How to Invest Your First £1,000 Today (Step by step guide)
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- Опубликовано: 11 июн 2024
- Step-by-step guide for how and where to invest your first £1,000
Step 1: Pay off high interest debt
Before you start investing you should first look to pay down any high interest debt. This includes:
Credit card balances
Car finance
Personal loans
Student loans, here’s a video i did on this: • Should You Pay Off Stu...
You may want to build up a small emergency fund before doing this as otherwise you may get caught out in need of cash and have no other option but to go into more debt!
Step 2: Build up an Emergency Fund
Having a suitable emergency fund, to pay for any unexpected expenses, allows you to invest the rest of your money in the confidence that you won’t need to draw on it. Investing is a long term game, and you need to be able to keep that money invested for 5+ years, but you should really be thinking 30+ years!
Typically 3-9 months worth of expenses is enough. But it’s really up to you. If you’re conservative you could have more than this. If you’re comfortable with risk you could have no fund and just use credit cards
An emergency fund should be kept in an easily accessible savings account, if you have a large fund (10+ months) you could even put some of it in fixed term deposits.
You will not get a good level of interest. But this money is not there to get a good return. It’s there so you can confidently take risk, and get good returns, with the rest of your money.
Step 3: Get the right Protection
This is more important for those with young families. But everyone that’s working should have some level of cover.
If you get ill and are unable to work, or you die, you’re family is going to be in a very bad financial situation and any money you’re squirreled away for retirement isn’t going to go far.
Before you start investing, you should make sure you’ve got the right level of insurance to cover you if there worst should happen.
Income Protection - moneytothemasses.com/quick-sa...
Life Insurance - moneytothemasses.com/quick-sa...
www.confused.com/life-insuran...
To find our what cover you have through work you should email your HR department or manager, they will let you know the details.
What level of cover do I need?
Think this through, if the worst did happen, how much would you need? You should be able to answer this question yourself just by doing some simple forecasting. You should make sure that whatever protection you take out has some for of inflation adjustment. There’s no point taking out a policy today for £X and then claiming it in 10 years time only to find that £X is worth a lot less than it is today due to inflation!
Step 4: Choosing the right app
Watch my video on investing apps here: • Video
Step 5: Account Types
You should fully understand how each of these work and when they should be used. Do this before you start investing:
General Investment Account
ISA - www.nationwide.co.uk/savings/...
LISA - www.moneysavingexpert.com/sav...
SIPP - www.which.co.uk/money/pension...
Step 6: What to invest in
Please watch my video on Index funds here: • Vanguard Index Funds f...
Please watch my video on Vanguard Lifestrategy funds here: • Vanguard Lifestrategy ...
Watch my video here on why investing in individual stocks is not a good idea: • Video
DISCLAIMER This channel is for education purposes only and is not affiliated with any financial institution, although James does work as an employee for a wealth manager. This content is not a personal recommendation to take action. If you are looking for personal investment advice contact James directly.
James Shack™ property of James Shackell
Copyright © James Shackell 2021. All rights reserved.
The author asserts their moral right under the Copyright, Designs and Patents Act 1988 to be identified as the author of this channel and any video published on it.
0:00 Intro
1:34 Step 1 - Debt
2:53 Step 2 - Cash buffer
4:29 Step 3 - Best Investment apps
6:05 Step 4 - Account Types
7:58 Step 5 - To Fund or not to Fund
9:10 Step 6 - What to invest in
I hope you enjoy this guys! It's a little different from my usual stuff but I'm trying new things and trying to get better at Storytelling! Please let me know what you think! (and apologies in advance for my lame sense of humour 😂)
Great video James - always great to push the boat out and try some new creative stuff. Now thats there are two of you, send the other one out to do boring jobs for you so you can hit snooze haha :P
Loved it - thanks
Great video, simple and stripped back, sharing to some folk who are just starting out. 👍
Enjoyed watching this !
Great watch! Thanks for that
Thanks for your videos James, I've shared them with my sons. Fantastic advice, keep up the good work!
😂 brilliant video. Now binge watching the rest of your content 👍🏼 thanks for the info
The ending was both humorous and a sobering reminder great video!
Just found your channel i am 33 and wish i started years ago but better late than never thanks for the informative videos 😁, going to open a vanguard lifestratergy fund instead of saving to a normall isa with 0.2 %interest just send £250 a month into the the vanguard accound instead.
Thanks dean
Really informative. Thank you James
This should form part of the national curriculum. Great video
Hey James ,, That was one well made video , I learnt a lot so thanks.
