Archive | January, 2013

DIY Investor

28 Jan

From January 2013 investing in the UK changed. No longer can you seek free advice from a financial planner or bank. We’ve now moved into the era of the DIY Investor.

In the past if you wanted to save some money on a regular basis you could ask a financial advisor or your bank for their advice. They didn’t charge you directly for the service instead receiving commissions on any products they sold. As a result some customers who thought they were receiving the best independent information were instead receiving information based on the highest commission rates payable on a product. This has now changed and any financial advisor must charge their customer an up front fee for services supplied.

Recent research carried out by some daily newspapers found that many financial advisors are not interested in a customer unless they have in excess of £60,000 to invest. They deem them as non viable customers.  Banks were a little better, requiring customers to have £50,000 plus to invest before providing investment advice. Up front fees varied from £500 fixed sums to a percentage based fee starting at around 2.4%. The new changes means that anyone wanting to save a small regular sum of money must now rely on their own research and information. You have just become a DIY Investor whether you want to or not.
DIY Investors shouldn’t panic. Remember, there are many people who ignored the banks and financial advisors and found their own path to financial success. These investors often share their success with anyone willing to learn. Usually, for less than £10 you can buy books written by many successful investors detailing how they built their wealth. Just adopting one idea from a book can change your life forever. Subscriptions to magazines or newsletters can provide up to date information about market trends or research into individual investments. Subscriptions can vary in cost but are usually available for less than £5 a month. Seminars are another source of information although they vary in price. Some are free, others cost from £20 up to thousands of pounds for a weekend. There is a wide range of websites offering information and advice from Government Websites to sites such as this one. As a DIY Investor there is a wide range of information available. You just have to be willing to grab it and use it.

Karen Newton is the author of several investment books which are available in paperback or digital format through Amazon books.  She also runs a subscription newsletter called Beginners Investment Club (BIC) More information is available at


Investment Categories

22 Jan

Over the last five years Britain has had two recessions and is on the verge of an unheard of triple recession.  Understanding the different types of investment categories is the key to building a balanced portfolio that can weather most economic storms.

In previous blogs we have covered investment cycles where one type of investment can be in a growth period while another is in a decline.  Balancing your investment portfolio doesn’t stop your investment from going down but it does help to counter balance the ups and downs.

In my opinion there are four types of investments.  The aim is be active in each investment category.  The four categories are Cash;  Paper;  Property and Business.

Cash – this is having some money set aside in Bank Accounts, ISA, Treasury Bonds, Gold and Silver etc.  It is money that can be accessed quickly in an emergency.  As you build up savings in Bank Accounts it is worth remembering that each financial institution i.e. Barclays, Lloyds, HSBC and so on provide a government guarantee up to £85,000.  Treasury Bonds will guarantee your money  up to £1 million.  Gold and Silver bullion can be used as cash through various specialist accounts or sold quickly for stirling.

Paper – shares come under the paper category.  You purchase a share in a company in return you hope to increase the amount you hold through capital gains and receive interest on your investment through dividends. 

Property – investment property is the purchase of residential or commercial property.  Income comes from the increase in capital value and rents.

Business – is the last of our four categories.  Building your own business is an investment of your time and money.  The business should provide you with an income.  If successfully built it will provide something to sell, franchise or list on the sharemarket for even greater returns.

By ensuring you are in all four investment categories you build a safety net around your finances which will help you survive any recession or economic storm.

Getting Started

15 Jan

With Christmas a distant memory and New Year celebrations long gone how many of your New Year Resolutions have also seen the dust?  It’s a sad fact, we all have the best intentions to begin something new, be it losing weight, being healthier or simply starting an investment then the but …. gets in the way.  I’m sure you know all the excuses and if you are like me used most of them at one time or another.  In reality it usually comes down to just two either being too scared to get started or too lazy to get started.  Fear of the unknown keeps many people from getting started.

Did you know?  We are already half way through January.  We are 3 weeks into 2013 with only 49 weeks to go until 2014.  Sleeping for 8 hours a night is equivalent to 17 weeks a year.  You work for 8 hours a day that’s another 17 weeks gone. If you watch TV or play on a computer for 4 hours a night that’s equivalent to another 8 weeks a year.  Sleep, work and television have taken up 42 weeks of the year.  Don’t forget shopping, eating and socialising.   You are already in week 3 of the New Year so you now have less than ONE week left from the whole of 2013 to sort out your investments for the year.  What are you waiting for?  Let’s get started……

Here are some ideas to get you started.

  • Open a Stocks & Shares ISA
  • Set up a weekly standing order to fund the ISA account
  • Research shares to invest in or buy your research
  • Find a property to invest in
  • Talk to a broker about financing the project
  • Start a business