Interest rates on savings are very low at the moment and inflation is rising. So any money in traditional savings accounts is actually losing money in real terms. Money invested in the stock market however, can actually beat inflation and give you a positive return. So why do so few people invest? One reason is possibly that it is seen as complex, expensive and only for the rich; with large sums involved and expensive trading fees through stock brokers. But that isn’t the case anymore as with the rise of modern technology it is now easier to invest than ever before. If you have a smartphone and £100 you can start investing now. Let’s look at two examples. The first is Freetrade. As it’s name implies there are no trading fees through Freetrade. On its basic plan there are no costs whatsoever. They do have other plans that you can move to with a small cost that give you additional benefits. But as a new investor, the basic plan is sufficient. Freetrade allow you to purchase shares and ETFs (exchange traded funds), which are essentially a ‘basket’ of shares with a common theme. This is all done through an app on your phone and it’s all pretty intuitive. I have been using Freetrade for over a year now and it works really well. As you can see below, the return over the last year has easily exceeded a traditional savings account (although there has been more growth than usual following a drop in the market at the beginning of the covid pandemic). If you do decide to sign up to Freetrade you can get a free share worth between £3 and £200 if you use my link below. For transparency I will also get a free share worth between £3 and £200. Check out Freetrade The second investment platform I want to look at is Invest Engine. This one is slightly newer than Freetrade and works slightly differently. Nonetheless it also is very easy to use. Invest Engine don’t currently have any individual company shares to invest in but instead focus on ETFs. They have a select range of around 350 ETFs covering a range of markets and you can either self select which ones you want to invest in or for a small fee (0.25%) they will select for you and monitor/adjust as necessary.
Because Invest Engine are currently growing their customer base, they have an attractive offer for new investors. When you open an account they give you £50 to invest. This gives you a no risk opportunity to learn how the platform works. Once you are happy you can then invest £100 of your own money and if you keep this on the platform for a minimum of one year you get to keep the original £50. On top of this, if you use my link below you will get an additional £25 referral bonus. So for a £100 investment you get £175 without any market movement added in! A new feature just added to Invest Engine is the ‘Analytics’ tab. Here you can see how your money is invested across sectors and regions as well as individual companies. I really like this new feature which really helps you 'diversify' your investments around the world and across different sectors.
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