Complete beginner looking for "ABC's" of investing

EasyToAssemble01

I've decided (somewhat, a bit late) that I should start learning how to make my money work smarter. With savings accounts offering very little returns, I've decided that I should look elsewhere for places to invest money. This includes learning how to invest, but I have no idea how and where to start.

As with all things, the internet is completely stuffed with all sorts of competing advice, so my main question is recommendations for places / sites / guides that will offer tried and tested advice, best practices, and strategies for a beginner. I've deliberately opted to invest safe and long-term purely for the purposes of a retirement fund, as it means I can concentrate on low-yield-but-safe options. I'm not looking to risk a lot on quick returns (once I gain experience, I may be able to make more informed gambles). Whilst the idea of quitting my job is very nice, the reality is I'd be much happier with laying the foundation for security in my later years, and to slowly build some knowledge and sound investments.

I'm looking to buy my first house early next year, so won't have the capital to make any large investments (eg. property). I was thinking about bullion or bonds and starting there. Friends of mine have suggested Property Investment Trusts, rare metals, bullion, and crypto. With the last one, I'm aware of the volatility of crypto, but am also prepared to make small long-term investments that I can afford to lose. Over a long period, it seems like a case of just watching the market cycles.

Any recommendations for first steps in investment -  as an absolute beginner - would be gratefully received.

kuratowski

Don't rush into anything.

Have a read of all the articles in this list before you start:

https://monevator.com/tag/investing-lessons/

Afterwards, for a retirement fund, open a SIPP, and invest in multi-asset index fund.

Such as:

https://www.legalandgeneral.com/investments/self-invested-personal-pension-sipp/ 

or

https://www.vanguardinvestor.co.uk/what-we-offer/personal-pension/personal-pension-account 

Keep learning and in a few years, once your pot is into 6 figures, only then maybe think about more advanced options.

El_Torro

EasyToAssemble01 said:

Friends of mine have suggested Property Investment Trusts, rare metals, bullion, and crypto. 

Oh dear. Some pretty risky options there with some large minefields to navigate. 

Better than all those options is to invest in well diversified stocks & shares funds. This is a tried and tested method that has helped many people over the decades. It's not a get rich quick scheme but as long as you invest correctly your money should be relatively secure (over the long term, bearing volatility in mind) and the returns should be a lot better than keeping all your money in cash.

What you invest in is important, the wrapper you use is also important. Assuming we're not talking about massive amounts of money a combination of pensions and Stocks & Shares ISAs should serve you well. 

The links that kuratowski has mentioned are a great start. Plus one vote from me for Monevator, which is a great website for showing newbies how to invest in the stock market sensibly (i.e. in passive tracker funds). 

Thrugelmir

Buy a copy of

Harriman's New Book of Investing Rules: The Do's and Don'ts of the World's Best Investors

It's a book you can pick up and put down. As each investor's contribution is concise and bitesize. Invaluable at a macro level in providing a broad and comprehensive perspective of investing.  Without the normal bias shown to one particular style or another. Exposes the downsides in them all. There's no right or wrong one. 

grumiofoundation

Do you have a lifetime ISA? And if so do you contribute the max. per year? 

EasyToAssemble01

grumiofoundation said:

Do you have a lifetime ISA? And if so do you contribute the max. per year? 

Unfortunately not. I'm just past the cutoff age for it, so can hopefully find something that will offer returns that are almost as good as a LISA. I know some campaign groups are asking for the cutoff age to be opened up to older savers.

EasyToAssemble01

El_Torro said:

EasyToAssemble01 said:

Friends of mine have suggested Property Investment Trusts, rare metals, bullion, and crypto. 

Better than all those options is to invest in well diversified stocks & shares funds. This is a tried and tested method that has helped many people over the decades. It's not a get rich quick scheme but as long as you invest correctly your money should be relatively secure (over the long term, bearing volatility in mind) and the returns should be a lot better than keeping all your money in cash.

