How do you invest your money? Do you save it all in cash, hide it under the mattress, trade foreign exchange or buy antiques? Or maybe you don’t save or invest any money at all. Sometimes it feels like you’re living paycheck to paycheck with very little to show for it at the end of the week or month.

If you’re a Dad, making the most of your money is one of your foundational responsibilities as a protector and provider for your family. ‘Not being good with money’ just doesn’t cut it anymore. You need to be smarter and make your money work harder if you want to enjoy old age and have enough left over for your kids when you die (downer I know – but I needed to go there.

First up, when it comes to money, I’m more or less self-taught. That doesn’t mean I figured it all out myself. I didn’t. What I did do was read everything I could on money and investing: websites, books, blog posts and newspaper supplements.

I also spoke to people who knew what they were talking about. Having friends who are international business men and fund managers is a definite advantage in this respect.

I’m still learning all the time.

What I am not is a financial adviser or expert. So it should go without saying that anything in this post is for information and is not for advice. You could lose money doing what I’m going to talk about. If you don’t mind that risk then fine.

I’m also going to recommend some financial products. I have this thing about people who sell stuff on their blog that they don’t really care about or only feature because some ‘PR’ rep paid them £80 to write a featured post on their products. You know who you are – it’s pretty freaking shallow.

Which is why the products I’m going to feature are products from a financial organisation that I’ve personally invested in for over 15 years.

What Are the Best Investment Tips for Dads?

Also my advice will have a heavy UK bias because that’s where I’m based. So I might be talking here about products that are only available here in the UK or tax breaks that only relate to here. That doesn’t mean this post has nothing of value to you, it just means you’ll need to contextualise it for your own situation.

If that sounds like too much work, you’re probably not going to like the rest of this article so do yourself (and me) a favour: click off and go back to reading Buzzfeed or whatever is more important than your financial future.

Wow, was that the longest blog post introduction ever? Is this going to turn into one of those marathon blog posts that you need to bookmark or save to an app like Pocket (great app by the way, you should download it) for later reading? It looks like it.

I’d initially wanted to call this ’37 investment tips for Dads’ which is funny because I wasn’t sure I even knew 37 separate tips. In the end I’ve gone for quality over quantity. Keep reading and you’ll see what I mean.

1. Don’t buy crap

No I don’t mean actual crap – if you can get manure cheaply and have a garden, it’s going to help with fertility. I’m talking about all those gizmos, gadgets and ‘stuff’ you buy but just don’t need. It fills up your house and then your garage, losing value all the time.

When I was looking at houses to buy I saw in a lot of people’s garages. One common theme? All stuffed with old gym equipment, unused bikes and prams. So many prams. If you don’t need it, don’t buy it. Or…

2. Buy Second Hand

Fifteen years ago (give or take) there was no eBay. There was no Craigslist. And there was no Gumtree. If you wanted to buy something second hand you went to a jumble sale, or looked through the classified ads in the local paper (always teak furniture – why?) There were no photos and no apps. Just men with beards selling stuff that was probably stolen.

Right now it’s never been easier to buy what you need second hand. EBay has oodles of products that are second hand or good quality reconditioned models. Amazon has warehouse deals and if you have kids, everyone is selling their old buggy/highchair/changing table/mother-in-law. The only downside is that you end up with a garage full of second hand crap. In which case you can…

3. Sell Your Old Crap

It’s crazy how much stuff you accumulate. Especially when you have kids. Added to all the baby products you erroneously bought are all the hand-me-downs from your various friends and relatives who’s kids have grown up. You’ll soon run out of space to keep it all.

Which is why you should release some of it’s value. Baby stuff has a good resale value and places like eBay or Gumtree can provide you with cost effective opportunities to sell your unwanted stuff for a few pounds. Put it this way: it’s not making any money gathering dust in your garage is it?

easy investment tips for dads

4. Be Disciplined with Savings

How are you at saving? Good? Poor? Somewhere in between. A 2014 survey showed that 60% of people in the UK had less than £1000 saved up. That would barely last you a damp coffee break let alone a rainy day.

Instead be disciplined enough to save. Pick a percentage of your income and save that every month. It could be 3, 5, 10 or even 12% – what ever you can afford, put that away for emergencies or the future.

5. Automate Your Savings

Here’s how life works: you get paid. Then a few days later all your major bills come out, leaving you with scant money to get to next pay day. Or so it seems to you. But what if your savings came off as close to pay day as possible. It would be just like any bill – except you’re paying yourself. Set up a standing order to go into a savings or investment account and get on with your life.

6. Have Some Ready Cash

You’ve probably heard the phrase ‘Cash is King’ which is true up to a point (keep reading). Having cash is necessary in the world of broken boilers, crashed cars and children’s spectacles that seem to get broken every 2 weeks.

Not to mention that dental work you’ve been putting off and Aunt Maud’s visit (such a picky eater). Having cash in an easy access savings account is a smart move. I aim for 3 months living expenses at all times.

7. Invest in the Stock Market

Sounds crazy – if you’ve never done it before. What about market crashes??? Here’s the thing – you can lose money investing in the stock market. But if you do it right, the returns can be attractive with as little risk as possible. If you think we’re all doomed and the stock market is going to fail, then you better buy some food and put all your savings into gold bullion. Otherwise, the stock market is a sensible place to put your money.

