Money Content // Investment Advice for Beginners*

Today, there are more choices out there when it comes to investing your hard earned money than ever before. Those with a love for stocks, shares, Forex and bonds might clap their hands with glee, but if that is a sentence that gives you a vaguely sick feeling in your stomach or simply makes you start to glaze over, don’t feel bad, you are not alone.

The truth be told, plenty of people would struggle to tell their ISAs from their derivatives. But we all need at least a basic grounding in the different types of investments out there to ensure our money is working as hard for us as it possibly can.

Some people even look into buying shares as in a spend money to make money scheme. There are plenty of apps available to help you with this, and be sure to check out the fxcm review.

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Savings Versus Investments
In years gone by, everyone had a bank account and a savings account. Investment funds and the like were for city slickers or those with more money than they knew what to do with. At least, that was the common perception. The rise of the internet opened up the world of investments to far more everyday people, with more independent financial service providers like this website offering a broader range of products at the click of a mouse. At the same time, rock bottom interest rates meant that savings accounts were yielding negligible returns.

These combined to level out the playing field, and while there are still sound reasons to keep money in a savings account, more people than ever are also looking to put some funds into investments.

Start with an ISA
If you talk to a bank about savings accounts, the first thing you will be told is to open an ISA and take advantage of your tax free allowance – this currently stands at £20,000. What people don’t always realise is that there are investment ISAs as well as cash ISAs. These are managed investment accounts that you can take up from independent financial providers that have the same tax incentives. You are free to allocate anything up to the £20,000 total allowance across cash and investment ISAs as you wish.

Think Long Term
Investments come in various types, and the right choice depends on when you want to see a return. For beginners, it makes sense to think long-term, as these are generally the safer types of investment products that will be most likely to achieve steady growth over time. Government bonds, property and even precious metals are perfect examples. The chances are, by the time you retire, the state pension is not going to be sufficient to lead much of a lifestyle, so the sooner you start preparing, the better.

Spread the Risk
Nobody knows what tomorrow will bring. Some say that there is no safer investment than bricks and mortar, so if you have, for example, £200,000 to invest, you might think buying an investment property and letting it out is the best choice. The risks here are twofold. First, if you suddenly need money for some unforeseen emergency, you can’t simply sell the house in the space of ten minutes. The other is that you have put all your eggs in one basket – in the event of a property price crash, your entire investment fund will take the hit. A balanced portfolio will have a range of savings and investments and is the best way to protect yourself against whatever fate might throw your way.