Tips For First Time Investors
Investing for the first time may be intimidating, but it can help you reach your objectives faster if you are in it for the long run. Finding methods to make your money work harder now is especially crucial given current low interest rates. Inflation may erode the value of money in a cash savings account over time, making it less valuable in the future.
Here are Schofield's top tips to help you get started:
1. Start young - Investing early means that you have more time for your money to grow, even if your investments are small early on. The earlier you start investing, the better you are at making up for poorly timed purchases or returns later on in life. It also gives you an opportunity to take advantage of compounding. If you can squeeze in another year of saving, it can make a big difference.
2. Keep things simple - With a large number of investment options available to you, investing can seem complicated. But making your money grow for you does not have to be complex or expensive. Simple investments that are easy to understand can offer investors some of the best potential returns at a low cost.
3. Diversify - Having your eggs in multiple baskets is a good way to spread the risk of making bad investment decisions or losing out if one investment falls through. This can be done by choosing several different investments across different asset classes, sectors, and regions.
4. Keep costs down - When it comes to investing, you get what you don't pay for. Keeping costs down means that more of your money can go towards growing your savings. Make sure to shop around for the most cost-effective option before deciding on who to invest with; read up on all charges you need to consider when comparing products and always ask questions.
5. Have a plan - Making your money work harder for you requires some planning and it's important to be realistic about your goals and objectives when thinking about investing. For example, if you want to buy a home in the next few years, it may not make sense to put all of your savings into shares as there is a higher risk that prices will fall over the short term. Instead, you could consider making regular contributions into a cash savings account.
6. Be accountable - You can support yourself by setting targets for both your investments and achievements so far - whether it's related to saving a specific amount of money or achieving a certain return on your investments. Setting targets can help you stay motivated and focused to achieve what you want.
7. Think long term – No matter how tempting it might be to take short-term profits, you'll generally be better off being disciplined and sticking to a long-term plan to grow your money.
8. Seek advice - Investing can be daunting for first timers, which is where the assistance of a professional financial adviser comes in. Schofield's team of Chartered Financial Planners will assist you in spreading your money across a wide range of investments that are suitable to your particular needs and risk profile. They'll make sure you're getting the most out of all your tax benefits and deductions so that you can rest easy knowing your cash is working as hard as it should.
If you’re looking for independent financial advice for your investment needs, support with re-balancing your investments or quality-controlled investment, speak to one of our chartered financial planners today.
The value of an investment with Schofield Money Ltd is directly tied to funds selected, as a result, the value can fall as well as rise, you may get back less than originally invested.
This article is for information purposes only. It does not constitute any financial or investment advice. Please contact us if you wish to proceed with any course of action suggested in this article.