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Today I’m really excited to post another interview on this website! I had the honour of interviewing Michael from FoxyMonkey on the subject of investing for university students in the UK. I wanted to talk to someone who had experience and who could give actionable advice to students, so I hammered him with questions and overall got a good step by step guide for beginner and broke students to get started with investing. Pretty cool.
Related: WTF is Investing?
Michael comes from Greece and went to study at Edinburgh University (my city’s uni yay) and is now in London working in Computer Science. His blog, FoxyMonkey, is mostly a hobby where he writes about investing and matched betting as a side hustle. Overall, a very nice guy with some interesting thoughts on Financial Independence and how to take control of your money.
The recording didn’t really work out (next time it will be in podcast form), so I simply wrote out the biggest takeaways from the interview and presented it into actionable steps to start investing NOW.
Related: Start Investing in the US
1. Start educating yourself
If you’ve read other articles on this blog, you’ll see the large reiteration. Education is key to getting started. This can be done through books, blogs and courses. Take action, be proactive and start learning about money. If schools won’t help us, then we must help ourselves.
- The Richest Man In Babylon
- Rich Dad Poor Dad
- The Four Pillars of Investing
- The Millionaire Fastlane
- Smarter Investing
2. Live the right lifestyle
This means implementing the right money habits and being conscious about your spending. Michael puts it perfectly: Spend less than you earn and invest the surplus. Start with doing a budget and implementing good money habits.
3. Choosing what to invest in
Once your money is sorted it out, it’s time to actually get started. Michael recommends using passive/robo platforms because of low fees and simplicity. This means: index funds. If you decide to go stock picking (buying 50 shares of Apple, for example) you’ll be competing against experts and people who know way more than you. With index funds, you’re with everyone else. It might be boring, but it keeps the fees low.
What is a robo platform? These are platforms that invest your money into the entire market through a robot. No one is managing your money, just a computer that makes sure you have the right percentage of stocks and bonds. It’s not risky and gives better returns than mutual funds. Learn more about them here.
4. Sign up to a platform
In the UK, you will be investing through a Stocks and Shares ISA. You can invest up to £20,000 in one year absolutely tax free.
- Go to moneysupermarket.com and compare the different Stocks and Shares ISA
- Choose the one that bests suits you: low fees, low trading fees, etc.
- Percentage based fees may be cheaper if you’re not going to invest a lot. A fixed amount is better for larger sums.
- Hargreaves Lansdown: one of the best but expensive
- Halifax: what Michael uses, but minimum entry is £500
- MoneyFarm: What I’m using, minimum is £1
- What’s your risk appetite? Robo advisors will ask you whether you’re an ‘adventurous’ investor or more of a ‘conservative’ investor. From this the computer determines the percentage of stocks vs bonds in your portfolio.
All you need is a photo of your passport and proof of address (bank statement, for example). Verify your account and you’re set to go!
5. How much to invest?
Michael says the most important is to get started. No matter if it’s £10 or £100, getting started will get the ball rolling and make time. After that, keep it consistent. How much could you put away each month? Even if it’s just £10, make sure you stick to it.
Pay yourself first: Set a percentage of your income every month to put away for investing. The minute you receive your monthly income, whether from a paycheck, parents or a loan, try to put at least 15% of it into your ISA. You’ll thank yourself 10 years later when your capital has increased by 7% every year.
You’ve now planted your own money tree. Pretty fantastic I’d say.
Keep your emotions in check. Don’t start removing money the minute you hear bad news about the market. Train your emotional and financial intelligence to learn how to manage external factors and people’s advice. Be the one in control, the one who knows what’s happening.
6. Keep working on your finances
You’re now an investor. Woohoo! Not many college students can say they’re investing in the stock market, so kudos to you. But you can’t stop now! This is just the beginning. Keep reading books and blogs, and educating yourself about money. Work hard to stay out of debt, earn more income, decrease expenses and invest more. What you invest now, will save you later.
What’s great about investing is that not only can you now tell people ‘yep, I’m an investor’, but you’ll start getting excited about other parts of your financial life. The financial world may seem complicated and full of strange words like ‘equity’ and ‘venture capitalism’, but really it’s just used to confuse people. People are scared of finances because they don’t understand them. You don’t want to be one of those people, so make it a mission to understand your finances. Do this by practice:
We talked with Michael about the concept of Financial Independence and how being financially free is all about happiness and being able to do what you want and enjoy in life. If you work hard at improving your finances now, you’ll be able to manage them forever. And taking control of your money means making work optional, means not worrying about your financial situation, means actually enjoying your money. Imagine yourself in that position for a second… why say no to that?