The London Stock Exchange and Bank of England have joined hands to improve financial literacy. And the problem is huge. The Bank of England reports that over a trillion pounds sits in bank accounts earning nothing.
So you spent your life working hard to earn your money, only to have it not work hard for you.
And this matters is people in their 40s, 50s, 60s are not to be poor pensioners. Or if those working hard now in their 20s and 30s are not to throw away their hard won savings thinking house prices will bail them out because of rose tinted memories of their grand parents in the 1970s and 1980s.
It also matters because financial literacy promotes financial inclusion and social mobility. You would think technology would make things easier. An app here to save and an app there to invest. But apps and technology are not suited to tasks where people want to speak to someone.
A lady, who is a carer, emailed me this week how one pension advisor told her that her pot was too small for his firm so he would not pick individual stocks for her and the other choice, and online brokerage, just gave her three buckets (low, medium, high risk) and a bunch of other funds.
She was savvy enough to know its individual stocks not expensive funds run by fund managers that would be the key to her success. So she started on the journey of teaching herself.
These were the key things we discussed on the call and my top tips to her.
You can buy US stocks from a UK online broker
Do use the ISA or SIPP (but SIPP locks up money) if you have a lot to invest as it will be in a tax free wrapper. Else a normal account is fine.
You can put US shares in a SIPP and ISA
You can buy and its probably better to buy big names you recognise like Microsoft than journalist tips
Try hold for 12 months then review unless the stock falls 25% from its peak since you bought it – that’s a personal rule
It’s easy to open an online stock broker account.
No stock is as safe as a bank account. Not even the ones I own like Paypal, Apple, Microsoft, Amazon, Square, Zoom Communications.
I filter and look for the best of the best 15. No one factor eg media buzz, fad, price is of itself a negative. Yes I look at technical factors such as cashflow but if you don’t know how to do this on free online tools like Yahoo Finance then that’s fine
Don’t fall for journalist headlines talking stories about the next big thing. That’s their job. Don’t take stock tips from a journalist and don’t take driving lessons from a non-driver.
I’m committed to improving financial literacy. I started when I was 12 to invest. I’ve made my international best selling book free to Asian Voice readers. It’s called Investing Unplugged and will teach you all you need to know. You can get it here: https://www.subscribepage.com/investingunplugged (I don’t mind missing out on author royalties!)
