So you want to start investing?
So you want to learn about investing, index funds, financial independence and more? Well there is a lot to learn but it all starts with one article. We wanted to make it as easy as possible for you to get going, so this is a list of articles and the order to read them in plus a few bits from some of the best investors we know.
Investing is the sexy subject in finance because it comes with the promise of the fabled, mythical beast of passive income. You can invest your money, put it out to work for you and magically MORE money turns up. What an amazing concept?
I first heard about passive income from self-development books in the early 2000s but I never thought it was possible for me to do it. They explained it to me but it all sounded way out there. The only type I thought was even possible for me was property investing, I understood buying a house and renting it out. I had been scared off investing in the stock market by my dad that persuaded me to invest my life savings in an actively managed fund right before the dot com bubble; it crashed and I lost nearly everything!
That all changed when I learnt about index investing, started to put my money into the stock market (by buying a broad based index fund like the Vanguard FTSE Global All Cap) and left it to grow!
Every £ or $ you have in the market is being used by companies to grow their businesses, sell more products or services and generate a return for the shareholders (me and you if you own stocks and shares!). You really can put your money to work for you and earn income whilst you are asleep.
As at the end of September, 2021, our investments have gone up £170,000 this year! I still can't believe this. The money we have invested over the years has continued to grow and produced a return whilst Katie and I have been travelling around the world, having fun and eating almond croissants!
We have invested our money and got passive income. This all seems too good to be true but it is possible. We achieved it and my hope with these articles is you can achieve it too. In fact it is not really a hope as I know you can. Investing can actually be quite simple when you break it all down but to start with it will feel like learning another language.
This is an incredibly exciting journey and can be a life changing set of skills and knowledge to learn. Investing meant Katie and I could retire 25 years earlier than the average person in the UK! Strap in and read the articles that follow. Work through them, watch some of the videos, learn and look up the different terms and start to work on your investing knowledge.
Passive income is possible and creating wealth relies on you creating a gap between your income and expenditure and investing the difference. First a little warning to go with the positivity!
Investing is the sexy subject in finance because it comes with the promise of the fabled, mythical beast of passive income. You can invest your money, put it out to work for you and magically MORE money turns up. What an amazing concept?
I first heard about passive income from self-development books in the early 2000s but I never thought it was possible for me to do it. They explained it to me but it all sounded way out there. The only type I thought was even possible for me was property investing, I understood buying a house and renting it out. I had been scared off investing in the stock market by my dad that persuaded me to invest my life savings in an actively managed fund right before the dot com bubble; it crashed and I lost nearly everything!
That all changed when I learnt about index investing, started to put my money into the stock market (by buying a broad based index fund like the Vanguard FTSE Global All Cap) and left it to grow!
Every £ or $ you have in the market is being used by companies to grow their businesses, sell more products or services and generate a return for the shareholders (me and you if you own stocks and shares!). You really can put your money to work for you and earn income whilst you are asleep.
As at the end of September, 2021, our investments have gone up £170,000 this year! I still can't believe this. The money we have invested over the years has continued to grow and produced a return whilst Katie and I have been travelling around the world, having fun and eating almond croissants!
We have invested our money and got passive income. This all seems too good to be true but it is possible. We achieved it and my hope with these articles is you can achieve it too. In fact it is not really a hope as I know you can. Investing can actually be quite simple when you break it all down but to start with it will feel like learning another language.
This is an incredibly exciting journey and can be a life changing set of skills and knowledge to learn. Investing meant Katie and I could retire 25 years earlier than the average person in the UK! Strap in and read the articles that follow. Work through them, watch some of the videos, learn and look up the different terms and start to work on your investing knowledge.
Passive income is possible and creating wealth relies on you creating a gap between your income and expenditure and investing the difference. First a little warning to go with the positivity!
A little bit of knowledge is a dangerous thing
A little bit of knowledge is a dangerous thing. Please do not go out there and just throw some money into a stock or share without doing your homework first. You MUST MUST MUST learn more about investing before you take action. It's great to learn about this stuff, however this comes with a MASSIVE warning. Investments can (and DO) go down in value as well as up and remember, only consider investing if you can answer YES to ALL of the following questions:
These are the steps to work through to get ready to invest. It is super important you have an emergency fund of at least £1000 before you invest. You want to have that in place so that you are protected from emergency and don't have to sell of any investments if an emergency occurs.
