How I started investing has been one of the most requested posts on this site, especially by people who follow me on social media sites. I think the interest comes from my dividend income posts, which are starting to prove that slow and steady might just win the race! I wrote my first post about investing way back in November 2015, when I first took the plunge into the world of investing. To be honest, I had been back and forth about it for a long time, years in fact. But I finally leap in and I’m so glad I did! It was very easy to open a stocks and shares ISA with Hargreaves Lansdown plus I find their platform easy to use. Not the cheapest around, but good enough for now.
One of the things I say the people when I receive messages about investing is that I wish I started sooner. Honestly, I wish I had been braver at the starting point and not left it another two years before starting my stocks and shares ISA. One of the most off putting things when you go onto any investment website is the fact that you might lose your money. And yes, it is never guaranteed. However, I would say to try not to let that put you off! There are lots of lower risk options to choose from so that you can ensure the safest way of investing as possible.
So, I started by reading lots of investing blogs and other materials around investing. One point I found here was that some of the more ‘formal’ blogs around investing use very complicated language – on purpose I think – so look for the ones that use more generalised language. Whenever I talk about my shares or investing, I try and talk about it how I would talk normally, without all the random jargon added in. I hope it comes across that way anyway! Some of the blogs I used to read have gone, but though I do like to read Weenie’s Quietly Saving blog.
I only ever bought one book about investing – Tim Hale’s Smarter Investing – and I would say that if you are serious about starting investing, then start with this book. It really does spell out the different investing strategies you can do plus a lot of use information that it easy to read and understand. reading and understanding will only help you on your investing journey, should you wish to start.
Another misconception I had to begin with is that you had to have a lot of money to invest. How wrong was I! Most of the accounts you can open have a £100 minimum amount to open the account and then you can do as little as £25 a month into a low cost fund. This might seem like it would be pointless to do but this would ad up over time. Include your dividends (though that would be small to begin with) and you’ve got the makings of your own dividend income stream!
Talking of dividends, I am very much a dividend investor. This means that I invest in stocks and funds that pay dividends. Most of them pay out twice a year, one of them pays out every quarter and then the funds pay out yearly. If you want to have a look at my up to date portfolio (just a list of everything I currently own!) then check out this post. The reason when I love dividend investing is that you are building a passive income stream. Yes, I keep an eye on the news and the businesses I am invested in, but it is largely passive in nature. I don’t have to travel or do anything to receive a dividend payment! Just invest in companies and funds that pay them 🙂 Eventually, I will [hopefully] have a big enough dividend income stream that will cover most of our monthly payments.
After taking those first initial steps into investing, I realised that I needed to change my original strategy. This also keeps changing and evolving; I have recently had a bit of a shuffle in my account to keep the balance how I want it. I think I am going to keep a much higher proportion of my holdings in funds rather than individual companies, as this is lower risk. Especially with the uncertainty around Brexit!
And that’s it, really! Lots of reading around the subject, researching the companies and funds I had seen mentioned in various places, and taking the plunge. And now, I’m on track to earn £1000 in dividends in my fourth year of investing. I cannot wait to see where it goes 🙂
Do you invest? Are you thinking about it? I’d love to hear from you!
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I’m also with Hargreaves Lansdown. I have a SIPP, LISA and S&S isa. I’m not investing right now as I’m a poor uni student but ince I’ve graduated I’ll be putting in a few 100 a month.
I want to start investing but I’m old dated and keep my money at home. I know this isn’t a good habit.