My investing life
Claire Benson, 40, is a freelance marketing consultant who lives in London with her husband and two children. She is an investing novice and recently decided it was time to get her head out of the sand and start thinking about her financial future. Claire’s motto is ‘better late than never’, but she still wishes she had started investing a decade or two earlier and given her money a real chance to grow…
“Why a milestone birthday made me take action...”
Milestone birthdays always have a big effect on me. My 20th convinced me it was time to give up my dead-end bar job and get a proper one in an office instead.
My 30th made me think about hanging up my much-loved dancing shoes to get married and have babies.
My 40th was trickier. I officially became a grown-up and it was time to get serious and think about my future. It was unlikely that our house would ever pay for our retirement and I couldn’t rely upon inheritance as my parents moved to the south of France to live their retirement dream! It was time to focus on my financial planning…
I earn my own money and have always enjoyed being financially independent. I want to buy a lipstick or four pairs of sparkly flip-flops when I want to, without feeling guilty, I wouldn’t want to rely on a husband to fund my retirement.
I didn’t know where to start. I had a bank account, a mortgage, a credit card and a handful of shares but I had never really thought about whether I was making the most out of my money. I knew I had paid something into a pension years ago, but I also knew that at some point I had stopped paying into it.
I decided to take action. I started reading books on personal finance and subscribed to several financial blogs and email newsletters. I was particularly interested in the blogs written by female writers, because I thought they might understand me better. I even started reading the business pages in my newspaper!
My research showed me that opening an Investment ISA (Individual Savings Account) made perfect sense. In this type of account, I wouldn’t have to pay capital gains tax or income tax if any of my investments became more valuable.
To make sure I wasn’t paying any more tax than I needed to, I transferred the handful of shares that I already had into my ISA. I decided to invest in a FTSE 100 tracker fund. I liked the idea of this type of investment as it spread my risk across all the companies in the FTSE 100.
Of course, I understand all the potential risks that go with my investments. I’m especially aware that the value of my investments can fall as well as rise – sadly profits are never guaranteed! My research has brought home to me that these investments should be held for at least five years and I intend to hold on to them for at least that long, or maybe even longer. I don’t think of them as something I can raid at a moment’s notice. Instead, I make sure I always have enough readily accessible cash in my bank account, so I have something to fall back on in an emergency.
During my journey towards financial independence, I also tracked down two old company pensions through The Pension Tracing Service. I was surprised to discover I had about £30,000, a piece of good news that I wasn’t expecting!
Perhaps I might get to the south of France after all…that thought should keep me motivated to carry on my research!
Look out for my next instalment – My investing learning curve.