Where should I invest my money?
I'm not sure where to put my money?
If this sounds like you then you're reading the right article. Let me first caveat this article my saving that I am not a professional investment advisor. I am simply someone who has worked in finance for a number of years and has noticed a few trends that may be beneficial to anyone who isn't sure how to handle their money. The following points should not be misconstrued as financial advice. They are simply the ramblings of my own thoughts.
How do I invest?
There comes a time in most sensible people's lives when they realise that they're going to have to start to take some responsibility in terms of their own finances. They may have saved up a reasonable pot, say a few thousand pounds, but they don't know what to do with it.
They've heard that property is a good investment but then realise that they probably don't have enough. They've heard that investing in the stock market is a good idea but then they've no idea what shares to buy. Many come to the conclusion that they should instead invest in funds or give their money over to a financial advisor to invest on their behalf.
Beware the advice that you pay for
As I've written in the past, I am not the biggest fan of financial advisors and fund managers. My argument is pretty simple: 80% of fund managers can't beat the market average! This means that there is a significant number of individuals paying for the services of an investment expert who cannot even bear the average. It makes you wonder what on earth they're paying for?
I would recommend that no one will have your best interest to heart any more than yourself. Only you have your financial interests truly aligned with you so only you should be making investment decisions for yourself.
But I'm not financially educated
Understandably you might be thinking that you don't have the knowledge to make smart investment decisions. You don't have the luxury of a finance background. To you I say two things: firstly, read up and educate yourself on all financial matters. Read books and learn the principles of investing. Secondly, invest in index funds. 80% of fund managers can't beat the market average...so be the market average and you'll beat 80% of fund managers without even understand your investments.
The beauty of investing in index funds
Index funds not only give you broad diversification across a whole market of stocks and shares, but they are also incredibly cheap as they don't require paying a fund manager to look after them.
Given a long enough time horizon the majority of stock markets grow. Ride the growth and your investments will grow without the need to pay for an investment expert.
Don't just sit on your savings and allow them to earn a pittance in interest. Get your money out there and working for you. Remember the multimillionaireroad way: earn->save->invest->reinvest the cash flow->repeat.