Don’t chase the tax breaks. They are no longer worth such a chase.
Invest a little money, keep doing it, don’t take it out early, and lump in extra on top only when the market is down, not merely when you think you can afford it.
90% of the profits - come from buying at a low price from which the only way is up for your investments.
“Hoping the market will be higher one day” - is a lot easier to achieve - from such a low base that way.
The flaw in “trickle-investing” is that if the stock market is on the up for the first 15-20 years of your 30-40 year plan, and then goes into gradual long-term decline - you’ll STILL end up with less than you put in, less inflation taken off of THAT.
A gambler like me - would argue that "If you’re forced to take such long-term risks, then why not confront “Risk” more head on, and invest in those markets that have the lowest overheads and the highest profit potential…
Proper exchange-traded products.
Don’t do anything through an unregulated, and especially “Internet Only” outfit.
There are plenty of firms in this country who will take on clients with around £50k-£100k to play with, buying and selling everyday commodities that we’ve all heard of, rather than trying to trade misty faraway company shares that may disappear overnight, and take all your cash with them.
I don’t mind taking “Market Risk”, but I REFUSE to take “Integrity Risk”.
If I buy something, and it drops in price - that’s a risk I’m prepared to take.
I don’t have to sell it to take that hit, - I can hang onto it for as long as it takes to come right.
I’ll spread my money around several investments, so one or two of them collapsing - doesn’t bust my account.
If I open an account with an “unregulated” micky mouse broker, and they run off with my cash the moment I attempt a drawdown of that huge profit I made on paper - that’s NOT a risk I’m prepared to take.
“Segregated Funds”
“Member of Financial Conduct Authority” (Absolute must - this one!)
“Has a brick-and-mortal office you can go to, sit down and talk with someone at”.
Don’t take a firm’s word for it they ARE “regulated”. Check WITH the regulator - to make sure they are on the list of bona-fide brokers that you can trust…
“Financial Advice” is best done by your own research. Why let someone else take risks FOR you, if you’re really trying to skirt risk, rather than just face it head-on by your own decision-making process?
“I don’t recommend you invest in the market at this time Mr Bloggs. You can open an account with us, which pays no interest, whilst you wait an indeterminate amount of time for an opportunity to enter the market to arise… That’ll be £1700 FInancial Advice Fee Please!”
A more reputable broker might say:
“We don’t let people open accounts here - unless they can demonstrate to us they know what they are doing”.
“Have you ever owned investments before Mr Bloggs?”
“Yes.”
“Have you ever sold shares for a profit?”
“Yes”.
“Have you ever sold shares for a LOSS?”
“Yes”.
That latter point - is perhaps more important than the ones before.
If you’ve ever lost money investing, then you have some hard and serious experience that starry-eyed “Beginners” just do NOT have.
Mr Bloggs saying “Yes” to those three questions above - is enough to render them an “Intermediate Investor” rather than “A complete Beginner”.
Even the con-outfits will give you the standard risk warning that “Warning - Most investors aim to trade rather than invest, and most traders end up LOSING money”.
(The risk is higher, because with “Trading” - you want a quick profit, and will take a quick loss it doesn’t come right straight away)
With “Investing for income” - it helps if you buy, and the price falls - because you’ve got the dividend nailed down, you have no intention of selling in the short term anyways, and you’re looking to trickle ADD in future, so, if anything - the lower the price goes after you’ve bought your first lump - the better! (just not to “zero” of course!)
“Execution Only” accounts can start with around £10,000 balances
“Advisory” accounts - need around £25,000.
The former give no advice, but cheaper transaction charges.
The latter will warn you, give you tips, steer you away from dodgy deals, but will charge a management fee - even if you spend the entire financial year sitting on the sidelines, with your money languishing at zero interest on their client account…
You cannot open an account with the same expectations of a bank cheque account, with a week’s wages to start, and then simply “trickle money into it”.
Lump sums in, don’t draw out dribs and drabs for the best performance.
Leave dividends paid into the account to purchase further investments if you can.
Make use of the “Nominee Account System” to keep your overhead charges down, and (more importantly) the ability to buy and sell shares at a mouse-click, rather than have to sign forms etc. as would be the case if you wanted say, a share certificate sent to your home… “Nominee Account” - is a MUST for the armchair investor, of course…