No financial knowledge at all, advice appreciated!

[Wavypurple]

I would be massively grateful if anyone could give me some advice. There seem to be lots of very wise and educated posters on here.

I’ve managed to save (almost) £10k. I earn just above minimum wage and it’s taken years starting from £0 so I’m pretty pleased with this 🤣

At the moment it’s in an ISA.

Is this amount of money enough to start making investments? What would I even invest in? Is it worth speaking to a financial advisor or is that pointless with this amount of money? Should I keep it there to use as a deposit on a flat/house eventually? 🤦🏼‍♀️

I don’t own any property and still renting. I will probably be moving around for the next few years which is why I haven’t really considered putting it towards a deposit. I have a student loan but no other debt.

Sorry if this comes across as really, really stupid. I have no knowledge about money/finances whatsoever.

Thanks in advance

The thing is with investments is you could lose money. So you have to think about how much risk you are willing to take with your money.

I’m willing to take a certain amount of risk. I just don’t know where to start

Allocate some of that to be an emergency fund, of say 6 months of typical expenses. Think about a situation such as if you lose your job, how much would you need to last for 6 months without income?

£100 per month in to a Stocks and Shares ISA could get you started on investing. You need to be thinking long term, at least 5 years before you would access the money. Using a Stocks & Shares ISA you can access it earlier but you don't want to be accessing it when it is at a loss, as that locks in the loss.

As you have not purchased property, you could also put some towards a Cash Lifetime ISA, if you intend to buy a property in the next few years.

What are you doing about a pension? Is your workplace providing a pension scheme to which they contribute?

Some podcast episodes for beginner investors:
meaningfulmoney.tv/UG4
meaningfulmoney.tv/UG5

You don't need a financial adviser:

If you do intend to buy property at some point I'd put some of it in the Isa for first time buyers
Wish I'd done that
Though I've got the pension version of it now. For everything I put in the government out in 25% up to £4K a year

Congrats on your savings OP! Amazing achievement!

What are your circumstances and plans for the future OP?

Do you have an emergency fund of easily accessible cash of about six months living expenses ?
10 k sounds about right for this, so don’t put that money away in case you lose your job, or the boiler breaks.

Lifetime Isa if you think you’ll want to buy a house at some point.

Don’t see an adviser. Without wishing to be disrespectful, they won’t see someone with £10k.

Even with a low risk fund you might lose money over 2-3 years.

The key thing is to work out what you actually need to achieve with the money - house purchase, pension, rainy day fund? Once you know that the rest will take shape.

Unfortunately, very poor rates on cash make it hard for someone in your situation because you’re stuck between losing money in real terms in a cash ISA vs. taking risk you may not really be able to tolerate in stock markets.

As others have posted, please please make sure you have enough to cover yourself for a few mths if you were to face a financial problem (e.g losing your job). Your investment need to be left untouched for some time so you cannot afford to leave yourself in a situation where you become a forced seller if you need money at short notice.

Hi @Wavypurple, I work in the investment industry. You could start by investing some money through a company Vanguard. They're a low cost investment company (US based) who run a huge range of investment funds but are primarily known for their 'index funds'...funds which track an index (like the FTSE 100 Index)...safe but not hugely exciting investments. If you look at their Lifestrategy range of funds, you can work out what kind of fund you think is suitable for you (they each have a differing proportion of equities versus bonds. Bonds are generally seen as being safer (ie less volatile) than equities but with lower returns). The website is incredibly straightforward and so easy to learn from about how investments work. I don't work there btw, so this isn't a plug from that perspective!