FIRST STEPS
So now you are about to take off.
Firstly, set aside some time to do some pre-work.
This cannot be done in the time between afternoon tea and dinner so book at least 3-4 uninterrupted hours in a quiet place with access to a PC with Excel and Internet connection.
Ready? Then let's move on to Budgeting.
BUDGETING
Investing is about making a financial commitment.
However, first you will need to know how much you can commit to every month. This should be money that is not required or will not be demanded in the short term.
To understand your incomings and outgoings better, create an Excel file and call it Budget.xls. The RESOURCES tab will have a copy you can download and use as a template for free.
Carefully, list ALL your incomings and outgoings (be brutally true to yourself as this file will not be seen by anyone else).
OPTIONS
Once the budget file has been updated with values, the Discretionary indicator will highlight the monthly margin.
Your options will depend largely on how much disposable income you are able to put towards investment.
If you find out that your outgoings are higher than your incomings, then you will need to make some adjustments to ensure you can free up at least £25 per month. Note, £25 is the minimum required for most investment platforms.
CHOICE
Once you have identified that your Budgeting process allows you to invest £25 (hopefully a bit more but it is not essential), then the next step is to make a choice of where and how to invest the £25 pm.
At this point you will need to open an Individual Savings Account (ISA). You must be 18 or over and be resident in the UK.
An ISA is a tax efficient wrapper that will ensure that any gains from your investment are completely free from tax.
NEXT STEPS
The safest choice is to invest in a broad based full market Index Tracker with ultra low fees and ease of access.
You can research a few companies that offer this - JarInv will mention a few pros and cons of each.
Once you decide to open an ISA, the maximum you can invest into it is £20,000 per year which is probably enough for most.
The Government limits this amount as it does not receive any tax of any capital gains within the tax efficient wrapper.