Keep a buffer of cash in case of emergencies. e.g. unexpected expense like (car breakdown) or losing your job.
Payoff debt before investing as it is difficult to make sufficient investment returns to exceed the interest on your debt.
Use tax free investments like pensions and ISAs.
I prefer ISAs as rules are simpler and it is easier to withdraw money.
If your employer offers a personal pension and will make a contribution then start a pension. If you have debt then make the minimum payment to to obtain the full employer contribution.
If you are saving for the short term, like a house deposit, then go for a savings account.
If you are investing for the longer term (e.g. for retirement) then invest in the stock market
Where to invest
Open a stock brokers account, see my suggestions below.
Go for low charges, an index tracker or investment trust. See investment suggestions below.
Avoid buy to let. Houses are just as risky as the stock market but harder to sell when you need the money.
Market Timing
It is not possible to reliably buy at the bottom and sell at the top of the market.
So do not invest all your money in one go. Invest a fixed amount regularly.
Double your investment when the market crashes. Note: this is difficult to achieve.
Why follow this advice?
It is difficult to find financial advice that you can trust. My advice is simple to follow and I have nothing to gain. I have been investing my own money in the stock market for more than 20 years. So I have had time to learn from successes and failures. I have given this advice to friends and family members.I will give it to my children when they are ready.I am not a financial adviser, I do not work for a bank or in the stock market. I do not intend to make any money from this guide.
You are free to copy and adapt this guide as you wish, I ask for nothing in return.
Investment suggestions:
60% in iShares Core MSCI World UCITS. (Ticker SWDA). An EFT that tracks the worlds major economies. Total expense ratio of 0.2%.
20% in Aberdeen Asian Small Companies Investment Trust ( Ticker AAS)
20% in JPMorgan European Smaller Companies Investment Trust (Ticker JEO).