Whether you love making budget sheets each month or you're the kind of person who'd rather stick their head in the sand than have a conversation about debt, money has an impact on just about every area of your life. As frustrating as that may be for people who think they just aren't 'good' with money, the good news is that the number one tool for changing that mentality is totally at your disposal: knowledge.
Some methods of gaining an understanding about money look very boring indeed but there are plenty of educators out there now who understand that reading the financial pages of a fusty broadsheet ain't gonna cut it for those of us paying 60% of our salary to live in a box room above a fast food place.
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Money Medics is headed up by Ashley, her sister-in-law Eve and brother Nicholas. The money management Instagram account, podcast (latest ep: "Being A Bridesmaid Landed Me In Debt." Sound relatable?), YouTube channel and newsletter are packed full of easy-to-digest info aimed specifically at young people who want to get a grip on their finances.
So when we got the chance to ask Eve and Ashley a few of your money questions, we couldn't hold back. Read on to find out about getting started in crypto and investing.
I’m really interested in learning more about investing in cryptocurrency after seeing some of the amounts people have been making online but I’m really confused. I did loads of reading and I think I just about managed to understand Bitcoin and I bought some but then a colleague told me that investing in Bitcoin now was pointless and now there seems to be a new coin every time I open my Coinbase app.
I enjoy investing little amounts in stocks with apps like Nutmeg and Revolut but I'm only making pennies. Should I just stick to this or is there hope yet for me being a crypto kabillionaire?
Great question. As a beginner investor it's important to diversify your portfolio, whether that’s in stocks and shares or crypto. At the end of the day, you don’t want to put all your eggs into one basket. Also it’s important that before you start you have a solid budget in place for your finances which includes a set amount for investing. This is so you don’t end up throwing all your money into it.
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Roughly there are about five asset classes to invest in:
– Property: buying physical property or investing in property crowdfunders such as Bricklane.com.
– Bonds e.g. NS&I or your local high street bank.
– Commodities (such as gold and silver) - e.g. The Royal Mint
– Alternatives (art, collectibles and the ever growing crypto) e.g. Maddox Gallery for physical art and OpenSea for NFTs (non-fungible tokens).
– Stocks/shares (aka equities). Look out for robo advisors like Nutmeg which you already mentioned or individual stocks and shares through brokerage platforms such as Trading 212 or Freetrade.
– Bonds e.g. NS&I or your local high street bank.
– Commodities (such as gold and silver) - e.g. The Royal Mint
– Alternatives (art, collectibles and the ever growing crypto) e.g. Maddox Gallery for physical art and OpenSea for NFTs (non-fungible tokens).
– Stocks/shares (aka equities). Look out for robo advisors like Nutmeg which you already mentioned or individual stocks and shares through brokerage platforms such as Trading 212 or Freetrade.
The overall aim is to spread your money across the different assets so that when one asset is down, you have other assets to balance your portfolio. This may sound overwhelming but the best thing to do is take a couple of minutes each day to read up on each of them and as your confidence grows, so will your willingness to take the plunge.
Now that we’ve discussed diversification, let's take a quick deep dive into crypto. I can’t promise you kabillions from crypto but it is definitely an area you should be keeping an eye on as it could potentially be the future of money. As crypto is a more risky and volatile investment you only want to invest a very small percentage of your portfolio in it, perhaps around 5%. And as a beginner, you really only want to stick to reputable and user-friendly, FCA-registered platforms such as Coinbase, Binance, CoinJar and eToro. These platforms won’t have all the coins but they will have the most stable ones.
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When it comes to investing in crypto, the three main things you need to consider before jumping in are:
1. Is there a real-life use case for your chosen coin? A lot of the coins that you see people making kabillions from are sometimes termed 'shit coins' and have very short lifespans in that they could go up one day and crash the next, so be very wary of them! You need to make sure the technology behind the coin is future-proof and there is a need for it.
2. What is the total supply of the coin? If there are too many coins in circulation the likeliness of it going up in value is very low.
3. Check out the coin's community. A lot of coins have corresponding Telegram groups that you can search for in the Telegram app. Get your ear on the ground and see what they’re saying – are they in it for the long run or is it just a pump and dump?
I guess the last thing I have to say to you is, be patient! The apps on your phone that show your crypto going up and down in real time can be very addictive. The most important thing is to do your research, purchase the coin you feel most confident about and then go to the beach (aka leave your investment alone lol). Don't let a crazy day in crypto-world FOMO you into spending too much money on something you know too little about
If you've got a question you'd like answered, email money.diary@refinery29.uk. For more great money advice on saving, spending and everything in between, head to Money Medics' Instagram.