How to start investing… Part 1

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4 Best Places To Invest - Part 1 Yourself

What is the best thing to invest in?

Investing – Who even knows? Is there any real education about how to make your money make money? Where best to invest to make your money grow? Schools in the UK are incredibly good at teaching children how to get a job and earn money… but very few teach them how to create their own business and invest money wisely. No-one really teaches how to turn that earned money into even more money. The truth is simple; they just don’t know how or it is is not seen as a priority…

We live in an age where society teaches us that it is ok to spend money we don’t have! We then have generations of people in vast amounts of debt that is siphoned from our accounts every month, most of the time we don’t even notice it. Hell, there are many people who get paid large sums of money on pay day, yet this sets their bank balance back to £00.00. as their income suffices to pays off their over draft or a portion of their credit card bills. This is called living paycheck to paycheck and is something that we as a society have become used to and see as ‘normal’.

So at 31 years old, what have I been taught about money?

  1. In order to make it you need to get a good job
  2. To get a good job you need a degree
  3. To get a degree you need to have done well in school.

Firstly, this is a system that ensures little worker bees continue to make the rich richer. Some jobs even give incentives to spend your money at the place you work (offering discounts for example)! This is brilliant for the company but not so great for your pocket.

I was also taught that it’s ok to spend the money you make, ‘what’s the point in earning it if you don’t spend your time enjoying it?’ You always have finance as an option right? If you can’t afford it right now, you can pay for it over several months! As a result, there is no need to save for anything as you can buy things on credit and pay monthly – (usually at an additional cost)!

Once we’ve spent more money than we have, we are told ‘guess what? when you have spent too much on one credit card, you can then take another credit card to help pay off the first and let the vicious cycle continue!’

What is the problem with this mentality?

From my experience, research and reading so far –  you will never amass any type of wealth other than a wealth of debt!  

What can we do about this?

We can educate ourselves and invest wisely – I’m a big fan of the journey, so I will be partially documenting mine so far and what I will be doing in the future. I will be splitting this topic into several posts to avoid a lengthy read. The posts will be released each week.

Places to invest

  1. Yourself (knowledge)
  2. Stocks and shares
  3. Property investing/Your own home
  4. Additional sources of income

Yourself

If you hate reading, it’s time to start loving it, or at least ‘Audibling’ it. As you will not or have not learnt how to make your money make more money you will need to start there. The first place to start is reading books about how to change your view on money. The best place to start? ‘Millionaire Teacher’ recommended to me by a friend Jordan Jones.

In this book we follow the author ‘Andrew Hallam’ as he tells us how he made additional money on the stock market and how we can too. Hallam taught me a little about index funds – it was a fantastic starting point with not too much technical jargon for a beginner.

The long and short of it is that he suggested that you can make a lot of money by investing in these indexes over a long period of time. He suggests the method he uses which is investing in specific funds monthly and then balancing your account at the end of the year.

The alternative is to follow what Hallam’s wife does, which is investing in a target retirement fund. She invests every month in a fund that distributes her money across different areas – meaning her investment is in a diversified portfolio and is a safer option – if one exists! This option is good for someone that doesn’t know much about investing and or is less bothered about the marginal gain of doing the first method. If you don’t want to spend too much time worrying about it, this is the option to choose; so that’s what I chose.

Books that change your mindset

Books are a fantastic way to gain knowledge!

Recommendation 1:

Firstly, the book that changed my mind set completely and taught me a lot, as well as millions of people around the world was ‘Rich Dad Poor Dad’ by Robert Kiyosaki. This book taught me about ‘assets and liabilities’, two things that will change your life. Kiyosaki suggests ‘poor people and the middle class have a lot of liabilities and don’t realise.’ A liability is something that costs you money, where as an asset is something that makes you money.

As a result of years of education about money and investing, rich people often have assets that pay for their liabilities. On the other hand, the poor/middle class have to work for a wage that pay for their liabilities.  Additionally, Kiyosaki also made it clear that it is important to think of different ways to make money, not different ways to earn money by working for it. You need to gain an understanding of how to put your money to work.

Although Kiosaki chooses not to give any clear-cut advice about how to do this, he does however write about how he invested in real estate to further his investments. Kiosaki’s main message resonates with me – avoid working for your money and you will start to figure out ways that you can invest your money to make it work for you.

Recommendation 2:

The next book that really helped push this investing journey forward was ‘The Richest Man in Babylon’. This is now probably one of my favourite books! I loved following the stories of how different people made their wealth and the tips that are passed on through these stories. Parts in the book are about how people today can apply the principles from thousands of years ago in Babylon to decrease their debt.

First thing to do is to portion out your income: “If you are in debt, live on 70% of what you make. Save 10% for yourself. Use the remaining 20% to repay your debts.” You will find that if you “Stick with the plan. Money accrues surprisingly quickly, and debts are gone fast with discipline and consistency.” Points taken from https://jamesclear.com/book-summaries/the-richest-man-in-babylon .

He also goes on to summarise the 5 laws of gold “1) Gold comes easily and in increasing quantity to the person who saves at least 1/10th of their earnings. 2) Gold labors diligently and multiplies for the person who finds it profitable employment. 3) Gold clings to the protection of the person who invests their gold with wise people. 4) Gold slips away from the person who invests gold into purposes through which they are not familiar. 5) Gold flees the person who tries to force it into impossible earnings.”  

As you can see from the points made, above all, if we research and apply the principles learnt to our lives, we too can be free from debt, invest wisely and put our money to work.

Recommendation 3:

The final book I would like to reference on investing is: ‘The Complete Guide to Property Investment: How to survive & thrive in the new world of buy-to-let’ The title (although a bit of a mouth full) summarises the intention of the book well. The author also has a property podcast that has been going for years called ‘The Property Podcast’. A very worth while investment of your time!

The problem many of us face is how?

If we look at law 4) Gold slips away from the person who invests gold into purposes through which they are not familiar. This means that we should invest in what we know. The problem is that if we don’t know about something, how can we invest in it? This is why reading and researching are so important. You can learn a range of different things that you can invest your money in. This is difficult and daunting for everyone at the start – what should I focus my research and reading on? 

I hope this introduction on investing has been useful, check in again next week for more information on the stock market, what I look at and what I do for my family. Below are affiliate links for the other books I have either read or listened to on my journey. It is important to note that a fantastic source of information is YouTube. Also don’t be afraid to pay a little money to learn something new, Lord knows I have, just think of the cost to benefit ratio and you should be fine.

P.S.

If you don’t have time to read, consider joining audible using the banner below and you can get through books in a jiffy, especially useful if your children take up most of your time. Free trial available now through the link below… remember, investing in yourself and education is the starting point!

Disclaimer – The End-Richs are not financial advisers, lawyers or accountants and do not recommend anything specifically. If investing is something you are interested in, please make sure you do lots of additional research and if necessary, contact a financial adviser.

Also available on Kindle

Also available on Kindle.

Also available on Kindle.

Also available on Kindle.

Also available on Kindle

Also available on Kindle.

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2 thoughts on “How to start investing… Part 1”

  1. Tika-mesha williams

    Another great read guys.
    The statement on investing in self and also re schools not teaching children how to run a business etc…. I so agree x

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