Setting up a home after marriage break up and buying a rental property made putting any money aside an impossibility for a while. That was a situation that I was very uncomfortable with. I like to have a bit fat comfy financial cushion behind my back in case of emergencies and, more importantly, to help me realise future dreams. After saving shouldn't just be for rainy days but the nice times too. Back in October last year it became clear that I was in the fortunate position to make regular monthly savings again. As you're all probably aware, interest rates for investor are pitifully low at the moment so I decided to invest in stocks and shares.
My financial risk profile is high. You can measure yours by following the link here or doing your own Google search. This isn't the type of approach for someone who'd lose sleep every time the stock market fluctuated. Having said that I'm prepared to take chances which are analogous to getting into a Formula 1 racing car from a driving point of view, I want to demonstrate that I do that in a measured way, to reduce the impact of those risks.
I've chosen to save into a stocks and shares ISA, that allows me to put £11,880 yearly into a tax efficient pot. I'll never pay capital gains tax on the profit when I sell shares and dividend payments are capped at 10%, useful if ever I become a higher rate taxpayer. The Money Saving Expert has a useful guide describing this type of product and its pros and cons. My account is with Hargreaves Lansdowne, one of the biggest online stockbrokers. They're not the cheapest but offer a range of services that make my dealing decisions easier like real time trading, a phone app and very comprehensive information about individual shares.
Right that's the nuts and bolts. Tomorrow I'll tell you a bit more about share dealing and my own individual strategy.