When it comes to personal finance, investing can be a more complex concept. But it is also one of the crucial aspects of wealth-building and financial independence.
If you are ready to start investing in 2024, you will need an overview to point you in the right direction. That is where we come in. On this page, you will find a brief guide to the first few steps of investing. Keep reading to learn more and implement your New Year's idea.
You can begin investing at any time. So, why now? The New Year is always a popular time to make significant changes.
Studies show that most people don’t always stick to their goals, but you don’t need to put as much effort into investments as you do running 5K every day or avoiding alcohol for a month.
Use this annual burst of inspiration to set up your investments and then leave them to blossom. However, before you start, read the investing guide below to see if this is the right step.
Here are some basic facets of UK investing to help you get more comfortable with the concepts.
Before you invest in stocks or any savings accounts, the first step to take is to define your investment goals. Do you want to make long-term investments? Do you want an income-generating portfolio? Answering these questions will help narrow down the options.
Next, you need to select your investment goals (also known as investment vehicles). These can be split into direct and indirect investments. Direct investments leave you with 100% control over assets, whereas indirect investments are usually managed by someone else.
Popular UK investment vehicles include pensions, unit trusts, EFTs, structured products, and stocks and shares ISAs.
How much do you want to invest? If a specific figure has not appeared in your mind, it is time to pause.
Alongside deciding on your investment vehicle, you must consider how much money you will invest. The best way to do this is to dedicate a percentage of your income to your investments. Experts recommend 15% for retirement investments, but it is ultimately up to you.
Risk tolerance, also known as risk appetite, is the level of investment risk you are willing to accept for the potential of a higher return. This is a critical factor in any portfolio, and you should assess how comfortable you are with volatility and risk.
If the idea of a market drop makes you nervous, you might want to pick a less volatile investment option. When in doubt, professional financial advisors can help you decide — and this brings us to the final tip.
Financial advisors can help you with building your savings and investing when you are not sure where to start. While it is entirely possible to start investing without professional assistance, it is a good option if you are unsure or want someone to provide you with personalised advice.
The New Year is an excellent time to reflect on your finances and strategize for the upcoming year. When it comes to investing, always take your time to consider the options and discuss your thoughts with a professional if unsure.
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