2 min read
Wellbeing for individuals

Am I ready to invest?

Catherine Miller

by Catherine Thomas-Humphreys (www.thefinfluencer.co.uk)

10 questions to ask yourself before beginning to invest:

  • Emergency saving: Do I have sufficient cash savings to use in an emergency and for specific short term goals that I’ve set in the next few years?
  • Purpose of investing: What’s my reason for investing?  Is this for my retirement or for a goal I have for 5+ years?
  • Risk tolerance: Am I comfortable taking a level of risk with some of my money?  Investment values can rise and fall – do I feel comfortable with this?
  • Capacity for loss: Can I afford to lose some of this money? Would losing some of this money in the short term affect my day to day standard of living today?
  • Investment understanding:  Do I understand this investment? Do I know how this investment works, what its invested in and what risk level it is?
  • Product tax rules:  Do I understand the tax rules related to this Investment? Pensions and ISAs are known as Tax Wrappers.  Do I understand which taxes do and don’t apply to this investment?
  • Can I get my money out easily:  For example property is less “liquid” than shares, bonds.  How long until I can get this money back if needed?
  • Are these investments regulated:  Can I see the provider and product is regulated by the FCA.
  • Am I protected: If my chosen provider goes out of business, am I covered by the FSCS government compensation scheme?
  • Should I get financial advice:  Do I feel confident enough to continue investing or should I seek advice?  Is my situation particularly complex, has multiple goals or am I looking to invest a significant sum?

Photo by Towfiqu barbhuiya on Unsplash

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