Investing is like, mega confusing. And if anyone tells you it’s not, it’s mostly likely because they wear quarter zips into the office and enjoy games of clay pigeon shooting on the weekends. But the thing is, it doesn’t have to be super boring and complicated. And while I might not seem to be the most capable teacher—particularly considering the fact that I tend to prioritise the shape of my acrylic nails over my assets portfolio—I’ve got this one figured out.
Welcome back to Explained By a Blonde, a SCREENSHOT series where I, your resident blonde, take difficult or hard-to-understand topics and magically transform them into bite-sized nuggets of knowledge. While I’ve been more at ease getting you all a refund from your universities and warning my fellow shopaholics about the dangers of Klarna, explaining investment to fellow gen Zers might be my trickiest challenge yet.
Anyhoo, strap on a pair of your most serious-looking glasses and let’s get going.
Investing is basically the process of putting money into something or buying something with the aim of getting a profit in return. You’re inherently setting certain money aside in hopes that, in the future, it’ll increase in value. It’s kind of like getting Botox.
Of course, there are no guarantees in investing. There’s always a risk that you could lose money. However, if you’re smart about it and start early, then you have a genuine chance of racking up some impressive wins.
It’s completely up to you how much you choose to invest. I think there’s a massive misconception that in order to get involved with investing you need to have an easy £3,000 lying around—that’s just not the case. And, if you’re anything like me, a 20-something-year-old who spends her days worrying about rent payments and water bills, it’s quite intimidating feeling as though you’re never going to be able to get on the investing ladder.
Don’t stress though, if you are considering getting into investing, you can start yourself off with small lump sums: £50 or maybe £100 if you’re feeling boujee that month. The point is, there’s no ‘right’ amount of money to start off with.
Now, for anyone who wants to start off in the investing game, you need to be aware of two key terms: shares and funds. I personally like to remember them by thinking about Cher and Fergie.
The main difference between these two terms is that when you buy a share, you’re effectively buying a small stake in a particular company. However, when you buy a fund (or, as some people call it, mutual funds) you’re buying a mix of different investments.
The thing to remember is that if you become a shareholder in a particular company, your investment is reliant on that company’s success rate. If the company does badly, you might see a loss. When you buy a fund, however, you spread yourself across a number of different investments, meaning that you’re minimising the risk of being left heartbroken with all your money down the drain.
Investing is realistically all about risk. If you’re starting off, you’re going to want to invest small amounts in ‘safe’ options. In other words, start slow, okay? You have time. It’s not like you’re a millennial or anything.
While there’s no right way to pick your stocks, I can provide you with a basic guide regarding how you might want to go about it. Some of the most popular stocks include: Tesla, Apple, Uber, Airbnb, and Peloton.
Investment apps can be really intimidating, particularly because their colour schemes are usually really ugly. But, nevertheless, we need to get our bread somehow, which is why I’ve done some research and listed these five apps as the easiest ones to use as a beginner. Plus, some of them have fun names.
Do some research, pick some safe options, and just wait to see what happens. The more you tinker about with it, the more you’ll feel like a proper finance babe. Now, go get investing, boo!