Firstly Happy New Year!
I find that this break at the end of the year is the perfect time for reflection. This is that time of year where we all look ahead to the New Year with enthusiasm and determination to make it better than ever before. This is more often by challenging ourselves in ways to make us better people, by losing weight, starting a new hobby, quitting smoking, volunteering and the list goes on.
This year for me I aim to cut down on my spending significantly, invest as much as I can and leave work to start my new business so it’s very exciting times ahead. This is on top of working on existing websites and getting married so 2015 is going to be very busy and exciting indeed!
Cutting down on Spending
Cutting down on spending is very important for me this year because firstly I am getting married in June (which is scarily expensive!) and also because I will shortly be starting my own business and this means that my earning will temporarily drop to nil.
At the moment I don’t consider myself to be a big spender. I cycle to work to save on transport costs, bake my own bread and make my packed lunch. However I know there are a few more ways in which I can reduce spending.
Firstly I am going to cut down on drinking alcohol, not only is it bad for you it is pretty expensive as well! Also I plan on making sure that our food bill for the two of us is below £40 per week.
I want to make cuts in my spending without hopefully feeling bored and miserable. Hopefully seeing the investments increase will make it feel worth it!
I will of course track the progress of this in this blog throughout the year.
Invest my Savings
At this point I would like to point out that I am an average person on an average salary (which is about to drop to 0). I do not have a massive portfolio or a vast amount of stocks or shares.
I want to cut down on my spending and use the excess cash to invest. I want to show that anyone can do this regardless of how much you earn. If you stopped having a once a week takeaway and invested the cash you could invest £1200 in one year and when you look at figures like that it really does make you think twice.
I have been reading quite a few books recently including Rich Dad, Poor Dad and I plan on reading the Millionaire Next Door soon and it has made me realise that by cutting out a few luxuries and investing the money saved you can amass more that you think without really noticing any difference.
So a couple of months ago I opened a stock and share ISA with a company called Nutmeg. Nutmeg make investments on your behalf based on your attitude to risk and also what you want to save for and the length of time you wish to save for. For example if you wanted the money in 3 years time for your pension then the funds would be low risk. I invest £100 each month into the ISA which for most people is an achievable amount.
Below is a breakdown of my portfolio as at today which shows my return. Each month I will include a savings summary in my blog which tracks my investments and shows the returns I will be getting.
So essentially since I started this account in October I have earnt £48 in returns which given the initial outlay seems good so far. This for me is a long term investment of 10+ years so if it starts to decrease a little I won’t be panicking. Also this account is set up with a risk level of 7 which means it is moderatley risky. This is because of the long time frame and low amounts invested. I try not to check it too often but it is quite addictive!
Over Christmas I have also opened an account with Funding Circle. Funding Circle is a pier to pier lending platform which is just for business loans. For me as an accountant it is incredible interesting as you can see the results and plans for businesses. It also feels rewarding as you can feel like you are able to help small businesses.
We have only put in £300 to test the water and we plan to lend to a number of businesses over the next month. I am keen to see how this investment goes as I am aware that there is a risk of businesses defaulting on the loans.
If this goes well then we will invest a little more to this as well from our money saved from cutting down.
As I said above Christmas is a time for reflection and you have a chance to assess where you are and really think about what you want to do with the coming year. During the year this becomes harder and harder as we get caught up in our daily routine. I heard a statistic today which stated that on the first Monday back at work after Christmas more people register with a recruitment agent than on any other day during the year.
During this time I have really focused on what I want to achieve and as such I plan to leave my job to go and work for myself and also focus on the ski website that I also run with my fiancée. I imagine this all to be very enjoyable but challenging at the same time.
I challenge your self to really invest in yourself in 2015, be that physical and mental health, your knowledge and your relationships. Let’s make the next year remarkable!!