Preparing to become a first-time investor
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.
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.
Latest posts by Silversurfer's Editor (see all)
- Join David and Helene in an adventure around the world - August 18, 2018
- Looking for volunteers for Make-a-Wish - August 17, 2018
- Stair Lifts versus Home Elevators - August 17, 2018
- Autumn must-haves - August 16, 2018
- Tafika – nine years on! - August 15, 2018
Leave a Comment!
Community Terms & Conditions
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.
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!