Nice one James!!! Great video...going back to basics never hurts....Really good acting by the way 👍
Haha you lie!
You're doing an amazing job with those videos. Huge fan James! Spot on and carry on!
Thank you !
Great, video.As always you nailed.
Love it, haha. Also, I spot Catan on the shelf!
Bloody love Catan! It’s so addictive!
This is fantastic! Nice work
Cheers!
Okay subscribed. Well executed, easy to understand, nice kitchen, all great reasons to stick around!
Thank you and welcome!
Simple and well explained video as usual!
Thanks Euan!
Brilliant James !
My 17 year old son watched this twice . 👍
Great idea and great advice. So simple!
Thanks for watching Mike!
Just been recommended your channel by a friend. Only been investing for a few months now but people like yourself really make it much easier for people like me to understand haha. Great video! Brb, going to watch all your other videos!
Haha welcome!
Great video! Cracked me up
Another top vid, good job
Cheers Matthew!
This video has helped me a lot, thank you James. Can I just ask, would you recommend REIT's as an investment?
🤣🤣🤣🤣awesome video. Does no harm reiterating the basic principles. Thanks for your video, I love watching them. Hope your wedding went off smoothly!
It was perfect, thanks Arun!
James, brilliant advice and lol funny at the end - you've missed your calling as an actor.
Haha, thank you! Its funny how I've ended up doing this RUclips thing because I've always enjoyed performing or doing speeches. So it's all kind of come together!
Nice back to basics video. To be fair you had me as soon as I saw you and your wife are also Catan fans.
Addicted... I hear it's a gateway game to hardcore board games...
Awesome video, thanks for the clear advice! Your acting makes it a lot easier to understand ;)
Thanks James- another good video. I think the potential to access ‘emergency funds’ rather than cash on the side is important and I feel it is important to contribute to a work pension scheme - especially if they match your contribution.
Yes that is important too.
Superb James... People should be aware that there are quite a few scam companies out there who's "sales people" get very upset and even hang up on you if you don't sign up and transfer money immediately after they've given you the quotation!
Yes, there's lots of sham financial adviser firms out there selling dodgy mini-bonds and options. The internet is the safest place these days!
Haha loving the role play with yourself. . .
Great video James...as always. Hope the ball and chain isn’t too heavy for you!! 😉
Haha not yet anyway!
Hi James! Great videos for the community, keep up the good work! As a young person who is actually starting to invest and plans to do so for the longterm with monthly contributions, what is the point of choosing a percentage of bonds if stocks have proven to outperform the bonds in the longrun? I understand yes volatility and risks come with stocks, but is there any point in doing so if you are actually not gonna feel impressed about up and downs in the market?
That's it. If you don't think you'll be bothered by volatility and you can invest for 5+ years why not?
One of the best videos on RUclips. We need more of these types of videos. Thank you
Haha thanks Steph!
Great video James, probably my favourite of yours yet! Here in Australia, it reminds me of the "Barefoot Investor", who shares a very similar mentality (particularly around managing debt before investing). Worth checking out if you haven't heard of him already!
Yes I’m very familiar! Personal finance in Aus is way ahead of the Uk I think a lot of it is to do with your SUPAs and that people talk about them a lot.
Love the humour & editing James 😂 Great video!
Haha thanks Amit!
Awesome video and I bet the editing was an interesting process! Lots of great advice as always.
Thank Paul!
The old married man is back. Congrats! Your vids are always pretty good.
Thanks Chuck!
10/10
Thanks for the video, as always, James. QQ: when assessing whether it is sensible to pay back debt (i.e. mortgage) vs investing, would you also advise to take into consideration the type of amortization of our mortgage? I have noticed that most of videos on the platform usually focus on the numerical value of the interest to be payed (i.e. 3%) but rarely also on the type of amortization. In particular, I'm referring to the French amortization method normally used in some European countries through which most of the interest is payed at the early stage of the mortgage. So if a mortgage is matured and is in its later stages, even if the interest % is relatively high, the decisiom might not be as clear-cut as it might look like?
Good question, throughout the term of the mortgage you pay the same € amount each month (if interest rates stayed the same). I don’t think it has the effect you’re suggesting. I would look at it as an interest element and a capital element, but we’re only really comparing the interest element.
@@JamesShack True, you are right, the amount ia the same. I do believe that at the beginning, for the same amount payed, there is more interest and less capital payed than in the latest stage. But I am not fully sure of the mathematics behind it. Anyway, thanks a lot. Really like the format of your latest videos!
