{"id":1567,"date":"2017-03-02T13:31:04","date_gmt":"2017-03-02T13:31:04","guid":{"rendered":"http:\/\/frugalstudent.co.uk\/?p=1567"},"modified":"2017-09-27T00:17:19","modified_gmt":"2017-09-26T23:17:19","slug":"investing-at-uni","status":"publish","type":"post","link":"http:\/\/frugalstudent.co.uk\/index.php\/2017\/03\/02\/investing-at-uni\/","title":{"rendered":"Why and how I invested \u00a313,000 whilst at uni."},"content":{"rendered":"

\"\"<\/p>\n

<\/p>\n

As students we have to worry about many things.<\/p>\n

Money, coursework, exams, job prospects, placements and way more. I get it – the last thing on your mind is investing in the stock market.<\/p>\n

But, now is the perfect <\/b>time to start investing.<\/p>\n

Why and how? Keep reading.<\/p>\n

In this article, I’m going to show a worked example of investing young and what it can achieve. I’m also going to show you step by step<\/strong> EXACTLY how to open a Stocks and Shares ISA and how make your first investment.<\/p>\n

Sorry if I\u2019m sounding like a nagging parent here but let\u2019s face it – there probably won\u2019t be a state pension by the time we retire.<\/p>\n

We’re the first generation to have to pay \u00a39,000 tuition fees, our childhood was ruined by the 2008 market crash and we’ll never own property in central London! We may as well get screwed as pensioners too!<\/p>\n

Even if things stay as they are we won\u2019t be able to get a penny until we’re 68!<\/p>\n

Call me a conspiracy theorist, but I think there\u2019s a reason the government set up the mandatory workplace pension scheme!<\/p>\n

Anyway, I recently got talking to Neil from P2P blog<\/a> and he came across an example of the importance of investing young.<\/p>\n

You won’t believe the results!<\/p>\n

Say we have two investors;<\/p>\n

Investor one<\/strong> puts away \u00a32,000 a year from the age of 26 to 65. That’s \u00a380,000 total.<\/p>\n

Investor\u00a0 two<\/strong> puts away \u00a32,000 a year between the ages of 19 and 25 – \u00a314,000 total – then did NOTHING after.<\/p>\n

Who do you think generated more interest? It has to be investor one right, he put in WAY MORE money!<\/p>\n

NOPE – IT’S INVESTOR NUMBER TWO!<\/b><\/p>\n

At age 65, investor number one\u2019s \u00a380,000 total investment has grown 11 fold and stands at \u00a3894,704, less the \u00a380,000 he put in.<\/p>\n

At age 65, investor number two\u2019s \u00a314,000 investment has grown 66 fold and stands at \u00a3930,641, less the \u00a314,000 he put in.<\/p>\n

So why does this happen?<\/p>\n

Compounding<\/b><\/p>\n

With \u00a314,000 invested at age 25, investor two’s money has already started it\u2019s compound interest journey, ballooning to \u00a320,000.<\/p>\n

On the other hand, investor one doesn\u2019t reach the same investment input until he\u2019s 32. By then, the damage is already done.<\/p>\n

Just take a look at the example;<\/p>\n

\"\"<\/p>\n

Credit: https:\/\/twitter.com\/Calculators4You<\/a><\/p>\n

I\u2019d hate to be investor one here. My \u00a380,000 investment only just catches up with investor two at 64!<\/p>\n

So the question you have to ask yourself is, who do you want to be? Investor one or two?<\/p>\n

I took the decision to be investor number two four years ago. Investing at uni is the best thing I ever did.<\/p>\n

Right, so you’re interested in investing but you have two main problems;<\/p>\n

i) You don’t have any money to invest
\nii) You don’t know how to invest<\/p>\n

No problem – here are the solutions.<\/p>\n

You don’t have money to invest<\/b><\/p>\n

Right, so you’re probably thinking “I don’t have a spare \u00a32,000 to invest every year”<\/p>\n

That\u2019s fine.<\/p>\n

ANY amount you can invest during your time at university will work much harder than any money you can manage to invest when you\u2019re older.<\/p>\n

