Should I start investing?
We hear a lot about the benefits of investing and the need to increase your income through investments. However, this isn’t always an option for everyone and starting to invest can be a big decision and should be thought out.
Investing is a great way to build on your income as well as create financial independence. Cash in your bank account will be losing value without a great interest rate which is hard to come by due to inflation. With investing, your money will adapt with inflation and the value of your money is protected.
If you are ready to invest find out which type of investing suits your goals and situation the best.
When should I start investing?
Clear your debt first
If you have any amount of debt, this should be cleared as a top priority. Investing whilst you are in debt could take the focus away from repayments leaving the amount to increase with interest.
Have savings
Make sure you have a savings pot which can support you and any dependents before starting to invest. Investing can build on your income but you should not rely on this to build savings, you should already have a safe foundation first.
Experts recommend to have enough money saved to cover your outgoing for between 3-6 months.
Pay your pension
Don’t neglect your pension! To some it may seem like a long way off when you want to utilise all your money now but having a strong pension will be worth it in the long run. When you reach state pension age you will be given a very small amount from the government, starting monthly pension payments a month will boost your income when you are older and also mean you won’t have to scrape by when life becomes a bit tougher to do so.
Do you have the disposable income?
Make sure you remain in control. There are no risk-free investments so reflect on your risk appetite to determine if this is something you can do mentally as well as financially. Making sure your finances are healthy and you have this extra disposable income to use on investments is vital!
