Advice For Young Investors
To many young investors, getting financial advice seems like one of those things somebody much older would do, and in many cases you’re right – but it doesn’t have to be that way, and it could be a smart move to get involved earlier!
With an estimated 1/5th of under-35’s believing they will NEVER be debt-free, arguably due to higher costs of living than those experienced by previous generations, it’s all too easy for potential young investors to become disheartened, turning the prospect of never becoming debt-free into a self-fulfilling prophecy.
At MacFarlaine and Brooks, we tell a different story based on our own wealth of experience, helping Young Investors make the most of what they have now, sowing the seeds of future financial success early to make for some mighty pay-offs later in life.
Stage 1: Money Management & Suitability
The first thing about advice for young investors is working out what you can afford now. This means that the very first thing our advisers can help you do is look at your budget, your incomings and outgoings, your living expenses – everything that could matter to you.
Then we look at what quality of life you’re happy to live with now to help you generate wealth for later in life – wealth that can help you out when it comes to your first steps onto the property ladder, further education or setting up your first business.
That gives us your potential spare capital figure, and dictates what options we can present you with based your on suitability for them.
We take everything into consideration, including what you intend to use the money for later in life, whether you need instant access to the capital in the investments, and what kind of risk you are comfortable having your money exposed to (Rule No1: ALL investments carry a degree of risk – it’s how you manage that risk that’s important).
In short, we’ll help you access where you stand as a potential investor and saver, work out what options you have, and then suggest a scheme that’s in your best interest and that you understand thoroughly.
Stage 2: The Right Savings and Investments
As well as pensions (which we can get to later), savings and investments are our speciality at MacFarlaine and Brooks, and that speciality extends to our youngest clients too (not just those with established wealth and assets).
We believe in giving young investors the knowledge and services they need to get their initial savings and investments off the ground early. It’s simple maths really, but in most cases, the longer you save and invest for, the longer your profits have time to grow, leading to bigger profits over your life-span than if you only start investing in your late 30’s, 40’s or even further into the future.
MacFarlaine and Brooks is a full-service IFA (Independent Financial Adviser). That means that we aren’t attached to a singular bank, building society, investment scheme or broker, but instead we have full market access to the range of investment and savings schemes on the market.
That being said, this doesn’t mean that we’ll always offer you the schemes with the highest interest rates or projected returns – that would be irresponsible in a lot of cases, as with higher projected returns often come increased risk which you may find unacceptable.
Instead we suggest investments and savings schemes that you can comfortably manage, usually regulated by the FCA and therefore protected by the FSCS compensation scheme should anything go wrong, meaning your smart-savings scheme.
Stage 3: Achieving your goals
While some young investors simply feel better about life with a steadily growing pot of savings or a stable investment portfolio behind them, others have specific targets in mind for their savings and investments.
We think that’s great! Whether it’s finally upgrading to a new car, saving for your first home, a wedding or for further education, we can help you access that goal and form a realistic plan of action to help you achieve it, working to a rough time-scale based on the delivery of returns and the length of time needed in the scheme to get them.
With M&B, we can create bespoke savings plans for:
- Marriage Savings Plans
- University Savings Plans
- First Car Saving Plans
As well as more general schemes such as:
- ISAs (Individual Savings Accounts – tax efficient)
- Regular Saving Plans (RSPs)
- Loans to help you achieve more immediate goals
Having a clear goal in sight can often be the best way to help you save too. It’s nice to imagine a big pot of money, but money is just the vehicle you need to get what you want. But if you see that savings account or investment portfolio as a house, a graduation picture on the wall or a drive to the beach in your new car, you may find your efforts become more focused, making you more likely to achieve those goals that matter to you the most.