What can I do with my money to make money?

11 July 2018

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Question by Beth

I presume you probably get a lot of these emails from hopeful entrepreneurs attempting to make money. However, I also concluded that it was worth a shot! - I have read a lot of your content online about investing money and I have seen you on the BBC before. I was hoping that you'd potentially share some words of wisdom with me. I often find that my monthly salary is spent on things I don't need or just saved up; without accumulating much. So I guess my question is.. what do I do with my money to make money? Of course I am not expecting you to tell me where and when to invest but simply what to read, and I guess I really would like to know how you became an expert, where did you start? I feel like investment is something so big I can barely even touch it, and I would greatly appreciate any words of advice you could share with me. Thanks and I hope to hear from you soon. Kind Regards, Beth

Answered by Holly Mackay

Hi Beth,

I think the mental hurdle is to get over the feeling that’s it’s ‘too big’ and you can't possibly do anything, because you’ll get it wrong.

I started by buying individual shares & derivatives, and it was jumping in at the deep end. I didn’t know what I was doing. Shudder!

The first thing is to mentally commit to setting up a direct debit into a savings account – or a Stocks & Shares ISA – to come out every payday. So you can’t spend it, as it has gone by the time you get to it! Work out how much this could be. Again, don’t obsess about the numbers or worry if they seem small. Just make 2019 the year you start. You can open a Stocks & Shares ISA from £25 a month direct debit with some investment platforms.

I suggest you maybe just start with a Vanguard Stocks & Shares ISA. The monthly minimums are higher than some but their platform is low-cost. You can pick a LifeStrategy fund which is low-cost and simple – it’s a mixed bag of investments from all over the world which is blended for you. I'm guessing from your note that you’re young and it sounds like this is long-term savings – if it’s for 5-10 years+ then consider the 80% equity or 100% equity version. Don’t automatically be afraid of investment risk, but do make sure you are in it for the long-term.

If you fancy a little more choice, then maybe look at AJ Bell YouInvest as the ‘shop’ or platform. You could have some of the low-cost Vanguard LifeStrategy fund as a foundation, and spice it up with a few ‘active’ funds which are run by managers, to try and beat the average or a market index. I like the Lindsell Train Global Equity fund. Or you may want to follow a theme, or indeed invest in an ethical or sustainable fund. AJ Bell have filters on their fund lists which will help.

The final option would be to look at a robo adviser like Nutmeg or Wealthify who keep it fairly simple and manageable

I guess my wise old biddy words would be, don’t let anxiety about what to pick put you off. Don’t try and shoot the lights out with ‘fun’ stuff like bitcoin. Avoid putting all your bets on one horse like the recent Monzo crowdfunding ‘opportunity’. Just buy a sensible decently priced fund, take enough risk for your age, and don’t sell at the first sign of a wobble. Chip in as much as you can, as often as you can, and increase amounts every time you get a pay rise. Making your own investments is the best way to learn – it takes it from an academic text book into something you can touch and feel.

Good luck,

Answered by

Holly Mackay

Founder and CEO of Boring Money

I’ve worked in investment markets for over 20 years. I started out at Merrill Lynch Investment Management and worked at a few big names before setting up my first business in 2008.