8. Cost Averaging Brings Greater Returns

A couple of years ago I had no idea what cost averaging was. So here’s my idiot’s guide: You can get a better return on stock market investments by buying small numbers of stock regularly than putting in big lump sums. I put around 7% of my salary into the stock market every month. Do this over the long term and you’ll get a better return – because you’ll buy when the market is high and low. Magic? Not really. Just cool maths stuff.

how to invest your money if your a dad

9. Be Tax Efficient

There are plenty of ways to shield your money from the tax man – after all you paid tax on it already didn’t you? You could put it into a cash ISA (Individual Savings Account) which means you don’t pay tax on the interest. There are also stock and shares ISAs which mean you can invest in the stock market and not pay any tax on your earnings or capital gains tax when you cash out.

In the UK, contributions to a Self Invested Pension Plan (SIPP) are net of tax. The government tops up your contributions by how ever much tax you pay (20 or 40%). But you will pay tax when you cash out your pension and over the long term an ISA may be more tax efficient.

10. Buy Into Index-Linked Funds

Now we’re getting somewhere. I freaking love index funds. These are stock market funds that let you buy into a share of the whole market or a segment of it. If you’re new to all this, I recommend UK-based Scottish Friendly. They do a UK Index Tracker fund called My UK Tracker Options (ISA). Here’s the blurb:

A very British investment in the UK stock market from just £10 a month. £25 welcome gift when you start. Capital at risk. £50 early exit fee applies.

I’ve been a customer with Scottish Friendly since 2005 and my wife recently started investing with them. You can check out this and their other products here.

This is an affiliate scheme so I get a small commission if you invest after clicking the link. No cost to you, just a little ‘thank you’ from Scottish Friendly for sending you their way.

11. Find Ways to Make More Money

So you cleared out your garage and attic. Now what? What can you do that you could charge money for? It could be anything. I make a little money on the side (whaddup taxman?) doing freelance writing. It started off small, but now I can charge around £30 an hour. Not bad considering I used to watch fishing shows on ITV in my spare time.

I also have a small niche marketing website. This is a site that reviews products and gives visitors a chance to buy the products through my site. I get a small commission on what they buy. It’s not going to make me rich but it does bring in money every week with little effort on my part. As they would say in Peterhead, Scotland ‘Monies a meikle maks a muckle‘ (translation: lots of small amounts of money makes a lot).

What could you do? You might not be good at writing so you could try teaching people to cook, garden, web design, business consulting or even dog walking. A friend of my wife’s bakes cakes and sells them to a local cafe.

12. Spread Your Investments

Cash might be king, but if you rely 100% on it, you could end up living like a beggar. Better to invest in a range of things including:

  • Property (I work in property management)
  • Property loans (lending direct to developers)
  • Antiques, coins and collectables
  • Whisky or wines

And if you invest in the stock market, make sure you have a good spread of funds. Once you’ve built up a decent portfolio you might want to balance it out into other funds. There are some excellent risk-spreading formulae out there but I use the following (roughly) – 40% stocks, 40% bonds 20% gold, cash and commodities.

I learned a lot on this subject from Money: Master the Game by Tony Robbins. Yes it’s a bit scammy but once you get past the ‘Robbins Effect’ there’s some real nuggets of financial wisdom in there. And it’s easy to read. (Get it here).

Summary

Why share this with you? Simple really – no one ever taught me this. I learned it by picking up bits of information from books I was reading, researching blogs and reading more books on the subject.

I also spent time watching financial programmes on TV and reading money supplements in the newspaper. My point? No one is going to sit you down and teach you this stuff. You have to learn it for yourself as well as what works for you.

Making and holding onto wealth takes time, effort and discipline. But as we all start living longer we’ll need that money in the future. Plus you’d like to leave a little so your kids can have a bit of a head start in life. Learn this and teach them the same. That’s the best investment you can make.

Neil

P.S. My mailing list is recruiting new members. Could that be you? Find out if you qualify here.

 

About Neil M White

Neil has been writing for a number of years. He has worked as a freelance writer both in the UK and internationally and has worked on a number of high profile media projects. Neil spends his spare time hiking, in the gym or hanging out with his family.

2 comments add your comment

  1. Bookmarked, awesome.

    2 very quick tips I found have worked this year:

    1) – If you live in a city buy a bicycle – I have saved over £100 on buses/petrol/tube this year already – Gumtree will turn up some great deals and tools/lubes etc. can be found cheaply online/in value shops (Wilko/Poundland etc).

    Don’t skimp on kit and get some really good lights, if you are riding everyday consider cycling shoes and proper clothing (you look daft but it is worth it).

    2) – Financial leaks – small increments daily will sink your current account. Not so applicable to family budgeting but buying lunch daily/Starbucks etc. can add up to £100s of pounds a year.

    • Ed, thanks for the comment and for bookmarking! Good tip on cycling if you live in a city. I worked out that my £700 bike would pay for itself in a year by just cycling once a week to work. Also I love your point about financial leaks (this article suggests some people waste $500 a year on free trials that you haven’t cancelled and credit card subscriptions). Making a lunch at home can save you hundreds of pounds over the course of a year.

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