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what are five questions to ask before
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investing your money number one do you
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have an emergency savings net having a
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healthy emergency savings net is
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fundamental to any financial plan
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industry consensus is that you should
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have at least 3 to six months worth of
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spending in your emergency savings
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before you even consider starting to
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invest two how long are you happy to
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lock your money away for if you have
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savings over and above your emergency
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savings net you're happy to leave and
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not touch for 5 years or more then you
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might be ready to invest three what's
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the right platform for you investment
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platforms all charge different fees
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which one is best for you will depend on
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how much money you have to invest how
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frequently you'll be buying and selling
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Investments and what types of
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Investments you'll be buying some offer
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lower trading fees if you commit to
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investing a regular amount each month
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there are good comparison tools out
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there and some platforms have
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calculators which let you see how much
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you'll be paying in fees on your
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portfolio when you're selecting an
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account think about opening an Isa as
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that will mean any gains you make
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taxfree you can currently save up to
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£20,000 a year into an Isa four how
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involved do you want to be if you want
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to start investing you can either buy a
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ready-made portfolio where you decide
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your risk tolerance and your money goes
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into a range of Investments that suit
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your risk level without you having to
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decide anything or you can pick your own
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Investments this gives you more
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flexibility but involves careful
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research and decision- making the
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difference is a bit like getting a ready
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meal from a supermarket or choose the
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ingredients to cook for yourself there's
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no right or wrong answer it's just your
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personal preference five what's your
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risk tolerance whichever option you
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choose you need to decide your risk
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tolerance if you go for a readymade
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portfolio your risk tolerance will be
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used to define what balance of
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Investments you hold if you want to
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choose your own Investments your risk
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tolerance should help Define what kind
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of portfolio you build most investors
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hold stocks bonds or a mix of both
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people with a lower risk tolerance will
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often invest mostly in bonds this is
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basically an iio you where you agree to
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loan your money to either a company or
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government those with a higher risk
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tolerance are likely investing mostly in
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stocks and shares these are stakes in
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individual companies if the value of the
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company grows then the value of your
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shares should grow but company share
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prices can be volatile so this is not
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for the faint-hearted the more common
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way for people to access stock markets
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is via a fund funds are investment
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vehicles Which pull people's money and
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put it into a range of Investments for
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you you can buy Equity Funds which
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invest in a range of company shares or
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you can buy bond funds which invest in a
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selection of bonds investing in a fund
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should help to reduce your risk as your
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less exposed if one investment goes
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badly it's worth remembering that if you
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go for a fund there'll be fees charged
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on top of the fees you're already paying
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to your investment platform so make sure
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to check what they are this is not
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Financial advice if you want Financial
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advice speak to a financial adviser
