As with the majority of people employed in the hospitality industry in 2020, I faced a reduction in my income due to the pandemic. Being a recent graduate with a small amount in savings, I feel extremely lucky to have been on furlough after managing to secure a part-time job in the summer. Due to the furlough scheme, I have been receiving 80% of my usual salary from December until now (March) and so, I developed quite a strict budget which included paying myself first, saving as much as I could and then living off of what was left. Luckily I still live with my parents, so I don’t have a ton of bills. Although, even with this strict budget I tended to have a small amount of money left over at the end of the month. Normally, this would go straight into my savings to top off what I put in on payday, but I found myself wanting to do more with it.
That’s when I started looking into investing. I already had some knowledge, as I follow some amazing social media accounts that have taught me a lot about beginning to invest and different types of investment accounts, but I was pretty much at square one. All I knew was that they were always reiterating that you don’t need a lot of money to start investing, ‘just £10 can get you started' so I thought, why not? I do have some premium bonds, which are a form of investment where you are entered into a monthly prize draw to win between £25 and £1 million, however, I wanted to try something new. After carrying out a bit of research, I decided on a Stocks and Shares ISA and specifically, a ‘Do-it-for-me’ platform, or robo-advisor. These platforms use the information you give them about your choice of risk level and investment goals to create an investment portfolio, so that you don’t have to do any of the hard work. As this was my first real experience with investing and my knowledge was quite limited, I thought it would be a good place to start. I was guided towards a few different options and narrowed it down to either Nutmeg or Wealthify. Nutmeg required a £500 initial deposit which I simply did not have space to open an account, so instead opted for Wealthify which only required a £10 deposit (that’s more like it). I feel safe when my money is in a regular savings account, so even though I know it could be better off somewhere else, I only wanted to invest the money I had spare. Also, with a link from Money Saving Expert, I didn’t have to pay a platform fee for the first year (a regular charge of 0.6% every year after that).
I researched the company (can you tell I like to do my research before committing to something?) and made my decision to open an ISA with them. The website was very easy to use and before you even open an account, it allows you to mess around with the figures (initial deposit, monthly deposit, risk level) to see how your money could perform, which I highly recommend if you’re new to investing too. On opening an account, you then take a quiz to ensure that the level of risk you have chosen is in fact appropriate for you. I decided to go with a medium level which Wealthify termed ‘confident’ and this focuses on making gains while minimising losses, as well as opting for the ethical theme – ‘a blend of environmentally and socially responsible investments’. The ethical theme tends to have lower returns than the original, but it was very important to me to invest in socially responsible organisations, so I stuck with that choice.
Once my initial deposit dropped into my account, I was able to see which stocks and shares I had invested in and how they perform each day. The app has definitely become addictive and I find myself checking it first thing in the morning instead of Twitter to see my total returns. I’ve always been a saver too so logging into my account and seeing my money has dropped in value does take a bit of getting used to and I have to remind myself that a Stocks and Shares ISA like this is for the long term. Truthfully, my money has yet to increase in value so it has definitely been an eye-opening experience so far.
While I have a lot more to learn about the best ways to invest my money, I’m glad I finally took the leap into investing. I tend to be quite (very) cautious when it comes to my finances and I love to save, so I feel like this has been a really good first step for me. As I educate myself and become more confident, I’d eventually like to split my money more evenly between regular savings and different investment opportunities to reach my financial goals and allow my money to work best for me.