You\u2019re better of investing \u00a3100 now than \u00a3500 when you\u2019re 50!<\/p>\n

You can even make investments from just \u00a325 <\/strong>a month without paying any purchasing fees and I’m going to show you how.<\/p>\n

I’m sure you can miss one night out a week, a few coffees here in order to free up \u00a325 a month.<\/p>\n

How to make your first investment (STEP-BY-STEP)<\/strong><\/p>\n

Step 1: Open an account<\/b>
\n<\/b>
\n<\/b>Click this link<\/a> (Not an affiliate link – I don\u2019t want to make money, I just want to help)<\/p>\n

Here’s what you’ll see;<\/p>\n

\"\"<\/p>\n

Click on \u2018Open an ISA\u2019<\/p>\n

Then click on Open an ISA again.<\/p>\n

\"\"<\/p>\n

Then press the big green button!<\/p>\n

Step 2: Fill in your details<\/b>
\n<\/b>
\n<\/b><\/p>\n

After you’ve filled in the usual details you’ll see a box asking you to add money to invest.<\/p>\n

Click on Select \u2018set up regularly monthly payments\u2019<\/b>
\n<\/b>
\nTIP: If you don’t know your national insurance number you can find this on your student loan account information page.<\/p>\n

\"\"<\/b><\/b><\/p>\n

 <\/p>\n

Put in your direct debit details and an amount you can afford to invest every month. The more the better but keep it affordable!<\/p>\n

Next, you’ll be asked where you want to invest this money – Click on add a fund and you should see a drop down menu.<\/p>\n

It\u2019ll look something like this; (mine may look a bit different as my account is already set up)<\/p>\n

\"\"<\/p>\n

Select ‘HSBC Global Asset Management (UK) Ltd from the drop down menu.<\/p>\n

\"\"The you’ll see a ‘Select fund’ drop down menu appear. Click on ‘FTSE 100 Index (Class C Accumulation)<\/p>\n

Click next and we\u2019re good to go.<\/b><\/p>\n

If you get asked what to you’d like to do with income click on ‘automatically reinvest’.<\/p>\n

\"\"<\/p>\n

You\u2019ll now be investing evenly into the top 100 companies in the UK every month.
\nYour direct debit will be charged on the 4th of every month. Funds will be invested on the 10th of every month.<\/p>\n

The only fees you’ll pay are;<\/p>\n

0.18% of your investment as an annual fund fee .
\n0.45% of your investment as a platform fee.<\/p>\n

There are many different decisions you can make regarding the funds you select but I\u2019ve opted to keep things simple just to get you invested.<\/p>\n

The fee you selected above is a bog standard, no frills, low fee tracker fund. To give you an idea of the returns you can expect, the FTSE has returned an average of 6% a year over the past 100 years.<\/p>\n

Once you\u2019ve set everything up, you\u2019ll get a few forms in the post. Read them, sign them and send them back. They even give you a prepaid envelope! Easy.<\/p>\n

My biggest piece of advice is to forget about your monthly investment from now on and treat it like a bill. Come back to it in 30 years and be proud of what you\u2019ve achieved!
\nIf you have ANY questions, tweet me: @LewysAron<\/p>\n

And make sure you download my eBook ‘Where to invest money in 2017’<\/a> to learn about other investment methods!<\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"http:\/\/frugalstudent.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/1567"}],"collection":[{"href":"http:\/\/frugalstudent.co.uk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/frugalstudent.co.uk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/frugalstudent.co.uk\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/frugalstudent.co.uk\/index.php\/wp-json\/wp\/v2\/comments?post=1567"}],"version-history":[{"count":9,"href":"http:\/\/frugalstudent.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/1567\/revisions"}],"predecessor-version":[{"id":1758,"href":"http:\/\/frugalstudent.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/1567\/revisions\/1758"}],"wp:attachment":[{"href":"http:\/\/frugalstudent.co.uk\/index.php\/wp-json\/wp\/v2\/media?parent=1567"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/frugalstudent.co.uk\/index.php\/wp-json\/wp\/v2\/categories?post=1567"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/frugalstudent.co.uk\/index.php\/wp-json\/wp\/v2\/tags?post=1567"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}