What you invest in is important, the wrapper you use is also important. Assuming we're not talking about massive amounts of money a combination of pensions and Stocks & Shares ISAs should serve you well. 

The links that kuratowski has mentioned are a great start. Plus one vote from me for Monevator, which is a great website for showing newbies how to invest in the stock market sensibly (i.e. in passive tracker funds). 

Yes, these seem like solid places to start. Especially Funds, which will divvy up the investment (so I don't have to decide in who to buy shares with). I guess picking the right sector(s) / companies is something I'm nervous about at this stage, but something I plan to study a bit more.

I'm just curious as to why bullion is a bad idea, as I always thought it was good to have a little invested in gold/silver?

MX5huggy

EasyToAssemble01 said:

grumiofoundation said:

Do you have a lifetime ISA? And if so do you contribute the max. per year? 

Unfortunately not. I'm just past the cutoff age for it, so can hopefully find something that will offer returns that are almost as good as a LISA. I know some campaign groups are asking for the cutoff age to be opened up to older savers.

That’s a pension then. 

eskbanker

EasyToAssemble01 said:

I'm just curious as to why bullion is a bad idea, as I always thought it was good to have a little invested in gold/silver?

Nothing wrong with buying a little gold or silver but it's naturally better to focus on the 95% of your portfolio rather than the 5%....

bostonerimus

Do not listen to your friends, their recommendations are not very sensible and forget about market cycles, you will go through quite a few and should keep to your plan. The first step to successful investing is to look at your spending and become more frugal as the pound you don't spend is the best return you'll ever get.

1) Do a budget to see where you can save money. Mr. Micawber was right, always spend less that you earn.
2) Pay off any high interest debt... always pay credit cards in full.
3) Save six month's to a year's spending in the bank for emergencies.
4) Contribute to your workplace pension. If you have a choice of funds use low cost index trackers or multi-asset funds like Vanguard's VLSxxx, or HSBC, iShares etc equivalents. Choose an equity allocation appropriate for your age...see the link below for guidance on that.
5) Contribute to a S&S ISA and use the same type of funds as mentioned in 4)
6) Keep doing this every month without fail.

There are many personal finance books available, but here's a good place to start.
https://www.bogleheads.org/wiki/Investing_from_the_UK

bostonerimus

EasyToAssemble01 said:

El_Torro said:

EasyToAssemble01 said:

Friends of mine have suggested Property Investment Trusts, rare metals, bullion, and crypto. 

Better than all those options is to invest in well diversified stocks & shares funds. This is a tried and tested method that has helped many people over the decades. It's not a get rich quick scheme but as long as you invest correctly your money should be relatively secure (over the long term, bearing volatility in mind) and the returns should be a lot better than keeping all your money in cash.

What you invest in is important, the wrapper you use is also important. Assuming we're not talking about massive amounts of money a combination of pensions and Stocks & Shares ISAs should serve you well. 

The links that kuratowski has mentioned are a great start. Plus one vote from me for Monevator, which is a great website for showing newbies how to invest in the stock market sensibly (i.e. in passive tracker funds). 

Yes, these seem like solid places to start. Especially Funds, which will divvy up the investment (so I don't have to decide in who to buy shares with). I guess picking the right sector(s) / companies is something I'm nervous about at this stage, but something I plan to study a bit more.

I'm just curious as to why bullion is a bad idea, as I always thought it was good to have a little invested in gold/silver?

Don't worry about picking the right sectors, there is no "right" answer, but there are wrong, or at least ill advised, answers. As a beginner you should use a low cost (ie charges about 0.25% or less) multi-asset fund. All the big fund companies have them. They will give you a diverse portfolio of stocks, bonds etc in one neat package. Read up so you know what you are buying. Vanguard LifeStartegy range is an example as is BlackRock Consensus, HSBC Global Strategy, Fidelity Multi-asset.