Investment Masterclass: Essentials

Hello, I'm Sarah Coles, head of personal finance at Hargreaves Lansdown, and I'm here to welcome you to HL's six-week Investment Masterclass. This short course will take you through the essentials of starting your investment journey and provide you with information so you can build your knowledge, confidence and start to make your own investment decisions.

This course has been designed to help you learn more about investing and the role it can play in your personal finances, but none of it is personal advice. If you’re unsure what is right for you, please do seek advice.

Whether you're new to investing or you want to refresh your knowledge, this course is for you. This Masterclass can be completed at your own pace, though we’ll work through one lesson each week for a total of six weeks. Each week we’ll send you an email linking to that week’s lesson.

Each lesson contains a video and article full of tips and information on how to understand and manage your journey into the world of investing.

The Masterclass breakdown:

• Introduction and financial foundations
• Save or invest: what’s right?
• Account types: choosing the right one
• Investment types and how they work
• How to build your portfolio
• How to maintain and review your portfolio

At the end of each week, use the recap quiz to test your knowledge and see areas you might need to revisit.

Where do we begin?

Financial resilience is the perfect place to start. Just like a building, we all need solid foundations to work from when we begin something new. That’s why, before we start looking at investing, we’re going to look at the 5 key building blocks for financial resilience.

These key building blocks should provide you with information and tools you need to prepare for the unexpected and the long term. Understanding the role each block can play in your finances will help improve your financial resilience. So, if you’re ready to join us? Let’s get started.

5 to Thrive

We want to provide you with the tools you need to prepare for the unexpected and the long term.

Let's face it, creating a financially secure life can feel like a daunting task. We live in an age where there are vast amounts of information available to us at our fingertips. On one hand, we've never been in a better place to get to grips with our financial planning. On the other, our daily lives have never been busier and sometimes an overload of information can be overwhelming.

But building financial resilience doesn't need to be complicated.

At HL, we have 5 key building blocks for you to consider and to help you secure your financial future.

• Control your debt
• Protect you and your family
• Save a penny for a rainy day
• Plan for later life
• Invest to make more of your money

The five key building blocks are listed in order of priority. If you've already jumped in with some of the later building blocks, your priority will be to fill in the blanks as soon as you can and to work out what best suits your own circumstances.

Control your debt – debt isn't in itself a bad thing but ensuring you can use it for your benefit rather than being controlled by it is crucial. If it isn't managed properly, it can spiral out of control, becoming a real threat to your financial security. That's why the first step to building your financial resilience is to control your debt.

Protect you and your family – protecting your income and any loved ones is paramount when it comes to building financial resilience. If you were to pass away, become ill or suffer an injury it can have rippling effects. That's why protection insurance is so essential. So even if the worst happens, you or your loved ones have some protection. There are different types of protection insurance, and the one that suits you best will depend on your personal circumstances.

Save a penny for a rainy day – it's impossible to predict when things could go wrong, so it's important to get ahead of the game. That's your rainy-day savings pot. How much you need to save for a rainy day will depend on your personal circumstances, such as your income, expenses, and lifestyle. A general rule of thumb is to have at least three to six months' worth of essential living costs in a cash savings account. If you’re retired, you should hold one to three years’ worth. This can give you a buffer to cover any gaps in your income or any unforeseen bills.

Plan for later life once you've built up your short-term financial resilience, you'll need to start thinking about the long term. That means saving for retirement and this is where pension planning comes in. The main way to save for retirement is through a pension. A pension is a type of savings plan that offers tax relief on the money you put in and no tax on any growth. There are different types of pensions, such as workplace pensions, personal pensions, or self-invested personal pensions (SIPPs). They all have different features, benefits, and charges, so you'll need to do some research and compare your options. Remember tax rules change and benefits depend on individual circumstances.

Invest to make more of your money – investing gives you the chance to make your money work harder. Although this step might be the most exciting part, it's the last part of building your financial resilience. Once you've got the other steps sorted, that's when focusing on how investing could improve your future financial security comes in.

However, investing is not without risk. Unlike cash savings, the value of investments can go down as well as up, and you may get back less than you put in. Therefore, investing is not suitable for everyone, and you should only invest money you don't need for at least five years.

Next week, we’ll begin to look at investing in more detail as we help you understand reasons behind investing, how time, level of risk and much more will play into your decision making.

To find out more about each of these building blocks, you can follow the links in the text below.

Now we’ve completed this first lesson, take a few moments to complete the quiz at the bottom of the page and check your understanding of what we’ve covered.