Completely overwhelmed but need to act - help please!

[kualitate]

I have always held my money in cash ISAs and have been very cautious as I am planning to buy a house in the next 6 months. However, I'm realising that I ought to have been investing years ago alongside saving hard. This is my now my next big financial goal so I can secure some future stability and make my money work harder for me. Also, my pension situation is woeful after many years of freelancing/fixed term contracts so I need to address this through investing.

I have started to read up on investing but am completely overwhelmed by how much information is out there and it seems so complex - way harder than just knowing you can just sticking up to 20k in a cash ISA and you won't pay tax on it. Can anyone point me towards some good resources (videos/books/websites) as I take the next step towards investing with confidence? Feeling really out of my depth :/

You can just stick £20k per year into a portfolio S&S ISA. I'm not at that level of investment but have started investing this way in parallel to less risky cash ISA and premium bonds.

Rebel Finance School on Facebook and Youtube.

This is where I am too - my Cash ISA is maxed out and I have a healthy chunk in PBs too. Is there a particular S&S Isa you'd recommend? I've used up my allowance for this year so don't think I can open one up for this year. Unless I transfer some of the money in my Cash ISA into it?

Check out FemaleInvest on Insta.

Have you got a LISA, as you're planning to buy a house. Need to get one ASAP if not!

I think it's too late as I'm going to start house hunting and hopefully putting in offers in the new year with the aim of completing within the next few months. Wish I had opened one years ago though but I never got around to it, hence starting with my pensions/investing now!!

Check out the Dummies book series - they have a few investment ones , I also had a free trial subscription of investors chronicle - I think it was 12 copies free - it worked - I still read it 2 years later .

Lots of ways to invest - I use an Interactive Investor ISA where I pick my own investments , they also do Managed ISAs where they pick for you . There are lots of other options though , whilst that had good fees when I started investing 3 years ago I’m sure there may well be cheaper options now

A year or two ago I would have said just drip money into a low cost global tracker - but they are very US heavy and there is definitely some concern about that at the moment .

Ps do not invest any of the money you need for the house deposit .

If you open up a Stocks & Shares ISA and complete a transfer form with them, you can transfer your money from your current provider - that way you won’t lose your allowance from this financial year.

Check out Money Saving Expert - they have a guide on different low cost S&S ISA providers.

If your appetite for risk is low, research ETFs - basically investments funds that spread your money across a variety of commodities, such as stocks.

Vanguard and iShares have a lot of different ETFs to choose from and they’re available on many investing platforms.

I invest with Fidelity, there are lots of funds to choose from. I don't really know what I'm doing so pick a variety of funds over different areas. If I think the markets going to plummet I can transfer some into their cash based funds but it takes a few days (these are not cash ISAs, still S&S ISA).

This is probably a silly question, but if I invest £50 and the stocks/shares go down and it's only worth £30 in a month's time, will it go back up by itself if the market picks up and do I just leave it? Or is that £20 just gone forever?

@kualitate it’s only a loss if you ‘realise’ it - eg take your money out of the fund. If you leave it in it could grow (or the fund could go down).

I second what a pp said about Rebel Finance school. They have free videos on YouTube and a facebook group (but watch the videos before joining the group as it’s a bit overwhelming).

Stocksandsavings is another good Instagram account to follow.

It would only be gone forever if you took your money out of the stocks and shares ISA while it was down.

It absolutely will go down and up. Over time, it trends upward by more than a bank account interest rate. That is going by history. None of us can guarantee what will happen in future.

@chimichangaz great name and thanks for explaining! I think I've got it now but what if the whole £50 is lost as in it is wiped out completely due to a drop in the markets?

I'll watch the videos and see if I can get a bit more confidence!

Stating the obvious but don't invest any money you're planning to spend on the house. You need a 5y+ time horizon.

House deposit is defo not being touched at all - just looking ahead to after I buy in terms of investing/growing remaining funds (after emergency budget is accounted for of course) :)

Meaningful money is a podcast and YouTube run by British guy in Cornwall. Really holds your hand thru the whole process of investing and what you need at each stage.

Personally I have S&S ISA with Vanguard and I buy their ready made funds. I plan on the money being in there for the long run so it's in 100% equity funds.