- Are you expensive debt free? No credit card debt. No store card debt. No payday loan debt. (anything 5% interest and above) This doesn't include mortgage debt.
- Do you have 3-6 months living expenses in cash (by cash we mean you can get to it immediately or within a couple of days MAX. So things like savings account, current account, premium bonds)
- Is the money you plan on investing for the long term (for your retirement) and you don't plan on needing the money in AT LEAST the next 5-10 years?
- Have you read Simple Path to Wealth or watched JL's Google talk?
- Have you done your own research and thinking? DO NOT blindly copy something you don't understand
These are the steps to work through to get ready to invest. It is super important you have an emergency fund of at least £1000 before you invest. You want to have that in place so that you are protected from emergency and don't have to sell of any investments if an emergency occurs.
Disclaimer
There is an important piece we need to say to you about finance and investing before we start. We are NOT financial advisers. This is NOT financial advice. You can read the full disclaimer here
We don't give regulated investment, tax or legal advice. We are never going to try to sell you anything. We don’t give product recommendations and we don’t take your money away to invest. The ideas, concepts and information on this course are simply our opinion and what has worked for us. This is not regulated investment advice. It may not continue to work for us and it may not work for you. You have to make your own decisions and do your own research. You are solely responsible for your own choices. There are absolutely no guarantees here. That being said let's get on with it!
We don't give regulated investment, tax or legal advice. We are never going to try to sell you anything. We don’t give product recommendations and we don’t take your money away to invest. The ideas, concepts and information on this course are simply our opinion and what has worked for us. This is not regulated investment advice. It may not continue to work for us and it may not work for you. You have to make your own decisions and do your own research. You are solely responsible for your own choices. There are absolutely no guarantees here. That being said let's get on with it!
Take your time
Learning this stuff can be a long journey. Take your time. Read an article, make some notes, start a new investing notebook (I love new stationary!) and just work slowly through it all. The temptation is to say "I don't understand this shit" when you come across the first difficult part.
You aren't going to understand it all right away, treat it like learning a new language, look up new words and make notes. You can do this! Right onto the sexy stuff: investing.
You aren't going to understand it all right away, treat it like learning a new language, look up new words and make notes. You can do this! Right onto the sexy stuff: investing.
The sexy stuff: investing
Step 1: What stops people getting their finances in order?
The starting place for all of this is what stopping you from sorting out your finances. First we need to consider the barriers to getting going and sorting out your finances. Read this article about the barriers that stop most people from sorting out their finances, if you think you have got these in order then move to step 2!
Step 2: What do you spend your money on?
After we have looked at the barriers to getting going let's look at what you spend your money on. How many people do you know that say "I don't know where all the money goes?!" Most people spend their money on liabilities not assets. This article will set up some of the mind set around investing that is so important. First we need to help you see that buying assets and holding for the long term is the real way to wealth
Step 3: Let's get into the detail.
Investing is a hugely complex subject with so many levels. The starting point is to work out which asset class you want to invest in; stocks and shares, property, gold or other things. The Donegans invest in stocks and shares through index funds and we explain why we do this in this article. This is a great place to start to broadly understand the categories of investments (asset classes)
Investing: Asset Classes overview - read this article next.
After we have looked at the overview of asset classes let's dive into the detail of index funds. If you read this set of articles you should have nearly everything you need to get going with investing. We haven't written about property, gold or other things because we don't do it, we are actually working to sell of our investment properties right now! Our strategy for investing is index funds all the way baby!
We wrote a series of 7 articles that explain in detail why and how we invest in Vanguard index funds.
Katie and my latest article is analysing ESG funds. If you have ever been tempted to invest then read this first. ESG Funds: Behind the scenes of ethical investing
The starting place for all of this is what stopping you from sorting out your finances. First we need to consider the barriers to getting going and sorting out your finances. Read this article about the barriers that stop most people from sorting out their finances, if you think you have got these in order then move to step 2!
