How to get started with investing

Being a novice investor, I want to share my knowledge on how to get started with investing using tips that I have picked up and learned over the last 7+ years. When I started investing, I was fortunate to get the education at work even though I did not understand everything 100% at the beginning. Over the last 7+ years I have also seen first hand how investing can help you on your financial journey in a positive way via this little thing called compound interest aka earning interest on interest which is a great phenomena in the investing world. If you are curious about how to get started with investing then check our my first post in this series on investing as a beginner.

For many years, I did not consider the type of investing I was doing with my company as ‘an investment’ purely because I tapped into it enough times and I only sacrificed 1% of my income every month. I always had this thinking that to be truly investing, you need to be putting at least a £1000 a month but that is where I was wrong. These days, you can invest with as little as £1 which makes investing for everyone, truly affordable and a great way to save for your future. In this post, being sharing how I got started with investing in the company I worked for, I will share tips on how to get started with investing as well as sharing how I do it every month.

Disclaimer: I am not a financial advisor, please seek financial advise for your particular financial situation

HOW TO GET STARTED WITH INVESTING

Firstly, we need to understand what type of investing I am talking about and then share tips on how anyone can start investing as well as sharing the tips that I follow monthly to support me on my journey to financial freedom. So the type of investing I am referring to in this post is investing in the stock market. Investing is defined as an act of allocation resources (in our case money) with the expectation of generating a profit or an income. The type of investing I am doing right now is one that I am hopefully will generate income to replace my ‘earned income’ (job) and will remain ‘passive‘.

When I started investing in the stock market, I started investing in the company that I worked for at that time. I knew little to nothing about investing but before I made any decisions (it was part of a bonus package at work), I checked with my parents who told me it was a good idea to invest in the company you worked in and as they say the rest is history. The tips I share in this post as those that helped me make a tonne of money in a space of 6 years and gave me the kick I needed to take investing more seriously than I previously did. So, here are a few tips on how to get started with investing.

1. Have a budget and decide on investing amount

Regular readers of my blog will know that on the first of every month, I share ‘budget in review‘ posts where I share how I did in my previous month with respect to my income vs my expenses. I always pride myself in being able to save 50% of my income every single month although these change depending on the month. I invest between £400-£500 a month into the stock market and I was able to figure this out via having a budget and figuring it out how much of the money I save I wanted to allocate towards investing. If you are curious about budgeting and want to learn more about it, I do monthly YouTube videos on my channel ‘Budget with A July Dreamer‘ where I share my personal budget with real numbers.

I am a great believer in the money mindset of, “pay yourself first” and regardless of the type of month I am having, I always pay myself first. For months where I have less than usual I strive to make more money to ensure I cover all my essential bills and this is an idea that I read in Rich Dad Poor Dad and absolutely love and agree with. Instead of paying everyone else first and scrabbling to save money, I always pay me first (via putting into my savings and investment accounts) and then make every effort to make extra money from my side hustles to cover bills that I won’t otherwise cover if I don’t get extra money. Having a budget has taught me how much I can afford to save and where in my budget I can pull money from to funnel into my investment portfolio.

2. Read up on investing

In order for you to get well versed on investing, you need to surround yourself with people who know what they are doing in terms of investing in the stock market and are good at investing. Another thing you need to make sure you do is educate yourself on investing by reading up on what it is, knowing what you want to invest in and reading up about that too. I have read books from Warren Buffet, John Bogle, Millionaire Teacher and many more because they have the knowledge that I need in order to make the right financial moves when it comes to investing money and money management in general. My recent read was Rich Dad Poor Dad which has been very insightful and also cemented some of the knowledge I already learned from others and continue to.

3. Choose investing firm or brokerage account

Whilst I can not say which is the best investment first ever, I will share the firms/brokerage accounts that I use to help me with my investments. The one thing I have learned from reading John Bogle (The Vanguard Group founder)’s books on investment is to make sure whatever investment firms or brokerage you use has the lowest fees ever. Because it is the fees that will be the world of difference between two savvy investors, I use a two investment firms, Vanguard and Barclays Smart Investor and a few investment apps like E’toro and Plum. Vanguard fees are lower than most investment firms, Barclays I like because I bank with them, easy to manage/navigate and the apps because one helps me save money and the other allows me more access to single stocks which I am interested in.

4. Invest monthly in Funds

For a lazy investor like me, I prefer to invest in mutual funds – pre-packaged investments which are considered ‘safer investments’ and often covers the ‘whole stock market’. There are many mutual funds out there that you can invest in and in my video below I share what I am currently investing in.

So, how I have shared how I got into investing, i.e. I invested in the company I worked for by sacrificing a percentage of my salary. I have learned a lot in that 7+ years and continue to invest in companies that I work for or believe in. How I invest is by using apps like Plum and E’Toro and investment firm like Vanguard and my bank Barclays. I hope this post was insightful and shared tips on how to get started with investing.