DO I need to have a lot of money before I can start investing?
This is a question which a lot of people ask. The simple answer is, you do not need to have a lot of money to start investing but there are certain things you need to consider before you begin.
Firstly, don’t leave yourself short in the event of an unexpected bill having to be paid. You should have a certain amount of money available in case something urgent crops up and you have to pay an unexpected bill for example. The last thing you want to do, when you’ve taken the leap into the world of investments, is having to cash in your investments to pay for the unexpected. So, have a pot of money available for such events.
If you have any short term debt – get it paid off if you possibly can. Credit cards, for example, come with high interest rates so it would be better for you to get rid of that debt before you consider investing.
Also, think about your goal. What is your investment goal? Why are you considering investing? Is it because you want to aim towards a financially healthy retirement? Always understand your ‘why’.
But, you do need to consider what you can afford. Be honest with yourself about your current financial position. As a beginner, don’t aim too high but if you start with manageable amounts you are more than likely to continue investing.
Do I need to have a lot of money before I can start investing?
In years gone by people would have thought that investments were just for the wealthy professional with lots of zeros on their salary – they are not. Anyone can invest but how you do it is up to you and your affordability.
Are you investing a lump sum or can you afford regular savings?
The benefit of regular savings is that it offers the chance to make fluctuations in the markets work for you. You may have heard this being coined as ‘pound cost averaging’ and the benefit is it can smooth out the highs and lows of the price of your investment. It’s like riding a wave – you could even end up catching a lovely long left as opposed to getting hammered in a pummelling barrel of water. If, however, you do have a lump sum to invest from a cash account, you can start investing with a smaller lump sum and then add to your investment when you build up your cash. But, and there is a but, if you invest in a single lump sum, and the markets drop, your investment could suffer from bad timing and you could be faced with a dip in your investments.
Your Worldwide Financial Adviser will discuss investment options with you if you do not have a lot of money. Our team of advisers consists of investment specialists and they will explore whether there are any tax breaks which will help you to build your investment faster. Your investment specialist will look into ISAs and SIPPs for example.
If you are considering investments please do get in touch with us by simply dropping an email to info@wwfp.net and one of our specialists will contact you back.