I have only my mortgage left to pay (which I'm aiming to pay off early). I'm 33 soon to be 34 in January. I have 6 months worth of living expenses saved, currently sat in an ISA. I have life insurance set up, the only thing I'm stuck on is what brokerage account to open with. Any suggestions? I'm happy to go down the route of 60/40 or 80/20 equity/bonds for the lifetime. Should I just use Vanguard?
To be clear, is it simple to just open a brokerage account and set up a direct debit to the brokerage account? If so, will it take my funds from there and invest in the lifetime strategy ornwill i need to set something up with the brokerage account?
Fantastic video, with some humour too. As a content creator as well, I can tell you the video editing on this would have taken a lot of effort! Talking through the TV screen was so cool James!
Haha you bet! Whenever I try something new i have to do everything twice, this time I had auto iso setup on my camera and the light kept changing so the two pictures next to each other looked terrible. Had to redo the whole thing! Now I know about manual iso tho!
Thanks, good video, nice and simple to understand.
Glad it was helpful!
just wondering what the logic is behind putting your first 1k into an ISA? from what i can tell the pro of an ISA's is that its tax free, but youre first 1k(and a long way past that) isnt going to return over the tax free allowance for a very long time, so why is the tax free aspect a consideration? so many people suggest the ISA for people starting out it makes me feel like iv'e maybe misunderstood how capital gains tax/allowance works.??
Great video, James. Really funny and full of clear information 👍🏻
Haha I’m glad you enjoyed it!
My dad sent me this video. And I’m so grateful that he did, I’m 21 and it’s say to say that I’m going to follow this video to a T
Haha, great stuff! Send him my regards!
You have Catan so that's always a good sign
Love it!
Excellent, been trying to convince friends and family of the concepts you explain in the video for a while now. Lending out books etc but not many people are interested in reading a whole book on the subject. Think I will just show them this video instead. You managed to sum it all up in 12 mins. Great job.
Thanks Patrick, i hope it helps!
Bitcoin is the future, Investing in it now will be the wisest thing to do especially with the current riseFor real it's very profitable
Great video, thanks!
Thanks for watching!
Hi James! Absolutely loving your videos, I am watching all of them and I am learning so much so thank you so much for this!!
I have decided to invest in a 100% equity life strategy fund with Vanguard as I am planning on investing for the long run. I have a question though, I am french and moved to the UK 8 years ago. I am planning on leaving the UK in the next 5 years and I was wondering if I would still be able to invest on the Vanguard platform even if I am not located in the UK anymore? Thank you for your precious help 🙏
I think you can leave it dormant in the account. But you'd have to check with Vanagurd
Good humor, loving the video - keep it up James
Thanks James!
What is best for short term investments ie 2- 3 years ?
Cash! Or fixed term deposits.
“Plantir” 🤣🤣
Nice video James, I’ve followed Tim Hale’s Smarter Investing book (although with a simpler investing strategy, as global index funds were much less accessible when his book was written), which is a very similar approach to what you put forward. But I still need to sort out the insurance side. As someone in my mid 20’s with no dependents or mortgage to worry about it’s even easier to ignore the insurance side of thing and hard to know what how much cover I would need. Any advice?
Again it's down to your attitude to risk. You could choose not to have it, but you do need to consider what it would be like if the worst happened, and then see how much cover would cost. Because it can be very cheap when you're young.
This was...different! 😀 Good video though!
Haha thank you!
Of course modern works pensions - and I am talking Tesco here - are all SIPPs. So just make sure you put the full amount into your works pension first.
Yes that's a good point, if your company does contribution matching you should almost always do this first.
The start sounds like an Etoro advert!
Etoro ads are dodgy AF!
Ahh such a cool video!!
Thanks Sara!
First view - whoop! 😂
Haha, beat me to the first Like! 😂
Nice one, second place!
Did loads of research on Reddit, lol!
👍
algorithm gang
This was really well performed and very different to what other financial content creators are putting out. Also congrats on surviving your wedding day 👍🏽
Thank you Atul!
10:00 😂
Wish I knew you when I was 18, now I'm 31 and time has flown by my issue is I'll only be able to put away £100 a month. As starting up my own business. If it goes well then I will increase how much I'll invest. Plus I'm very interested in SIPP
That’s a much earlier start than most!
Your advice is much better than your acting :)
Haha, correct!
Possible your greatest video yet I think 👌. With a S.I.P.P, don't you have to pay tax on it when you take it out tho? Thanks 😊
You do, but when you draw it you can manage it carefully to reduce the tax you have to pay.
