Investment for People who Don't Want to Talk about Finance

By Johanna Wychcote

Are you one of those people who hate hearing about the stock market, thinking about budgeting, managing your money? This book is for you.

 

It sets out a very simple way of investing your money that will save you time and effort while letting your money work over the long term to earn a return.

 

Yes, there are a few financial terms to learn - but not many. More important is learning about how to protect yourself from downturns, how to automate your investments as much as possible, and how to avoid snake oil salesmen and common traps.

 

We take you through thinking about what financial resources you'll need for your life, and working out how much risk you're prepared to take - or not - in order to achieve it. We also explain how to evaluate the risk of the stock market, which really isn't as high as many people think. 

 

By the end of the book, you will not be an expert on finance. But you will know enough to invest your funds wisely, without hassle, without paying a financial adviser a huge whack of your money - and you'll be able to sleep easy at nights, too.

• Language: English
• Publisher: Practical Press
• Release date: Feb 6, 2021
• ISBN: 9781393025702

Johanna Wychcote

Johanna spent twenty years working in finance before quitting to go it along before she burned out. She's built her own investment portfolio and a small real estate business, and now writes ebooks on investment topics as well as spending her spare time painting watercolour landscapes.

Book preview

Introduction

When you read the papers or go to a website like Marketwatch or Fool.com, you'll see lots of advice on what stocks to buy or sell. Buy Amazon! Sell Tesla! Buy Gamestop! Sell BP! Buy Tesla!

It's wrong on so many levels.

•  It's all about the stocks. That's not what investment is about. Investment is about you. It's about your money, your life, and what you want to do with it.

•  It's all about single decisions. Investment for the long term isn't about taking single decisions. It's about having an overall strategy and being able to take decisions which fit that strategy. So buying Tesla might be right for you - and wrong for your best friend, because you have different strategies.

•  It assumes you're interested in stocks, you're fascinated by trading, and you want to spend a lot of your time watching stock market tickers. If you want to just invest your money sensibly over the long term, you may not want to spend much time on it at all.

•  Somehow, no one ever talks about whether the shares are really worth the price or why. It's all - buy it, it's going up.

•  It's all so excitable. Investment is, actually, not all that exciting. (The results, though, can be exciting.)

•  And it's all You've got to do it now. Not do some research and think it over.

And if you've got this book then you are someone who finds all this stuff about the stock market absolutely, horribly boring. If you still get a paper newspaper.... Well, let's say you did, you'd probably just turn over the finance pages without looking at them, wouldn't you?

So this is book is written on the basis that

money is something you need, and you ought to invest it to have a bit more of it,

you can manage it yourself successfully with a minimum of time and effort,

and there are a few snake oil salesmen around that you really need to avoid.

This book gets to the basics of investing and what you need to know to put your money to good use without wasting your time on BRICS, FANGS, straddles, puts, contango or short sales. It's for you if you realise that putting your money in a bank account is giving you almost zero in interest, and you want to grow your wealth over the years without too much hassle.

I've worked in several different investment environments during my career in finance - in the US, in the UK, and in Paris, France. So I'm well aware that each country has its own particular quirks. For instance, REITs in the US are pretty similar to REITs in the UK and SCPI in France, but they have their little differences - for instance SCPI, unlike the others, aren't stock-exchange traded, and have much higher entrance costs.

But the principles in this book will be exactly the same wherever you're living. You'll need to find out the local wrinkles - but creating your investment objectives, assessing your risk tolerance, and investing for the long term, are the same wherever you live. The idea of automating as much of the task as possible is also the same, though not just different countries but also different banks, brokers or fund platforms may offer you different ways of doing so. I started investing in a fund as soon as I started work. It wasn't much, it was £50 a month I think; but it was automatic, £50 a month every month. I ended up putting £17,000 into that fund over the years and it was worth well over four times that when I sold it. If I'd had to actually make a decision every month to invest some money, I bet you I would have not achieved half as much.

Enough about me. I'll tell you a few stories throughout the book but they're there just to show you it's possible. But personal finance is personal. Your investments are all about your life, your aspirations, the way you want to live and how you're going to finance it.

So let's get started - let's think about you.

What do you want to achieve?

This is absolutely the first question you should ask yourself. Thirty years ago, when I was working as a broker and making pretty decent money, my answer would have been that I wanted to create a substantial sized portfolio capable of generating capital growth. And I did go on to do that. I was a reasonably active trader, and spent quite a bit of time doing my own research.

But now, my priorities have