Saturday, 28 May 2011

Beginning Investing

Investing has been my hot search topic on Google this week and I have been doing lots of reading up on Stocks and Shares ISA's, Tracker Funds, Investment Trust, Unit Trust and everything related. I have had a Share builder account with the Halifax for a few years but because of debt wasn't able to add to it. I haven't found a better share dealer so will stick with the Halifax, they only charge £1.50 commission for each purchase and I also have to pay government Stamp Duty of 0.5%.
I have a small amount of shares in a single company but am planning to switch to a FTSE All Shares Tracker and set up a monthly deposit that I can set and forget. I only have one friend who is investing and he has only invested in a single tracker and that was through a financial adviser so I don't have anyone around me with any real knowledge on the subject.
So far I not impressed with the online sites about investing - if your an absolute beginner with no family contact or history ever in the world of investing - all the information in the world about what funds to buy and what cost to avoid are pointless if you don't know how and where to buy shares, unit trusts etc. But all is not lost; Motley Fool have some great investment advise in articles and also their Discussion Board, with all the what, how and where questions that most sites just don't answer. Too many sites tell you what you should do but not how to do it.

"Yes you should invest"
- great but unless you know how to go about it you are never going to invest are you!

Even now I am still not 100% sure on all the abbreviations used to name shares to understand what the share entails. I should go to the library and get one of those books out that explain the financial pages of the newspapers. They should have the break down on the abbreviations used.
Investing is for my long term goal which I should have started decades ago (well I sort of did then stopped a few times over the years) but now it the time to be very serious about it. I am only looking to put in £50 -£100 a month at this time but will increase this once I have sorted out my short and mid term goals.
Are you investing? Did you find it easy to start out?

Monday, 16 May 2011

May's Mid Month Update

My Emergency Fund is now fully funded, I know, I have done Dave Ramsey's steps in the wrong order but am now on to Baby Step three having completed the first two. Gosh I am so happy to get to this place in my finances. Not sure if I will be able to totally complete one of the goals I hope to achieve this month, that being putting aside £1k to pay towards my taxes. This amount I have to lowered to £800 which isn't to much of a problem as I have until the end of July to pay my next tax bill.
A few expenses have popped up so far this month which I needed to pay, like having to replace my ipod ear phones after dropping them into my coffee last Saturday week. Not a great day that one.
So far I haven't spent very much at all this month which I am happy about but I did order a book online which is the first of a series of seven books and I am really liking the first book!
Another book I purchased this month is 'I Will Teach You To Be Rich' by Ramit Sethi (UK edition) which I am finding very good reading. This is written as a six week programme and each chapter ends with action steps for each week. I have been following along with some of the recommendations, one being to check your credit rating which I did and my rating was 999. However some of the information from some banks was over a month old and it didn't show that I had paid off my Flexiloan. So I am very happy with that rate.
Other things that Ramit suggested were change your bank for better rates (did that last month) and automating monthly payments to avoid bank changes. He doesn't like to use the word 'budget' and instead calls it a 'conscious spending plan'.
All in all a great book if your starting out in your financial life - good basic steps to building your future, with not only good ideas but practical steps for you to do! I am up to chapter six and it deals with investing - that's something I had been planning to do next year but Ramit says start today. We will see.
How are your goals for May coming along? I'd love to hear from you......

Thursday, 5 May 2011

Sorting out my new financial landscape....

May has been the start of my saving plan, last month after fifteen years, I changed banks and have opened a regular saving plan with my new bank which allows me to save up to £300 a month at 8% for twelve months only. I plan to start up an e-ISA account (if your in the USA think Roth IRA or 401k sort of) once I have fully funded my emergency fund of £1k.
Where to put my emergency fund has been a problem as I want to get some interest from the account if possible and it needs to be an account I can have easy access too should I need it.
After looking at some comparison web sites I have decided on a Santander online account as it offers a half decent interest rate. Okay it's not every ones favorite bank but as it is online I am hoping to avoid as much contact as possible with the physical bank and hope the cyber side of Santander is better to deal with.
In my online Santander saving account I plan to save my emergency fund and also my income tax payments so this account will probably be holding a running balance of about £3k.
Once that is done I will open an e-ISA account, this will be for my (Dave Ramsey) baby step 3 ie. saving up 3-6 months of expenses. I plan to save a further £4k in this account.
Finally my regular saving account is to build up a deposit for a house (or what ever I decide to do with my section once I make up my mind). The accounts high interest is only for a year and I will not have saved enough so will have to go looking of another account to put the balance in.
So the plan is so far:

  • online saving account for (baby step 1.) Emergency Fund

  • e-ISA account (baby step 2.) Saving up 3-6 months expenses

  • regular saving account Saving up deposit for building plans
All of my plans so far just cover my financial plan for this current year and don't include any investing I would like to do in the future. Next year I would like to open an investment account, fund a second ISA account and also look at possibly opening a fixed term saving accounts. What do you think? Am I wrong and if so why?

Sunday, 1 May 2011

Journey or Destination?

Saving is the journey to a destination or it it?

This is how I have always considered saving to be, I would have a goal or destination and then I would put aside money weekly, monthly etc until I had arrived at the goal amount. Always short term goals - usually saving for a trip or the latest gadget but there was a start and an end. I always had part time jobs when I was growing up - I was from a family of five kids and as a solo parent my Mum couldn't afford to give us pocket money. I paid for all my school stationary and school trips from aged about 12 years old onward. After leaving school at aged 16, I went straight into work and paid board to my Mum and was responsible for all my own finances from then on.

Is the journey about debt and not credit?

I got my first cheque account at aged 16 years but I didn't really do much in the way of saving at all. When did I get my first credit card, I really can't remember, I guess it didn't mean that much to open a credit card account. But I had one once I had started travelling around the world and good thing too as I had a couple of emergency's in my travels. But the bills were from then on always there waiting when I got back home. I would load my credit card before a trip, the idea being that the credit on the card was for emergency's but I always ended up spending my emergency money too.
From then on my 'saving' were going to pay off my credit cards and then my consolidation loans and then both my credit cards and consolidation loans. I had a destination or goal, the balance on my card and the journey to pay it off. Lots of journeys for lots of different accounts.

So where does the journey lead too, what is the destination?

Having just cleared all my debt I have just arrived (again) and it's a strange new world. Suddenly I have money in my current account with no where for it to go. Oh don't get me wrong I have a plan, a budget and goals but now I need to find places to put that money. I no longer have multiple credit card accounts to put my money in so there for I need to start looking for saving accounts with all the care I put into finding the best credit card deal.

The journey is over and now I must adjust to living in my new world, to learn the new customs and traditions that are practiced here. Already I am trying to fit in by opening a regular saving account but I know there is more to do and this week, for the first time in along time, there will be a credit balance left over after all my monthly expense have been taken out of my pay cheque.

I have ear marked this to be put towards my emergency fund but will need a new saving account to put this in as the regular saving account I have doesn't allow withdraws for the first twelve month. Should I have a saving account for only my emergency fund and a second saving account for other savings or just one account and save everything together?

I'm new here and am looking for advice!