What would you do as 21 year old investor?

steampowered

The investment return on £800 is going to be minimal no matter what you do with it.

But, at 21, you do have time and energy. The best thing you can possibly do is to spend some time learning about investments, so that you are fully educated in how to make your money work for you when you have a bit more of it.

Looking into diversified multi-asset low cost funds is a great way to start.

eskbanker

grumiofoundation said:
Companies such as nutmeg, Wealthify, legal and general often offer cashback though sites such as Quidco or TopCashback or refer a fiend bonuses that can offer 5-10% boost to returns for your first 12 months or so.

Are these companies actively seeking troublemakers?

Gabby97 said:

I am trying to make a smart move for my future. Any suggestions?

An answer that'll perhaps be seen as boring but have you got a decent pension scheme sorted out yet?  Or even if that's longer term than you have in mind, ensure that you do your investing within a S&S ISA to benefit from tax advantages as the funds build up....

grumiofoundation

eskbanker said:

grumiofoundation said:
Companies such as nutmeg, Wealthify, legal and general often offer cashback though sites such as Quidco or TopCashback or refer a fiend bonuses that can offer 5-10% boost to returns for your first 12 months or so.

Are these companies actively seeking troublemakers?

Haha! It’s a new scheme they are trialling aimed at Jimmy Carr, jaguar drivers and British villains in American films. 

Anonymous101

If I could give my 21 year old self some simple advice it would be:

• Embrace the power of compounding
• Understand the cost of fees over your investing lifespan and learn that its next to impossible to beat the market consistently. A better use of time IMO is to earn more money and simply invest into low cost index trackers.

• Open your eyes to the possibility of being financially independent.

• Know that your capacity for work is huge throughout your 20's. You can work a full time job and have an evening side line. Its much easier to recover whilst you're young so don't be afraid to take small risks with the side lines.

• Look to minimise your biggest costs - Housing and cars. Buying a house and having friends rent rooms and driving a lower value car can be an extremely powerful way to set yourself up for financial independence later in life.

• Work toward saving 50% of your income into low cost index funds. If you can do this through your 20's you'll have done all the heavy lifting financially by the time you really notice. Your future self will thank you immensely.

 
Hindsight is a wonderful thing, I didn't do any of the above and probably wouldn't have listened to my future self.
You on the other hand seem like you're actively seeking out this advice so perhaps it won't be wasted on you. 

Sailtheworld

steampowered said:

The investment return on £800 is going to be minimal no matter what you do with it.

But, at 21, you do have time and energy. The best thing you can possibly do is to spend some time learning about investments, so that you are fully educated in how to make your money work for you when you have a bit more of it.

Looking into diversified multi-asset low cost funds is a great way to start.

It's only £800 but it's a start - it's a magnet for more money to come. I remember going into Barclays when I was in my early twenties and being collared by a 'financial advisor' who got me to opt out of SERPS in short order. I have no idea if that was a good move or not but seeing the rebates buying investments buying units in the Barclays Managed Fund (lol) in an account with my name on it really encouraged me to try and up my savings rate.

I don't know if it's the same for everyone but I've found that my savings rate has been far more important than investment returns. It's not until you've got a decent amount of capital that investment returns are more than contributions.

Ceme3000

Anonymous101 said:

If I could give my 21 year old self some simple advice it would be:

• Embrace the power of compounding

Second that! 
https://www.daveramsey.com/blog/how-teens-can-become-millionaires
I wish I knew this at 21.

Anonymous101

Ceme3000 said:

Anonymous101 said:

If I could give my 21 year old self some simple advice it would be:

• Embrace the power of compounding

Second that! 
https://www.daveramsey.com/blog/how-teens-can-become-millionaires
I wish I knew this at 21.

I think this picture is a great illustration of the power of compounding.


One thing people often forget with compounding is that it also works in reverse so avoiding debt is hugely important even when its only incurring a seemingly very low interest rate.

Gabby97

Anonymous101 said:

If I could give my 21 year old self some simple advice it would be:

• Embrace the power of compounding
• Understand the cost of fees over your investing lifespan and learn that its next to impossible to beat the market consistently. A better use of time IMO is to earn more money and simply invest into low cost index trackers.

• Open your eyes to the possibility of being financially independent.

• Know that your capacity for work is huge throughout your 20's. You can work a full time job and have an evening side line. Its much easier to recover whilst you're young so don't be afraid to take small risks with the side lines.

• Look to minimise your biggest costs - Housing and cars. Buying a house and having friends rent rooms and driving a lower value car can be an extremely powerful way to set yourself up for financial independence later in life.

• Work toward saving 50% of your income into low cost index funds. If you can do this through your 20's you'll have done all the heavy lifting financially by the time you really notice. Your future self will thank you immensely.

 
Hindsight is a wonderful thing, I didn't do any of the above and probably wouldn't have listened to my future self.
You on the other hand seem like you're actively seeking out this advice so perhaps it won't be wasted on you. 

That sounds so powerful, thank you so much for sharing that with me! It cant be easy, so I will try my best.

If you will remember anything else, I would be delighted to hear !

Cheers

Anonymous101

Gabby97 said:

Anonymous101 said:

If I could give my 21 year old self some simple advice it would be:

• Embrace the power of compounding
• Understand the cost of fees over your investing lifespan and learn that its next to impossible to beat the market consistently. A better use of time IMO is to earn more money and simply invest into low cost index trackers.

• Open your eyes to the possibility of being financially independent.

• Know that your capacity for work is huge throughout your 20's. You can work a full time job and have an evening side line. Its much easier to recover whilst you're young so don't be afraid to take small risks with the side lines.

• Look to minimise your biggest costs - Housing and cars. Buying a house and having friends rent rooms and driving a lower value car can be an extremely powerful way to set yourself up for financial independence later in life.

• Work toward saving 50% of your income into low cost index funds. If you can do this through your 20's you'll have done all the heavy lifting financially by the time you really notice. Your future self will thank you immensely.

 
Hindsight is a wonderful thing, I didn't do any of the above and probably wouldn't have listened to my future self.
You on the other hand seem like you're actively seeking out this advice so perhaps it won't be wasted on you. 

That sounds so powerful, thank you so much for sharing that with me! It cant be easy, so I will try my best.

If you will remember anything else, I would be delighted to hear !

Cheers

Do you read many blogs? Lots of great Financial independence and investing blogs around at the moment.

My favourite FIRE blog is The Escape Artist - https://theescapeartist.me/about/ , closley followed by Mr Money Moustache - https://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/
There are hundreds of good ones though so you don't need to get hung up on those two.

Oh investing....  Monevator is a very good UK based investment blog well worth some time.
https://monevator.com/category/investing/passive-investing-investing/

Nuggy96

Look into your pension, salary sacrifice saves on NI and tax and get employer contribution.
LISA if you want a 25% boost on 4k every tax year towards a house.