Step 2: What do you spend your money on?
After we have looked at the barriers to getting going let's look at what you spend your money on. How many people do you know that say "I don't know where all the money goes?!" Most people spend their money on liabilities not assets. This article will set up some of the mind set around investing that is so important. First we need to help you see that buying assets and holding for the long term is the real way to wealth
Step 3: Let's get into the detail.
Investing is a hugely complex subject with so many levels. The starting point is to work out which asset class you want to invest in; stocks and shares, property, gold or other things. The Donegans invest in stocks and shares through index funds and we explain why we do this in this article. This is a great place to start to broadly understand the categories of investments (asset classes)
Investing: Asset Classes overview - read this article next.
After we have looked at the overview of asset classes let's dive into the detail of index funds. If you read this set of articles you should have nearly everything you need to get going with investing. We haven't written about property, gold or other things because we don't do it, we are actually working to sell of our investment properties right now! Our strategy for investing is index funds all the way baby!
We wrote a series of 7 articles that explain in detail why and how we invest in Vanguard index funds.
- What is diversification?
- What is an index fund?
- Which index fund should I invest in?
- Decoding the Vanguard website
- The impact of fees on investments
- The battle of the titans: Vanguard Developed world ex UK versus Vanguard FTSE Global All Cap
- Just get going. How to start investing today
Katie and my latest article is analysing ESG funds. If you have ever been tempted to invest then read this first. ESG Funds: Behind the scenes of ethical investing
Tracking
What gets measured gets improved! Katie and I track our investments and net-worth on a monthly basis! We do this because it helps us to focus on improving our finances, helps us to stay on top of them and brings us together as a team to focus on our goal. A Critical step to being on top of your finances is tracking them and talking about them.
We wrote an article to show you how to track your different accounts and pensions and work out your net-worth. We also made you a spreadsheet template which you can download for free from here. You can read it here: How much are you worth? Guide to working out your net-worth
We are working on a second article all about running a monthly finance meeting that will come soon.
We wrote an article to show you how to track your different accounts and pensions and work out your net-worth. We also made you a spreadsheet template which you can download for free from here. You can read it here: How much are you worth? Guide to working out your net-worth
We are working on a second article all about running a monthly finance meeting that will come soon.
Target
You can't hit a target you can't see! The entire financial independence movement is built on the 4% rule which has a lot of controversy around it. I spent a long time going back to the original research to understand it for myself and put it all in an article for you.
How do you know how much it will take to retire? If you can work this out it give you a target to aim for. Then I wrote a second article answering as many of your questions about it as I could. 4% rule questions and details.
Reading these two articles should give you enough to set a target for your investments.
How do you know how much it will take to retire? If you can work this out it give you a target to aim for. Then I wrote a second article answering as many of your questions about it as I could. 4% rule questions and details.
Reading these two articles should give you enough to set a target for your investments.
Other resources
Here are three other resources we recommend
- There is a huge financial independence movement around the world. If you are in the USA it is EASY to find. Just start googling! In the UK it is a bit more underground so I wrote a guide to help you find your fellow FI people and investors. Guide to The FIRE movement in the UK
- The Rebel Finance School and Facebook Support group. Katie and I run a course called the Rebel Finance School once a year. Read more about it and sign up if you like to find out about the next dates. The course also has a Facebook support group to go with it where you can ask questions after reading the above articles. There are some wonderful super geeky people like Katie and I in the group that love nothing better than chatting investing and money!
- Introduction session. Katie and I are running an introduction to Rebel Finance School session on the 19th of October, 2021 at 8PM UK time. You can watch it here live or come back later to find the recording
|
In fact there are so many resources out there to get going you just need to start reading, listening and learning. If you do that you will be amazed at the progress you make over the coming months!
It can be an overwhelming journey learning all this but you just need to start learning, listening and get going. |
|
Feeling overwhelmed?
I know there is SO much to learn but you can do it! I believe in you. If you are feeling overwhelmed by the amount of content, or the fact you are only starting in your 40s or 50s or just the words in the article then I wrote this next one for you. Read this next. The Insurmountable Mountain!
