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Ever daydream about winning the lottery and what your life as a millionaire would look like? Or is that just me? Depressingly, the odds of winning stand at 1 in 45 million, and there is apparently more chance I’ll become a saint, find a four-leaf clover, or be crushed by a meteor. But I can still plan for a millionaire’ future…
Because what’s one thing all the wealthiest people in the world do? Invest. Whether it’s in stocks, real estate, or other assets, their money is usually somewhere making more money for them. So, my money should be making more for me too – you don’t have to be wealthy to start investing.
“The most important quality for an investor is temperament, not intellect.” — Warren Buffett
Investing is key to building long term wealth. And with all the different apps, platforms and websites available, you don’t need a lot to get started. New investors can begin with as little as £10. And it’s smart to start ASAP. Because no matter how much (or little) you’re investing, time will help it grow, thanks to our ‘friend’ compounded returns.
You can start investing with very little, but you also want to invest as much as you can. To figure out what that amount might be, check in with your budget. Once all your living expenses and necessities have been taken care of, what do you have left for fun and future finances? Because while fun today is important, remember, in the future you will want to have fun too. Another good rule of thumb is to only invest money you don’t expect to need in the next five years or so – shorter-term savings can be put into cash.
A well-diversified portfolio is key. That is, a healthy mix of different types of investments to up the chances that you’re always holding a winner. Aka, not putting all your eggs in one basket.
New investors might consider a multi-asset fund such as Jupiter Merlin Income Portfolio. And if you want your investments to do good while they’re (hopefully) doing well, consider sustainable or impact investing, with a fund such as Liontrust Sustainable Future Global Growth. Think of it like voting with your investment dollars.
Investing in things you know and understand is another great way to feel more connected with your investments and keep a keen interest. With household names like Microsoft and Visa in its top 10 holdings*, Morgan Stanley Global Brands is an option. Likewise, Schroder Asian Alpha Plus has over 33%* in technology stocks with big names like Samsung, Alibaba Group Holding and Tencent Holdings. Looking to stick closer to home? Janus Henderson European Focus has holdings in Nestle and ASML*, one of the largest semiconductor suppliers in the world.
*Source: fund factsheet, 30 April 2022