Hi to all,
I would be grateful for some advice. I am a man of 28 with a wife and 3 kids. A year ago, we used to barely survive with my income as I used to pay for any buy the bare necessities and anything else, I would drink if I am honest! That doesn't happen any more as I no longer drink and it has given me a fresh outlook on life.
I have just started a new job and have become responsible with our money, hoping to build a future for my family and provide financial security and stability.
I do not have any real savings per say but I really want to begin investing. Obviously, I will have to start small but I would love some direction.
How much would I need to start investing who do I invest with and where should I begin?
Any feedback would be really appreciated as I really want things to happen for us.
Thank you in advance

Welcome to the Forum.

Where should you begin?

To keep it simple, at the beginning.

First, I would recommend that you set up a budget plan. Do it together with your wife. Make a balance sheet. List all your income on one side and all your expenses on the other side.

How much do you have left over at the end of each month?

Do you have any debt? (You can PM me if you don't wish to give more details in the Forum).

Do you have an emergency fund (Should cover six months of living expenses)? If you don't have one I suggest that you set-up one as well in addition to your investment account. Keep that separate from your checking account. I also recommend that you opt for automatic transfers into that account and always the same amount. A money market account will be a good choice as far as an emergency account is concerned. You will have two advanatges:

1. You won't spend the money on anything else.

2. It will teach you discipline. You will need that if you want to succeed with your investments.

Where do you start?

First I would recommend to open an on-lime brokerage account. You will have lower transaction costs but all the tools you need. Don't waste your time on a full-commisioned broker. You don't need that. Nobody does.

Now you have two choices:

Choice One:

You will learn on your own. This will cost you a lot of money as you will loose money as you learn but the expereince that you will get is priceless. If you do that I would recommend the following:

1. Research what strategies are available and which one will meet your investment goals. Keep your mind open to various strategies.

2. Start trading/investing on paper first. That way you can gather a limited degree of expereince but you won't loose your money.

3. Don't be discouraged from losses. It's part of the investment cycle. Every investor will loose from time to time. Don't let that knock you down, if it does get back up.

4. Don't ever get emotionally attached to your investments. You will fail if you do. This is very hard but essential. Have an exit stratgey in place before you enter your trade/investment and stick to it. No matter what happens, stick to it.

5. Don't listen to borkers. They are very likley to push products that will benefit them more then they will benefit you.

6. Don't pay attention to analysts. They are the worst-stock pickers in the industry.

7. Mutual fund managers are the worst pro-investors. Personally, I would ignore them.

8. Don't waste time and money on financial planners. Most of their advice is common sense and you will be able to accomplish what they will advice you on your own.

9. There is no right or wrong investment strategy just a good and bad one. How to define good and bad is up to you and your defintion of a succesful strategy.

I know this seems like a lot of hard hard work. The reason for that is simple:

It is hard work and not easy. It is very simple but not easy. The majority fail at it as they lack the knowledge, the rest enjoys financial freedom.

It will take time for you to learn but you can accomplish your goals. Take it one step at a time.


Choice Two:

You can get help from companies which offer a service for investors which guide them through the entire process and are there to help. This will cost you a fee. You can choose this approach and learn along the way.

Most likely you won't face the losses but you also cut back on the expereince that you will gather if you're on your own.

It is really up to your own personal preference.

Whatever you decide, I hope that you won't surrender to mutual funds. They were designed for middle-class investors to keep them in the middle-class. I absolutely dislike them but in the end it is a choice which you have.

It is never smart to play it safe, it is safe to play it smart. One small difference with a huge impact.

How muchdo you need?

Opinions differ. They differ a lot.

Out of personal expereince and the experience of investors I work with you need to put up at least 1,000 pounds. Most will disagree and scare you away with a bigger number and advice you to stick to a mutual fund.

Very bad advice in my opinion.

Once again, in the end it comes down to your personal preference and the choices you think are right for you.

I hope this will give you a few ideas. Feel free to PM with questions or additional info and you can always post your questions here.

The above are just a few pointers to consider and by all means no full list or recommendation on what services ot investment tools to choose.

Good luck to your investment career.