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, do I have multiple goals or am I looking to invest a significant sum?

Photo by Towfiqu barbhuiya on Unsplash

This content is for information purposes only, you should not construe any such information or other material  as legal, tax, investment, financial or other advice.

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