If you’re anything like me, you probably thought or maybe still think investing is for someone else, someone who doesn’t look like you, dress like you, think like you, maybe they’re young, they call themselves a trader, they analyse the markets and close the deal...........Well I’m here to tell you that investing can be as mundane as brushing your teeth. It’s not complicated. You don’t need to study the ‘markets’, you don’t need to start with a lump sum of £15,000.
This is how I invest – On the 1st of every month, a direct debit of £200 gets taken from my bank account and transferred into my stocks & shares isa account. That’s it.
With the rise of the ‘robo’ funds adviser, every tom, dick and harry can get involved! Investing is no longer just for the wealthy.
Why? Because robo advisers are automated versions of the traditional fund manager. What’s a fund manager? When a group of people or investors, pool their money together, this pot of money is called a ‘fund’. A fund manager is employed to grow this fund by buying and selling assets or stocks.
However, because a fund manager is an ‘employee’ they must get paid a salary. And this salary is paid for by the investors cash.......long story short, this way of investing is very expensive compared to the robo adviser who doesn’t need to be paid a salary to buy a Lamborghini or go on expensive holidays.
In the UK, you can open a robo adviser or wealth management account with MoneyFarm, link Use my promotion code MF130070 to get £5,000 managed free of charge for one year!
Scalable Capital (link) and a host more...
I personally invest through MoneyFarm, I can’t say if they are still the cheapest but at the time of my account opening in 2017, they were the cheapest provider out of all the robo advisers.
How do robo advisers work? As part of the account opening, you complete a questionnaire to measure your appetite for risk, since the value of your investment can go up – you make money, or down – you lose money, the robo adviser will invest accordingly.
However, the number 1 investing rule........(alongside keeping your investment costs down, having minimum 3-6 month worth of living expenses saved in cash)
Investing is a long term practice. This means 10 years +. So whether your investment values go up or down shouldn’t concern you, the aim is for passive long-term growth of your money.