How can young people learn about investing? And how will Brexit affect the UK market?
19 July 2021
Question by Rita
I recently came across your blog and it has been a great introduction to learning about my personal finances. I was wondering if you could recommend any additional resources (websites, books, online help) for beginners and that are tailored to the UK market. I am in my early 20's and I'm looking to further my knowledge of money, and foster a greater relationship with it. In addition to that, I'd like to know your opinions on how the possible outcomes of Brexit will affect the market and potential personal finance investments.
Answered by Boring Money
Glad to hear that you've found Boring Money interesting and a useful intro into investing!
A great place to start
To get a feel for it all, you can do some initial reading using our Learning Path pages.
In particular, these ones may be useful;
Making Your First Investment - we've put together some key tips to get you started investing in the stock market.
Rebellious Renters - here's some quick ways for investors in their 20s and 30's to get ahead, and max out what they’re entitled to. It can be tough to juggle climbing aboard the career ladder, while also struggling with ever-higher rent, the rising cost of living and possibly student debt as well.
Wary Women - the reason why people tend to imagine a man when they are asked to imagine 'an investor', is because investing has traditionally been such a male-dominated scene. But this is slowly changing. Our Wary Women learning path helps women get a foot in the door by breaking down the jargon and laying out our tips.
Once you've done some initial reading and you've mastered the basics, you might like some longer reads.
Our money expert Catherine Morgan recently gave her book recommendations for a reader's 18 year old daughter.
Here's her list of book recommendations to help open up the personal finance world for young people;
"I’d recommend that you look at personal finance books but also non-financial books, as often the messages can be just as powerful in a non direct way.
Two of my favourite books are 'Rich Dad Poor Dad for Teens’ by Robert T. Kiyosaki and Jason Butler's 'Money Moments.’
Jason writes through stories and short chapters, which I think is always a positive. He covers some of the simple yet vital messages that I wish I had learnt in my 20s such as changing mindset, dealing with spontaneous spending, spending your way to happiness and avoiding financial shocks. A very balanced way of understanding true financial wellbeing. Robert writes about some of the important personal finance areas such as compound interest and thinking outside of the salary box! Compound interest is such a powerful thing to learn early on as it encourages early saving habits - small savings over a longer period of time.
Some other great ones to look at are ’The Millionaire Next Door’ by Thomas J Stanley and ‘Your Money or Your Life’ by Vicki Robin.
Denise Duffield-Thomas also writes around the subject of Money Mindset in her book ‘Get Rich Lucky Bitch’
This is an incredibly inspiring book, as young women have grown up with lots of different messages about money from friends, culture, society and relatives. This book has helped a lot of my female audience to engage with some of their own fears around money, which more often than not can be more important than the factual information.
I would also recommend 'How to Win Friends and Influence People’ by Dale Carnegie as this helps readers to think about how they deal with people and the importance of judgement and perception."
After all this book learning, you might want to get a little practical understanding.
To accompany your reading, you could open up a small online investment account. Actually seeing how your investment account works, is the best way to learn about investing. Even if you're not fully confident yet, you set up a little account from as little as £1 with Wealthify just to see how it works. Watching your little pot of money going up and down, while you read about why should really help to demystify it all.
If you find that you really catch the investing bug and you want to take out a Stocks & Shares ISA, our Best Buys page is a good resource to help you decide between platforms. We've rated and tested lots of different platforms so you shouldn't need to search for the pros and cons yourself. Plus you can also filter these platforms by their consumer rating, and read the consumer reviews left on these Best Buy pages, to see what other investors thought.
Getting into investing early is great and should really be encouraged. The longer your money is invested, the more time it has to weather the ups and downs of the markets. So try to ride this wave of enthusiasm you're feeling, and get stuck in!
Here’s our top 5 tips for new and curious investors like you;
Don't let anxiety about what to pick put you off.
Avoid the 'get-rich-quick' stuff like bitcoin.
Don't put all your bets on one horse, like the recent Monzo crowdfunding ‘opportunity’.
Don’t sell at the first sign of a wobble.
Pay in as much as you can once you're comfortable, as often as you can, and increase your monthly amount every time you get a pay rise.
You say that you'd like to know our opinions on 'how the possible outcomes of Brexit will affect the market and potential personal finance investments'.
Now this is the million pound question!
With all the political chopping and changing happening at the moment, and the number of industries which are seeing companies swiftly moving their operations and HQs out of London, it's unsurprisingly difficult to be certain of how this will affect the market. Will the vacuum created by this industrial shift mean that entrepreneurial British companies step in to fill the gap, sparking an uptick in the UK market?
Off the back of the 12.75% drop in the FTSE 100 during 2018, some potential new investors think that this is a good time to jump into the UK market. They're hoping that by investing now while the pound is weak, they'll see good returns on their money when the market improves. However other investors warn that while this may seem like a big dip, you can't be sure that we won't see some even bigger slumps in the pound after Article 50's deadline in March.
It's very difficult to know which camp is right. However if nothing else, it proves that it's always prudent to remember the most important rule of the thumb for investing - the longer you can leave your investments, the better. Investors who can be in it for the long haul are more likely to be able to weather the dips of the market
There's a lot of politically charged speculation out there, much of which changes from one day to the next. So we've mostly avoided the B-word at Boring Money over the last year or so, as nobody really knows with any certainty what the affects may be.
However in the final few months of the Brexit journey, as the government's March deadline looms, we have taken a look at the topic to see if there are any likely effects we can make our readers aware of.
Check out our article, How will Brexit affect investors?.
We asked four industry experts from Hargreaves Lansdown, Chase de Vere, Tilney & Seven Investment Management, for their Brexit wisdom.