Can't get your head around investing?
I asked an expert to help.
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Bit of housekeeping first up. I’m working on three books at the moment and since I send four Substacks a week (two here and two of Happy Endings, my author newsletter), I’m going to take a day’s break in between each one. Which means they’ll come on different days each week. So the next Ladybird Purse newsletter will be Tuesday, not Monday.
This week, I had a chat with Eirin Holmeide about investing, something I simply cannot get my head around. It hasn’t been much of an issue so far because I haven’t had any money to invest, but I’m hopeful that I will in the future. I had a couple of questions of my own and I also asked my subscribers for theirs.
Eirin is a Head Financial Coach at Octopus Money managing a group of financial coaches and a financial coach at Eirin Holmeide Wealth Ltd helping clients increase their financial literacy skills to maximise their money, grow their wealth, and feel empowered by their financial decisions.
Eirin’s self-employed journey began in 2019 when she started her financial coaching business after completing an MBA and 8+ years in different financial roles in the corporate world.
However, Eirin’s own personal finance journey began in 2006 when she started her BBA degree and decided to set herself a goal to become financially independent and not depend on a job. Through her personal journey and her educational background in business and finance, she has seen and experienced the impact that financial education has had in helping her understand how to plan and take action toward her financial future.
Eirin is passionate about helping people understand how money works and how to use it as a tool to create their ideal life. She has been investing for 13 years and is especially passionate about helping women get started with investing and building wealth. In 2021 she came across Octopus Money and went through their accreditation and has been able to help over 150+ clients transform their financial future. As a top performing coach, she has, in 2023, also decided to take a role with Octopus Money as a Head Coach managing a group of financial coaches to help them with their development and progress.
Eirin lives in London with her husband and would love to get a dog in the near future. She enjoys walks and hikes in nature, trying out different cuisines at great restaurants, reading a good book or listening to an interesting podcast as well as travelling and exploring new places when possible.
My first question is where do you even begin?! It seems so overwhelming.
The first place to start is to ensure you have the right foundations. A few things to consider before you can start investing:
1. Pay off expensive debt as the interest you pay will usually be much higher than the return you can expect in the stock market.
2. Have a fully funded emergency fund (3 - 6 x monthly expenses or net income depending on your lifestyle and preference) so you have enough cash to cover emergencies or unexpected costs without being forced to sell your investments.
3. Consider taking out insurance to protect against a worst case scenario. Again, the benefit of this is to ensure you have peace of mind and have financial support to get through a difficult life event (illness/accident where you lose your income) without being forced to sell your investments.
4. Understand your risk profile. This will help you choose the right type of investments.
5. Be prepared to weather the ups and downs of the market. Investing is a long-term game so it's important to let your investments fluctuate and allow them to grow over the long-term. Diversification helps with this!
Question from a subscriber: If you have debt but it’s on a long term 0% interest rate does it make sense to invest any extra cash rather than put it towards the debt? I know guides always say to pay off debt first but when I’m paying nothing to have it would I be better trying to grow what I can?