Do you want to start investing but don’t know where to begin? Nina Kelly explains how she got stuck in.
I’m in my 30s and started investing – by which I mean I opened a stocks and shares Isa – a few months ago. What took you so long, experienced investors might wonder. It’s simple – I lacked knowledge about the investment options out there, and I had little understanding of the concept of risk. Also, I will admit to fulfilling a stubborn stereotype: I thought investing was only for people who already had shedloads of money.
Luckily for me, I started a new job in fintech at about the same time that I began dipping into lifestyle website Refinery 29’s Money Diaries – imitated by many – which offer fascinating insights into individual lives and anonymous women’s spending habits. While a lot of people became puce-faced over how much a millennial intern spends on smashed avocados, I just enjoyed the mundane food-related details.
In my new job for Money Observer, meanwhile, I began to collect small nuggets of knowledge about investing. If I had not discovered investing via my workplace – who knows how long it could have taken me to get started?
My move from curious to committed beginner investor cannot be attributed to any single catalyst, but one of the things that did help me get started was the opportunity to attend after-work events aimed at women. I went to two and got a lot out of both, filling in gaps in my knowledge and casting off any embarrassment I felt about those gaps, while leaving no canapé uneaten.
One event was held by WealthSimple, a relatively new robo adviser (offering online investment services), and the other by interactive investor (ii), the second-largest online investment platform in the UK and parent company of Money Observer.
I’d encourage any beginner lucky enough to have a bit of spare cash to attend such events. They are ideal environments to ask your “stupid” questions, network, and sample all the tempting snackettes on offer. This type of event is also an opportunity to learn about some of the investment platforms, for when you are ready to choose one.
WealthSimple’s event was held in an elegant female-only members’ club where the speaker impressed upon an audience of women ranging from their 20s to their 50s the importance of getting starting NOW – after having paid off credit card debts, built up an emergency fund of three to six months’ salary, and done their research.
The message was clear: don’t procrastinate, because the sooner you get started, the more money you are likely to accrue over time – thanks, in part, to the power of compound interest.
Nerves calmed with wine, we learned that only a small amount of money is necessary to start investing (I lit up) and were introduced to the concepts of risk and investment fees, as well as the idea of socially responsible investing, among other things. I discovered the importance of thinking about investing as something for the long term, which means tying up money for five years minimum. A Q&A session at the end gave the participants a chance to ask their “stupid” questions – all very sensible from a beginner’s perspective.
At the ii event introduced by Helena Morrissey (Legal & General’s head of personal investing and founder of the 30% Club, a campaign for more gender-balanced corporate boards), five female investing experts spoke on beginner topics, including stocks and shares Isas.
The opening discussion was about how a lack of confidence and the gender pay and pension gaps are thought to limit the number of women investing. Other factors play a role, suggested Faith Glasgow, editor of Money Observer, including financial jargon and a lack of trust in investment providers, as well as simply not knowing where to start.
One suggestion that resonated came from Rebecca O’Keeffe, head of personal investing at ii, who urged the audience to “search for the free money in your life…[such as the] Lifetime Isa bonus; tax relief on pensions [and] employer contributions to your pension…”. She suggested that if audience members did only one thing for themselves that week, it should be to ask their employer how much “contribution matching” was available on employee pensions.
I wondered how many women followed this advice up? If you can afford it, you could be getting more free money from your employer for your pension. Auto-enrolment rules that were updated in April 2019 require employers to pay a minimum of 3% into employee pensions, with employees obliged to contribute 5% (although people can opt out). However, if you can pay in a higher amount, many employers are willing to match your contribution, up to a certain limit. Over time, this can make a big difference to the size of your retirement savings and it is well worth exploring what is on offer to you.
So, I’d encourage anyone curious about investing to search online for beginner events. You’re very likely to ingest at least one new kernel of information, and if you don’t, there’s always the canapés.