*This post is not sponsored by Nutmeg, all opinions are my own however they did collaborate by sending me a few articles on women and investing. Also I’m not a professional financial advisor, this simply represents my experience and non-professional opinion.”
“It’s very important to have your own financial independence”, this is what the mother of my boyfriend at the time told back in 2003, I have never forgotten those and I have never forgotten him for that matter (we’re talking seriously hot French man…). However I bet if I did a quick poll of my female readers most of them would admit that either:
- their husband deals with their savings and investments
- most of their money is in a safe cash ISA
Am I right? Who manages your family’s savings and investments? I would love to know!
I have worked in the City for 12 years, I even work for a data management company but I have no financial education and despite my job don’t feel comfortable with actively investing. I lack confidence and that seems to be a common trait amongst women, this sense of lack of knowledge and confidence, which we must overcome!
A few years ago I set up a stocks and shares ISA to try and make more money than the low interest rate I was getting on my cash ISA but I never used because I was just too scared and frankly uneducated about fund/bond/stock picking so I closed it. And I’m definitely not the only one, even though women are statistically better at investing as per a Nutmeg article, they definitely don’t believe it, I’m convinced testosterone levels have an impact on this!
A few months ago I saw an advert for Nutmeg who do the hard/complicated work for you by choosing what goes into your stocks and shares ISA portfolio. I read some reviews (including this one and this one) and decided to open an account (minimum is £500). It is super easy! They told me their number of clients is up 49% year on year as of the end of July 2016 so I’m not the only one who thinks its a great service! If you want better returns than the usual low interest rates you get on cash ISAs or savings accounts then I’d highly recommend you look into them. Here are some examples based on different risk levels:
I’d also highly recommend that in general women take more interest in their investments, you hear too many stories of women who realise too late that their other half has been taking crazy risks with their money, lost it or they just don’t know how much money they have saved and where. It is YOUR money and your future after all!
Back to Nutmeg, there are 3 main steps for setting up an account:
- How much you want to put in (one lump sum or regular contributions)
- What risk level you are comfortable with (this determines what they invest your money in)
- What your investment timeline is
It also asks what your goal is so you can see if you will achieve it . Obviously nobody can predict the future (so it’s all in theory) but it tells you there is x% of chance that you will reach your goal. This also means that your investments can go DOWN. As the saying goes “past performance is no guarantee of future results”.
It then builds a portfolio for you, they generally use “exchange-traded funds (ETFs) because they’re easy to trade, low cost and aim to track the movement of market indices with a high degree of accuracy”, you can find out more here: https://www.nutmeg.com/how-we-invest/etf-guide
You can access your account 24/7 and take your money out at any time without exit fees. The fee that they do charge “starts at 0.95% and goes as low as 0.3%, including VAT, depending on the amount you invest. The more you invest, the lower your fee.” Remember that the full Stocks and Shares ISA allowance for the tax year 2016/2017, as of 6th April, is £15,240. If you want to invest more with them you can but it won’t be tax free.
There are 10 different risk levels and you can create multiple portfolios within the same ISA at different levels (which is what I have done).
All I know is that this ISA has gone up more in a few months than my cash ISA (that has 3 times more money in it) has in 2 years. That’s just my experience and that’s all I’m trying to do with this blog post, let people know about a product I think is really easy and fills a gap in the market, if I encourage women to get more involved with their savings then all the better!
I’m seeing this as a medium/long term way of investing (ideally to be able to move house one day and the second portfolio is for a future amazing holiday, that one has a higher risk level because I’m happy to gamble more with that one, it’s the one with the better performance, the higher the risk the higher the rewards but you have to be OK with potentially losing some of the money, I can’t stress this enough!)
I think Nutmeg is a great way for women (and men of course!) to take charge of some of their savings in a simple way, everything is super clear and transparent on the website (and you can see what makes up the portfolio, how that portfolio has performed compared to other similar ones from other providers (this is called benchmarking, the only thing I really know about as I sell benchmark data!) and what the predicted outcome is.Here are some comparative examples:
Don’t be afraid! As per this article, lack of confidence often holds women back, which is a real shame, you can always use a low risk level to get comfortable to start with. Inform yourself is all I can recommend and of course there are plenty of financial advisers out there much more qualified than me!
My main point is to encourage you to take more interest in YOUR money and Nutmeg is a great way to do it in my opinion. If you want to know more, their FAQ section is very comprehensive. For some other tips and advice, you might find these posts interesting:
10 Things To Do Before Maternity Leave Ends
European Mummy 