. Most people...
The best money blogs Www. Written In Search Bar
From stocks and shares to real estate or fluctuating interest rates, the world of finance is a...
Travel insurance for cancer patients 'Cancer' highlighted in green
If you or someone you love has just been diagnosed with cancer or is recovering after a round of...
Finding travel insurance for diabetics diabetes1
As with many on-going illnesses diabetes is not only something you need to deal with in your...
Comparing travel insurance policies: the best resources to use bigstock-Travel-Insurance-25334408
These days it’s easier than ever to get an travel insurance quote online – price comparisons...
Best Travel Insurance Guide for Over 50 & 65s bigstock-Travel-Insurance-Sign--48008171
The last thing you want to think about when you're planning your holiday is the fact that things...