@@JamesShack . That's good to hear, maybe one day I'll see a video on that topic the future form you 🙂. Keep up the excellent work.
*in the
@Alan Partridge yes I’m going to be doing much more content on retirement planning!
@@JamesShack . Excellent 👌, also I have another idea (not that you need it) . A video about what happens to your pension when you die, how much of it will your husband/wife be entitled to. I've been told from 2 people now to opt out of my pension, because I won't be able to pass it onto my wife if I pass away.
There seems to be some really bad pensions that pay out very little, and others that you can pass most of the money over. I know my dad got very little from my mum's, I don't want to sign up to something I can't pass on. Thanks for your help 👍😊
Great video thanks for sharing your knowledge with us, subscribed!
I'm Interested in your view on crypto coin investments also, ill be honest thats the only investments I actually have
TV is too high!
If I had 50000 pounds, could I invest this in one stock ie Apple or would this alert financial auditors asking about insider trading?
What’s wrong with China? The China Composite Index is down so it’s a great time to invest 😄
I didn’t mean it’s bad, it’s more the fact that the character was just finger in the air guessing!
Good one James, the last guy was copying my freetrade portfolio.
Haha!
Is there a situation where a S&S LISA may be better than a SIPP for retirement saving? considering the following points...
1, LISA government bonus up to age 50 (after which open a SIPP?)
2, The age of pension fund access potentially rising
3, The lifetime allowance on pensions
4, Early death (not sure how this is impacted, but I am presuming the LISA may be better)
Potentially a video in there, it's just something which crossed my mind.
For retirement a LISA has many disadvantages over a SIPP:
1) Tax relief is limited to basic rate relief
2) £4K limit
3) it takes up ISA allowance that you could also use elsewhere
4) it forms part of your estate when you die (a pension is inherited free of IHT)
It may be suitable if your getting near your pension lifetime allowance, or you want to buy a house, but other than that we don’t often recommend them.
Yea maybe worth a video!
@@JamesShack Thanks for the reply. It was a thought experiment more than anything. I pondered if some people were sleeping on some of the less obvious benefits of the LISA. Probably not advantageous to 99% of people, but I wouldn't want the 1% to miss out! Congratulations on the marriage by the way and good to see you back on RUclips!
As good a primer as any.
My wife's boyfriend loves $Tesla!
Haha!
Am I an anomaly? At 35 my focus is my pension. In fairness, I'm not saving for anything and my employer puts 14.5% to my 6% in.
Also setup a J-SIPP for my 6yr old daughter. She can't yolo that at 20 in Ibiza...
That's an insane amount into your pension. Maybe, with any extra cash, it makes sense to build up funds outside of this, in an ISA for instance. When you do retire, it's important to have a good diversity of taxable (pension) and tax paid (ISA/GIA)assets so you can create and income that balances between the two and minimizes your overall tax liability. Plus if gives you that extra flexibility if you do need to the cash to pay for Uni / house deposits.
J-SIPPs can be helpful, but they'll only get the money at 60+ and many parents would rather see that money be put to use in their lifetime, so for buying a house etc. But like you, i also think that 18 is too young to get it. For most people dividend tax or CGT is not going to be a problem, so one other simple option, that allows you to keep total control, is to open a separate GIA account in your name and mentally commit this to them.
@@JamesShack some knowledge bombs incoming! Cheers pal.
Yeh it's a great pension and the compound calculations are very promising. I will have the enviable 'problem' of managing around the lifetime pension allowance. Nice problem to have.
Certainly, any cash is going in to ISAs now.
In fairness, I didn't get gifted any money. So anything my daughter gets will be a massive boost and I'd rather she is secure in later life. Regardless of health, loss income due to child raising leave etc.
End of the video. "Guh".
Haha!
Don't invest in bonds, don't use credit cards, watch out for those annual management charges for funds
I have Watched every single of your videos and like all of them i reckon..
most of the people (including myself has or had these questions in the past or in the presemt itself or has friends that trades totally randomly).
I really like and share your philosophy! I am Investing on VNGA80 (V80A) and happy to see that we are sharing the same values.
I am curious to know what you do think about crypto and commodities like gold or silver for a short % of the capital like 5%. Just to further diversify in a developing market like crypto for example. I really would like to know your thought about it maybe in one of your videos!
I think it's fine to have a "core and satellite" portfolio where you have 80% invested in something standard and safe, and then you can do what you want with the other 20%. You can use that other 20% to invest in things your interested in.