Lots of regular people have been dipping their toes in the waters of investing in recent decades. Now that it’s possible to invest from a smartphone, there are plenty of people eager to grow their money. But for people who want to get serious about investing, an investing account is essential. Here’s how to pick the best investing account for your needs.
Start with a Thorough Audit
Before you can begin seriously looking at any kind of investment option, you need to first establish how much money you have available to you. So, the very first thing to do is conduct a thorough audit of your current finances. Work out how much money you have in total, what your monthly income and expenses are, and how much money you can afford to lose without major consequences for your life.
That last one is important. Remember that no investing in completely risk-free. There are some types of investment, such as bonds, that are considered to be very safe. These are about as close to a guaranteed return on your money that you can get, but there is no such thing as a 100% guaranteed investment option. If you want to be certain that your money will grow, a regular savings account gives you that certainty.
Once you know how much money you have available to you and how much you are going to set aside for investing, you can then start looking for an investment account that suits your needs. For example, if you are expecting to invest between £25 and £20,000, an ISA account might be the perfect option for you.
Set a Savings and Investment Goal
In order to find the best account for your individual saving goals, you will need to know what those goals are. If you don’t know what you want to achieve as an investor then you are going to find it hard to properly compare investing accounts. For example, there are some savings accounts that are designed specifically for savers who want to put money aside for their child’s 18th birthday.
The same is true of your investing account, there are various different types of investing account available to cater to people with different financial goals. If you want to get the most out of your investing account, then you need to choose the right one. If you are only going to be making one type of investment, such as trading in stocks and shares, you should consider an investing account that is designed specifically for that type of investing.
Pay Down Your Debts First
Paying down your debts is always worth doing, less debt means less stress. However, if you want to maximize your returns from any investment then you should reduce your existing debts as much as you can. If you already have significant debts hanging over your head when you begin investing then any money that you make will already be spoken for, meaning it will take longer for your profits to start truly adding to your available finances.
There are plenty of simple things that you can do to reduce your debt levels. Even if you aren’t in a position to clear debts completely, if you can at least reduce them to a more manageable level then it is worth doing so. For example, debt consolidation involves taking out a new debt in order to pay off your existing debts. This might sound counterproductive, but if this new debt has a repayment rate that works out cheaper than the combined repayment costs of all your debts individually then it makes more sense to do it.
Consider An ISA
An Individual Savings Account, or ISA account, is a great option for savers who aren’t expecting to invest more than £20,000 over the course of the year. You won’t have to pay any income tax or capital gains tax on money that you make with an ISA and you will be able to choose from a range of investment options.
If you think that an ISA account is the right option for you, you can find information about an ISA account here. Willis Owen offers a flexible stocks & shares ISA, meaning that you are allowed to make withdrawals from your account freely, as long as you replace the money within the same tax year. You can open an ISA with as little as £25 and can continue to invest more whenever you like, up to the £20,000 limit.
Investing has never been more accessible for those who want to improve their financial stability and grow their nest egg. Of course, investing always comes with risks and there are no guarantees. However, by combining riskier investments in stocks and shares withs safer investments such as long-term bonds, you can reduce your risks. Having the right investing account ensures that you will get to keep as much of your profit as possible.