Vanguard Life Strategy 100% equity accumulation

You can reduce risk by having less exposure to equities by having Life Strategy 80% / 60% 40% etc but the returns will be lower

Ideally you need to have all debts paid off plus an emergency fund if 6 months of living costs in easy access savings account or PB'S

Then can look to long term savings in stocks and shares

I haven't watched this yet, last week's The Martin Lewis Money Show Live was a beginners guide to investing (9th Dec - Series 14 - Episode 17 - ITVX https://share.google/pnTeCKOxjFvpS11FP)

I think it’s unlikely you’d lose the whole £50 as there would have to be a stock market collapse or (if only invested in one company) that company goes bust. And even then you’d likely get a very small amount back.

Meaningful Money as another poster suggested is a good shout and he also has a book. Damien talks money is also good, on YouTube. There’s also a company called Boring Money who do lots of information sharing about best buys and have a newsletter. How to own the world by Andrew Craig also a good book. He has a YouTube channel too.

Investing in a ready made fund or a S&S ISA is IMO the best way to spread the risk but really you do need to be in it for the long term (eg 10 years or more) to really see gains.

As well as all the good resources being mentioned on here there are a lot of cowboys out there on the internet. Just remember that if something looks too good to be true it probably is - and no one can guarantee fabulous returns. There is a risk with investing but IMO a bigger risk in not learning about it and investing wisely - especially if you’re young (under 40).

Good luck OP!!

Another vote for Meaningful Money. I was a bit like you in that I didn't get round to investing when I could have done but I started listening to the podcast a couple of years ago and learned that for the medium to long term you just need to start by putting money in low cost global trackers in a S&S ISA and/or a pension. That's it unless you have so much to invest that you use up your ISA and pension allowances, which the majority don't.

As for ups and downs in the stock market, if you're in it for the long term, it's 'pound cost averaging' that counts. So if you invested £100 today but the value went down 10%, you have lost £10, but at that time you'll also be investing £100, but because the market is down, that £100 buys more 'fund' so you have more to grow later.

Meaningful Money has also explained that the market has always recovered even after big crashes like the Wall Street crash, the 2008 credit crunch and the start of covid so as long as you have a diverse portfolio and don't do anything silly like sell in a falling market you'll almost certainly be better off investing than cash over the longer term(although you should make sure you have a decent emergency fund in the best paying instant access account and take advantage of your personal savings allowance which allows a certain amount of tax free interest unless you're a very high earner).

So while Trump's lunacy is worrying, you should see any effect on the market over the next few years as a chance to invest at a discount rather than worrying about losing money.

@Bjorkdidit great explanation of pound cost averaging - I really understand it now!!

I opened a stocks and shares ISA with my bank for ease, and transferred half of my cash ISA. My bank has about 5 portfolios to choose from. I went for moderate risk and it's about 10% up from when I invested in the spring.

Do look at pound cost averaging, and as a previous poster said: think long term investment like a pension.
I was lucky that I invested when the markets were low. If you invest just before a dip then you do lose money. No one knows for sure whether the future trend is up of down though, so only invest what you are prepared to risk.

I was you, I found this simple book really helpful (even though author is not in the UK). She also has YouTube videos, which are also good. https://www.amazon.co.uk/Friends-That-Invest-Financial-Independence/dp/1394377770/ref=asc_df_1394377770?mcid=1934113984eb3260ae595682ee29a255&th=1&psc=1&tag=googshopuk-21&linkCode=df0&hvadid=770446686698&hvpos=&hvnetw=g&hvrand=6977753595413321081&hvpone=&hvptwo=&hvqmt=&hvdev=m&hvdvcmdl=&hvlocint=&hvlocphy=1006886&hvtargid=pla-2440896343854&psc=1&hvocijid=6977753595413321081-1394377770-&hvexpln=0&gad_source=1

I also recommend Nisha’s YouTube videos, she is UK based and explains finance/investments etc in simple terms.

@Bjorkdidit this is really, really helpful, thanks so much! It makes it much less scary now :) I just feel so silly I didn't look into investing or any of this earlier as I've held so much in cash - partly out of fear, but also because I always knew I wanted to buy a house relatively soon so I didn't want to risk any of it. I've now saved got 100k+ saved so know that I have no problem saving and scrimping but there's only so much just saving can do for me in the long term.

Should I wait until April when the tax year resets to start investing as I've already maxed out my cash ISAs now? Hopefully by then I will have bought too or is it worth starting to drip feed a few grand?