10 ways you can do more with better investment habits in the new year
Please note this blog post was published over 12 months ago and so may not include the most up-to-date information, for example where regulation around investing has changed.
Did you know that it’s simpler than you might think to become a more effective investor?
Unlike other new year resolutions, investment habits are relatively easy to improve upon and stick with. Consider the following fixes to start doing more with your money this year.
1. Focus on your goals
Investing starts with a goal and if you keep that goal in mind you are more likely to be motivated towards putting money into your investment. Spend time visualising the goal, picturing where you’ll be and how you’ll feel.
2. Log in in regularly
At the very least, make 2020 the year where you log in to your investment account more regularly. From there you can develop the awareness around how your investment is performing and whether you’re on track to reach your investment goal by your target date.
3. Top up when you can
Investing is like going the gym, every little bit of effort makes a difference. If you’ve got a bit of extra money in the month, why not put this into your investment? Little and often investing can add up to significant amounts with the power of compound growth over time.
By using our world-first impulseSave® technology, you can add from £1 a time to your investments and make real progress towards your goal.
4. Automate your investments
One of the most effective ways you can stay committed to investing throughout 2020 is to set up a direct debit into your investment.
This also means you’ll be making the most of pound cost averaging and compounding returns.
By automating a set amount to go into your investment at the start of the month, as soon as you are paid, you are also getting into the habit of paying yourself first by investing that money now for it to potentially come back to you with greater value in the future through growth in your investment.
5. Look at increasing your Pension contributions
Could you increase the percentage of your pay which goes into your Pension? This is one of the most tax-effective ways of doing more with your money.
Develop the habit to review these contributions regularly, putting more to your Pension when you can.
6. Review your Budget
At the core of good personal finance habits is effective budgeting. Think of your budget as way of giving yourself a pay rise, identifying where money can be freed up in your monthly spending.
For example, if you get the bus or tube to work, you might spend £15 or more a week on a pass. It isn’t that expensive, and you can easily justify the cost for getting to work.
Have you considered how much that £15 a week is over a year? By cycling to work instead of buying the weekly pass, you could save £780, which in effect is close to giving yourself a 2.59% pay rise if you are on the UK’s average £27,000 salary.
Don’t put all of you eggs into one basket! By staying globally diversified you are spreading out risk, so if one region or asset-class doesn’t perform then another might perform better.
Keep the habit of regularly investing into a globally diversified investment, and don’t be tempted by the individual stock tips that fill the newspapers and social media at this time of year.
8. Stay disciplined
Successful investors stay disciplined towards their goal, investing regularly to continually close the gap to goal.
With regular investments and investment growth you may achieve your goal sooner than you think, but it does require the discipline to treat your investment as a priority. You can’t just think “I’ll put in a little less this month and pay for a shopping spree instead.” It might feel good in the short-term but you’re delaying the date which you could reach your goal.
The only way forward is disciplined investing. That’s another reason why automating a monthly investment with a direct debit could make a lot of sense.
9. Learn more about investing
Reading the True Potential blog and watching the True Potential YouTube channel is a great way to stay informed about your investment.
We believe that investors should know what they are investing in, so tune in once a month to hear from our Investment Director on how markets have been performing.
You’ll also find exciting weekly content, helping you to do more with your money.
10. Take the impulseSave® challenge
Start 2020 with an investment of just £1, beginning a journey with the 52-week impulseSave® challenge which will add an extra £1,378 to your investment over the year.
All successful investors start with a goal, stay disciplined towards that goal, and track the progress of their investment. The impulseSave® challenge incorporates all three of these investing principles.
- Your impulseSave® challenge goal is to invest a small amount of money each week, starting with a pound in week one, two pounds in week two, and so on until the end of the year. Use impulseSave® reminders so you never forget your weekly investment.
- Stay disciplined towards this goal, investing a small increase each and every week. By doing a weekly impulseSave® that matches the week of the year, you’ll invest £1,378 in 2020. Print our impulseSave® challenge calendar and tick the weeks off as you go.
- Track your progress by logging-in regularly through the True Potential app to see how your investment performs.
With investing, your capital is at risk. Investments can fluctuate in value and you may get back less than you invest. Past performance is not a guide to future performance. Tax rules can change at any time. This blog is not personal financial advice.