Before you start investing
Before you take the first step to start investing, there are a few rules of thumb to follow.
First, make sure you’ve got a savings buffer of around three to six months of your monthly outgoings stashed away. 📅 This way, if your boiler breaks or your car needs repairs, you won’t need to sell up your investments to cover the costs. A quick-access savings account – like our Simple Saver – can help you build a savings buffer. 💰
If you’re saving for a short-term goal – like a holiday – you might find our notice accounts useful. The longer the notice period, the higher the interest rate, but you’ll need to plan ahead to make sure your withdrawal is processed in time.
You should also prioritise clearing any debts that you might have. Pay off your credit card in full, and make sure you can do the same each month before you start putting money into investments.
Finally, start contributing to your pension pot. It’s estimated that 35% of people in Britain either don’t have a pension or don’t know that they have one* – meaning they don’t know how it’s invested.
You don’t want to get to retirement wishing that you’d paid in more when you were younger – and starting to save into your pension sooner rather than later gives you time to maximise your compound returns.
We’ve got a pension calculator tool to help our users understand how much they need to put into their pension each month to be comfortable when they retire. 👴
Ticked these off your list? Let’s get into investing. 📊
How to start investing
To start investing, you need to choose a provider – like us, Moneybox. Different providers will offer you different ways to invest, like through a Stocks & Shares ISA or General Investment Account.
As a rule of thumb, many investors choose to start with a Stocks & Shares ISA because it comes with tax-free gains. This is a huge advantage of ISAs, and it’ll help to maximise your long-term gains because taxes won’t eat into your profits.
You can invest up to £20,000 each tax year with a Stocks & Shares ISA, and you can buy a range of different assets including company shares, funds, commodities and ETFs. Before you start investing, get familiar with the different risk profiles and potential returns of the different things you want to invest in.
Investing with Moneybox
Start investing with Moneybox by opening a Stocks & Shares ISA today. You’ll be able to invest in our range of funds, which give you access to a variety of different areas including tech, healthcare, clean energy, the S&P 500, gold and much more.
If you hit your annual £20,000 ISA allowance, we also offer a General Investment Account (GIA). We cap deposits into our GIA at £85,000 a week.
Investing should be long term (min. 5 years). The value of your investments can go up and down, and you may get back less than you invest.
*finder.com pension statistics, 2022